What does leaving the EU mean for social security?

Published: 7th Jul 2016

This briefing is largely based on the briefing by the House of Commons Library ‘EU referendum: impact of an EU exit in key UK policy areas’. The opinions and judgements it contains are theirs. We expect to review and add to these articles periodically as events develop.

Welfare benefits

Entitlement to welfare benefits for people moving between EU member countries is closely linked to their free movement rights.

Once it leaves the EU the UK could try to negotiate agreements either with individual EU and European Economic Area countries, or the EU/EEA as a whole. According to the House of Commons Library these negotiations could be difficult, and might end up looking a lot like current EU law.

And that doesn’t deal with the situation of UK citizens already living in the EU, and EU citizens already living in the UK, at the point when we leave. Negotiations on existing social security rights would be part of a wider ‘divorce’ package likely to be negotiated under Article 50 of the Treaty on European Union, which lays out how countries leave the EU.

Currently access to benefits for EU citizens is governed by EU laws on free movement in the EU treaties, and laws on coordinating social security between member countries. Access is not unrestricted, and broadly depends on a person working or being able to support themselves. Free movement rights have been extended to more people over the years, but in 2014 the EU court confirmed that countries can refuse benefits to migrants who aren’t looking for work and only moved country in search of those payments.

In July 2014 the UK government’s review of our EU membership called for a review of the EU rules on free movement “with a view to modernisation and ensuring they are fit for purpose”. But it was unable to point to specific research or analysis on the importance of access to benefits in the decision to move country.

There is no direct evidence that welfare has encouraged people from other EU countries to come to the UK, and gathering this kind of evidence is tricky. Nevertheless, the government has put some limits on EU immigrants’ access to benefits since 2014.

Implications of UK withdrawal from the EU

If free movement rights are not part of the final deal with the EU then the government would be able to restrict access to benefits.

The government would also have to decide how leaving the EU will affect the rights of EU/EEA citizens who are already working in the UK.

The 1.2 million UK nationals living in other EEA countries might also see their rights to benefits restricted. How those people are affected once the UK leaves the EU will depend on the decisions those governments make and the results of any negotiations between the EU and the UK. The House of Commons Library also says that if these UK citizens face restrictions on benefits and residency rights, significant numbers of people may return to the UK.

Withdrawing from the EU would also end the social security coordination between the UK and other EU countries. EU law aims to make sure that people who move to work in another EU country aren’t disadvantaged. For example, countries cannot discriminate by nationality, and you can take certain benefits with you if you move abroad.

Outside of this system each country would decide their own rules. Without a new agreement, people from the UK who have worked in the EU, and people from the EU working in the UK, could find their pensions rights are reduced, for example.    

The UK could try to negotiate bilateral agreements with individual EU countries. It already has some similar agreements with non-EEA countries, and had them with some EEA countries before joining the EU. However, existing agreements don’t cover as much as the EU system, and no new ones have been made for many years.  

How likely negotiations are to succeed will depend on the relationship between the UK and individual countries, but could be difficult.

Instead of bilateral agreements the UK could try to arrange a deal with the EU/EEA as a whole. That might be very similar to the current system, and would almost certainly mean the UK would have to treat all EU countries the same (and not discriminate against people from Eastern Europe).

Ireland is a special case. The House of Commons Library expects that the free movement and social security rights of Irish citizens will remain the same once the UK leaves the EU.

Access to social housing

As social housing in the UK is a public resource, people from EEA countries must currently have equal treatment with UK citizens.

Housing policy is devolved and so there are different rules on eligibility in England, Scotland, Wales and Northern Ireland.

If withdrawing from the EU ends free movement rights, the government could stop allowing people from EEA countries to apply for social housing. At the moment ‘Persons Subject to Immigration Control’ cannot generally apply for social housing or assistance.

When the UK leaves the EU the government will have to decide how to deal with people from the EEA who already have a social housing tenancy or rely on housing benefit.

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