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Advising EEA workers and self-employed people

This page is for housing advisers. If you are a new arrival please click here for information more relevant to you.

This section looks at housing problems faced by EEA nationals who are working or self-employed. It does not cover advising Croatians or advising EEA family members. If the person you are advising does not fit the definition of worker or self-employed you may find the page on advising other EEA nationals helpful.

What are the housing and housing benefit rights of EEA workers and self-employed people?

Generally, people who fit the definitions of EEA workers or self-employed:

  • are eligible for a housing allocation, homelessness assistance and housing benefit
  • do not have to pass the habitual residence test to be eligible, and
  • their eligibility covers their family members: see EEA family members for more on this.

Even when they stop work, or are temporarily unable to carry on their business, they often continue to be eligible.

Who is self-employed?

These rules apply to all EEA citizens including Croatians.

If someone is self-employed and that activity is genuine and effective, then they have the right to reside and the consequent benefit and housing rights. They do not need to earn enough money from their self- employment to be self-sufficient. They do need to be engaged in the business, not necessarily full-time, and not necessarily earning any money from it.

In a benefits case the Upper Tribunal judge gave a useful summary:

'I do not accept that a claimant who is for the moment doing no work is necessarily no longer self-employed. There will commonly be periods in a person's self-employment when no work is done. Weekends and holiday periods are obvious examples. There may also be periods when there is no work to do. The concept of self-employment encompasses periods of both feast and famine. During the latter, the person may be engaged in a variety of tasks that are properly seen as part of continuing self-employment: administrative work, such as maintaining the accounts; in marketing to generate more work; or developing the business in new directions. Self-employment is not confined to periods of actual work. It includes natural periods of rest and the vicissitudes of business life. This does not mean that self-employment survives regardless of how little work arrives. It does mean that the issue can only be decided in the context of the facts at any particular time. The amount of work is one factor. Whether the claimant is taking any other steps in the course of self-employment is also relevant. The claimant's motives and intentions must also be taken into account, although they will not necessarily be decisive.'

In February 2014, the DWP issued guidance for those administering means-tested benefits which covers people claiming benefits as self-employed. It requires that applicants who show that they had earnings of less than an average of £153 per week for the last three months may face further questions to determine whether their self-employment is marginal and therefore not genuine. The guidance quotes a case (Bristol City Council v FV (HB) [2011] UKUT 494 (AAC)) which makes it clear that ’the fact that the appellant’s earnings were not sufficient to mean she did not need recourse to benefits to live was not the test to be applied in assessing whether the work was genuine and effective.  Indeed, the tax credits and housing benefit schemes are based on the fact that people in work will need to have recourse to those benefits to live’.

Proving self-employment

Proof of self-employment may be an issue. Documentation of self-employment may be provided by:

  • an application to HMRC to register for tax and NI payments as self-employed
  • holding a Unique Tax Reference number that indicates self-employment
  • letters from HMRC (for example, demands for payment of national insurance or tax, or to send in the annual self-assessment tax form)
  • a Construction Industry Scheme card (there are specific arrangements for self-employment in the construction industry and the card provides proof of self-employment and that the holder has passed the construction site safety requirements)
  • evidence that a business has been established (a lease on premises, purchase of equipment, publicity material).

The fact that someone may not have registered or attempted to register as self-employed does not mean that they are not self-employed, although registration is a legal requirement, and people should be advised of possible consequences if they do not register.

Self-employment also includes those who are sellers of the Big Issue (see this case).  

Even where someone has been self-employed but is not working at the moment they may retain the status of a self-employed person and thus retain the right to reside if they are temporarily unable to work as a result of illness or accident.

Who is a worker?

These rules do not apply to Croatians in their first year of employment in the UK. The European Commission, however, is taking action against the UK government on this which may result in changes.

Someone is a 'worker' if they perform work which is 'effective and genuine' and not on such a small scale as to be purely 'marginal and ancillary'.

Work does not have to be full-time or permanent, and it does not have to provide a sufficient income for the subsistence of the worker. European case law has found that work for as little as ten hours a week qualifies the person as a worker and this was reproduced in DWP guidance on workers.

'Effective' means that the work, even if there is no formal contract, is something that is recognisably a labour contract: there is an employer, an employee, and an agreement between them that the worker will perform certain tasks in return for which the employer will pay or offer services (such as free accommodation) or goods. Problems occur when the arrangement is between friends or family members and informal, because there may be suspicion that the work is neither effective nor 'genuine'. It helps if there is proof that the arrangement includes sanctions if the worker fails to do the work that is agreed.

The concept of worker must not be interpreted narrowly. Any person who performs services under the direction of another person in return for payment falls within the definition provided that the activities are real and genuine and not so small scale as to be regarded as purely marginal and ancillary (see for example this case).

'Marginal' can be taken to mean that the work involves so little time and money as to be largely irrelevant to the lifestyle of the worker. It is 'ancillary' because in this situation the worker is clearly actually spending most of their time on something else, not work. So a student who gets a job behind the student union bar for two hours a week is actually a student, their work is marginal and ancillary to their actual role as a student.

Where pay is very high, working a small number of hours may not indicate marginality: earning £50 an hour for four hours a week, for example.

Low hours and wages are not automatically marginal. The facts of the situation may show that the low hours and wages are the product of particular circumstances (a reduction in hours to deal with illness or a childcare crisis, or a decision by the firm to go on to short-term working temporarily). Or there may be realistic prospects that the hours and/or wages will increase later.

In February 2014, the DWP issued guidance for benefits, including HB, which set up a ’two stage‘ process to look more closely at claims based on work where the applicant had earned or earns less than £153 per week average over the last three months.  If this is triggered, then in deciding whether the work is marginal the decision-maker must consider:

  • whether work was regular or intermittent
  • the period of employment
  • whether work was intended to be short-term or long-term at the outset
  • the number of hours worked
  • the level of earnings.

‘However, the case law does not identify one consistent approach to applying these and other factors: each case must be decided on its own merits.’

This guidance applies only to benefits.  For those assessing eligibility for housing or homelessness services, the codes of guidance on allocations and homelessness still apply.

Workers 'temporarily unable to work'

The status of 'worker' will be retained where the worker is temporarily unable to work due to illness or accident. This applies to those who are not currently in employment (being ill while an employee is simply being a worker). There is no time limit set for this and as long as the inability to work is temporary and the worker intends to return to work when able, then the status is retained. How long can a worker be 'temporarily' unable to work? In Moreno v Hackney LBC November 2009 the County Court found that Mr. Moreno was indeed temporarily unable to work for four years from 2004 (reported in Legal Action November 2009). Hackney Council had failed to consider whether the treatment he was receiving would result in him getting well enough to work.

The illness preventing the worker from working need not necessarily be that of the worker him/herself (see this case - para. 54). In it the claimant was an EU worker who had to stop work in order to care for her temporarily severely disabled husband (who was not an EEA national, and who was likely to recover after treatment). She thus retained her status as a worker. The commissioner also commented that it was likely that the same would apply to a worker who had to stop work temporarily to look after a child, but only if it was because of the child's disability, not his/her age. This is a fact-sensitive issue. The DWP Guidance cites this case which states that the illness must be that of the worker.

The Court of Justice of the European Union decided in 2014 that a woman who gives up work because of the physical constraints on her of her pregnancy or of the aftermath of childbirth is a worker who is ‘temporarily unable to work’ provided that she is able to return to work, or find another job, within a reasonable period after the birth of her child. If that is the case, she remains a ‘worker’: St Prix v SSWP (C-507/12, June 2014, CJEU).

It is important to note that this provision to retain worker rights is not subject to the same restrictions as that offered to people who are simply unemployed and looking for work. People who are temporarily unable to work due to illness or accident can claim benefits as workers, with no fixed time limit, and access to HB. Those who are unemployed keep their worker status for a minimum of six months while signing on, but then risk being ‘demoted’ to workseeker status with no access to HB. Even that workseeker status may end after a further six months.

If a worker or self-employed person becomes permanently unable to work due to illness or accident it is possible that they get the permanent right to reside depending on how long they have worked in the UK or the nature of the illness or accident.

Keeping worker rights

Apart from being temporarily unable to work, former workers retain their rights when:

  • The worker has worked for more than one year and is registered as involuntarily unemployed and seeking work at the Jobcentre. They do not have to have worked for the same employer for that time, and arguably they will retain the status of worker even if there were short gaps in employment during the year's work. However, the EEA regulations were amended from 1st January 2014 making it clear that a former worker in this situation must provide evidence that s/he is ‘seeking employment and has a genuine chance of being engaged’ and that after six months s/he can provide ‘compelling evidence’ of this.
  • The worker has worked for less than one year and is registered at the Jobcentre as ‘involuntarily unemployed’. The status of ‘worker’ is retained for six months. The courts have accepted that retained worker status can be acquired after a period in employment as short as two weeks (for example, in this case as a steward at Wimbledon). After six months s/he can continue to sign on but will lose their worker status and instead have a right to reside as a workseeker, which is not a qualifying right to reside for housing. Workseekers were entitled to HB if they were in receipt of income-based jobseeker’s allowance but this entitlement ended on April 1st 2014. There is transitional protection for those who were claiming before this, but it is lost if there is a break in the claim.
  • The worker is voluntarily unemployed and engaged in vocational training or is engaged in vocational training linked to his previous employment whether or not they are involuntarily unemployed. Vocational training was defined in this case (pdf) as:

    'Any form of education which prepares for a qualification for a particular profession, trade or employment or which provides the necessary skills for such a profession, trade or employment is vocational training, whatever the age and the level of training of the pupils or students, even if the training programme includes an element of general education.

No longer self-employed?

What happens to someone who has been self-employed and then registers with the Jobcentre as involuntarily unemployed and looking for work? It depends on whether s/he continues to be self-employed while also registering as available for employed work. A self-employed person does not necessarily cease to be self-employed just because they do not have any contract at that particular time: if they are actively seeking self-employed work then they can still be held to be ‘self-employed’ (see this case).

However, the domestic implementation of Directive 2004.38/EC appears to be at odds with the directive itself. Domestic law suggests that the status of being self-employed is only retained where someone cannot work because of sickness. The directive implies that someone can retain their right to reside in all the ways a worker can as set out above.  So if you have a case on this, it would be helpful to get advice on it from the Aire Centre who offer advice on European rights cases.

Pregnancy and maternity

The situation of former workers who become pregnant is more complicated. The DWP often tells women in the late stages of pregnancy to stop signing on as available for work. If they stop being available for work, then they lose their workers' rights, unless they are 'temporarily unable to work due to illness' (which may be the case if the pregnancy is complicated or there is, for example, high blood pressure). Once a child is born, women are often encouraged to stop claiming as unemployed and available for work, and this will also result in a loss of workers' or jobseekers' rights. The DWP has said that it will address this as a result of a Serious Case Review (pdf) into a child's death that resulted from such refusal of benefits. A Court of Appeal case has also established that, where a claimant who has worked before tells the jobcentre that she is looking for work she should be treated as a former worker, with a right to reside as such, whether or not she makes a formal claim for JSA or “signs on”.  You can find DWP guidance on this here (pdf).

The Court of Justice of the European Union decided in 2014 that a woman who gives up work because of the physical constraints on her of her pregnancy or of the aftermath of childbirth is a worker who is ‘temporarily unable to work’ provided that she is able to return to work, or find another job, within a reasonable period after the birth of her child. If that is the case, she remains a ‘worker’: St Prix v SSWP (C-507/12, June 2014, CJEU).

It is important to note that women in this situation may have rights if they are caring for other children who are in education: this is explored in advising EEA family members.

Jobseekers who have never worked or who have been out of the labour market and re-enter

If an EEA citizen starts to look for work in the UK, or has worked but is now out of the labour market (not available for work or covered by workers' rights) and now seeks work, s/he is treated as a jobseeker. As such, s/he can claim IBJSA once s/he is able to pass the habitual residence test (which s/he cannot do within the first three months after arrival in the UK as a result of benefit rule changes from 1st January 2014). But s/he is not eligible for a housing allocation or homelessness assistance. If IBJSA is claimed after April 1st 2014, there is no linked entitlement to housing benefit.  Those who claimed HB before that date have transitional protection which is lost if there is a break in claim.

For those who have worked and then lost their workers' rights, starting again as a workseeker is an option but they will not be able to claim HB after April 1st 2014.  However, changes to the EEA regulations introduced on 1st January 2014 mean that the workseeker right to reside is kept for six months, after which time it will only be retained if the workseeker provides ‘compelling evidence that he is continuing to seek employment and has a genuine chance of being engaged’.

Chartered Institute of Housing

Background Topics

How can we improve housing for new migrants in the UK?

Chartered Institute of Housing