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.

Who does this page apply to?

The law about the rights of EEA nationals to live, work and claim access to housing, benefits and other services changed on 1 January 2021 when the Brexit transition period ended. The rights described on this page now only apply to a person who:

• is a citizen of an EEA member state other than Ireland
• is not the family member of a British citizen
• entered the UK before 23:00 on 31 December 2020
• made an application to the EU Settlement Scheme (EUSS) on or before 30 June 2021 or made a late application which has been accepted, and either:
• has EU pre-settled status, or
• his/her EUSS application has not been finally determined.

If all of these apply, this page describes his/her rights to housing and benefits. In any other case that person's entitlements to housing and benefits are described on other pages as follows:

• if s/he is an Irish citizen, or the family member of a British citizen see: British and Irish citizens
• if s/he has been granted EU settled status see: people with indefinite leave
• if s/he entered the UK for the first time after 31 December 2020 see people with limited leave or people with indefinite leave, according to the type of leave s/he was granted; or
• if s/he failed to apply to the EU Settlement Scheme on time (or their late application is refused), s/he may have lost their right to live and work in the UK and may be an overstayer: see people who are destitute.

What are the housing and 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 who have EU pre-settled status or who are waiting for a decision on their application to the EU Settlement Scheme. A person is self-employed if they run their own business - often as a sole trader.

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.

A claimant who for time being has no current business can still be self-employed. It is the nature of self-employment that there are periods of nil or little work and periods of heightened activity. In the former the person may be engaged in various tasks that are necessary to continue the business such as administrative work, maintaining the accounts, marketing and business development. Although a minimum amount of work is necessary to maintain self-employment whether it is sufficient can only be decided in context of the facts at any particular time. The amount of work is only one factor, the claimant's motives and intentions and any other steps they are taking are also relevant: SSWP v JS [2010] UKUT 240 (AAC) at [5].

The DWP has issued guidance for assessing in-work claims including those made by the self-employed. It requires decision makers to ask claimants further questions to test whether the work is 'genuine and effective' where the claimant's average weekly earnings over the last three months are less than the national insurance primary threshold (£242 per week from 6 July 2022).

The guidance cites Bristol City Council v FV [2011] UKUT 494 (AAC) (where the claimant was a street seller of the Big Issue) in support but the decision is clear that if a self-employed person relies on benefits to top up their earnings that fact cannot be used to determine whether the work is effective and genuine. It goes on to say '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'. But in another case about a Big Issue seller (DV v HMRC (CHB) [2017] UKUT 155 (AAC)) it was decided that the claimant’s earnings must provide a real contribution towards the income he/she requires. In this instance the seller only sold 40 magazines a week and made a net profit of £50.

If a person is self-employed, but is not currently working, they retain their self-employed status (and thus their right to reside) if they are temporarily unable to work because of illness or accident, or pregnancy (see HMRC v Dakneviciute C-544/18). A self-employed person also retains their self-employed status after they ceased trading while they are registered unemployed in a similar way to a worker, as set out below.

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).

As noted in the Bristol case above, the key requirement for proving self-employment is that the person is engaged in running their business which in this instance included selling the Big Issue. It is often helpful to provide a record of the activities involved: a simple diary recording all work done including administration, following up leads for work, etc.

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.

Who is a worker?

These rules apply to all EEA nationals who have EU pre-settled status or who are waiting for a decision on their application to the EU Settlement Scheme.

Broadly a person is a worker if they are engaged in paid work for an employer (see below for more details). The concept of worker must not be interpreted narrowly. Any person who performs services under the direction of another in return for payment falls within the definition provided that the activities are real ('effective') and genuine and not so small scale as to be regarded as purely marginal and ancillary (see for example Levin v Staatssecretaris van Justitie (Case 53/81)).

Work does not have to be full-time or permanent, and it does not have to provide a sufficient income for the worker's subsistence. European case law suggests that work for as little as ten hours a week can be sufficient (Rinner-Kuhn R-171/88).

'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.

'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.

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. Working a small number of hours may not indicate marginality where the pay rate is high: earning £50 an hour for four hours a week, for example.

DWP guidance on UC/HB sets up a 'two stage' process. If the claimant has average earnings over the past three months at least equivalent to the national insurance primary threshold (£242 per week from 6 July 2022) then they are automatically considered to be a worker. But if the average earnings are less the decision-maker must consider the following when deciding whether the work is marginal:

• whether the 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.

The DWP guidance (pdf - at para C1499) recognises that '[...] 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 statement itself effectively concedes that routinely refusing applications based on a fixed income threshold is unlawful. But it also goes on to say (at paras C1499-1501) that: ‘Work below the … threshold that is part time or low paid is not necessarily always marginal and ancillary’; ‘the [decision maker] will have to weigh, for example, low hours against long duration of work'; and immediately after gives an example where the decision maker accepts that the claimant is a worker because ‘he has been working for three hours per day, five days a week for the last four months’. If the work is full-time (other than on a fixed-term contract) a period as short as two weeks can be enough to establish worker status (Case C-483/17 - Tarola v Minister for Social Protection).

Frontier workers

A frontier worker is an EEA citizen who was working in the UK before 1 January 2020 but who is not ‘primarily resident’ here. A frontier worker has the same rights as an ordinary EEA worker together with any of his/her family members who has EU pre-settled status. A frontier worker who is temporarily unable to work can retain his/her status in a similar way to an EEA worker (SI 2020 No 1213, Reg 4). 

Retaining worker status: temporary incapacity for work

'Worker' status is retained where the worker is temporarily unable to work due to illness or a work-related accident. This applies to those who are not currently in employment (being ill while an employee is simply being a worker). What counts as ‘temporary’ is not defined and there is no set maximum period. Provided your incapacity is not permanent and there is a reasonable prospect of being able to return to work in the foreseeable future you retain your worker status: LP v SSWP [2016] UKUT 389 (AAC). You do not have to show you have ‘limited capability for work’ – the test is whether you could do the work you were doing previously: HK v SSWP (ESA) [2017] UKUT 421 (AAC). An example of a housing case is Moreno v Hackney LBC (reported in Legal Action, November 2009) where the County Court found that although Mr. Moreno had been unable to work for four years his incapacity was still regarded as being temporary. Hackney Council had failed to consider whether the treatment he was receiving would result in him getting well enough to work. Even if the former worker’s incapacity is permanent, s/he may have acquired a right to reside as a retired worker if s/he has worked in the UK for at least one year.

The DWP Guidance cites CIS/3182/2005 in support of its view that the illness must be that of the worker. However, the reported decision R(IS)4/09 implies that this issue is fact sensitive. In this case the worker retained their status while caring for their temporarily disabled partner and it was indicated that a similar outcome may have been reached if they had been caring for a sick child.

Retaining worker status: pregnancy and maternity

A woman who remains under a contract of employment during her maternity leave continues to be a worker (CIS/4237/2007). Similarly a self-employed woman who intends to return to work after maternity continues to be self-employed (CIS/1042/2008).

A woman who gives up work because of the physical constraints of her pregnancy or of the aftermath of childbirth remains a worker provided that she is able to return to work, or find another job, within a reasonable period after the birth of her child: St Prix v SSWP (C-507/12 CJEU) and SSWP v SFF [2016] AACR 16.

The situation of former workers who become pregnant is more complicated. The DWP often advises women in the late stages of pregnancy to stop signing on as available for work. But this can mean the worker loses her worker status 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). Likewise, once the child is born, the mother is often encouraged to stop claiming as unemployed which also results in the loss of worker status. 

A single parent with a young child or a pregnant woman who claims universal credit should be awarded it, because even though she is exempt from the full work-related requirements she retains her worker status if she registers her intention to seek work: SSWP v Elmi [2011] EWCA Civ 1403.

Retaining worker status: vocational training

An unemployed worker who is engaged in vocational training including training linked to their previous job retains their worker status while doing so.

Advising unemployed workers: first steps

Retaining worker status during a period of unemployment is where a person is at the greatest risk of a poor or otherwise adverse decision. Establishing a right to reside through seeking work is inherently more hazardous than the alternative routes outlined above because:

• The law is complex and there have been frequent revisions to the legislation and guidance due to judicial intervention. Local decision-makers do not always possess the specialist knowledge required or are unaware of the most recent developments.
• Retained worker status provides full access to housing and benefits but is limited to a maximum of six months for anyone who has worked in the UK for less than a year (compared with temporary sickness which does not have an absolute time limit).
• The right to reside as a jobseeker is limited to a maximum of 91 days and is subject to more onerous work search requirements. It is not a qualifying right to reside for universal credit/housing benefit or, except in Scotland, to housing/homelessness assistance.  However, it can be used to establish continuous residence that could help the jobseeker acquire a right to reside as a retired person, a long-term resident, family member or a former family member.

When approaching any problem of this kind advisers should always consider whether an alternative route is available to retaining their worker status (e.g. sickness, maternity) or some other right to reside which is not subject to the above hazards associated with seeking work.

DWP guidance (pdf) on this makes clear (at C1435) that anyone faced with losing benefits at this point should be asked about what other rights to reside they may have, but this often does not happen or takes place in a way that claimants do not understand. Many unemployed claimants will have at least one other right to reside, the most common being:

• a retained worker who is temporarily unable to work because of sickness or maternity (see above) but who has chosen to sign on because they were unaware of the rules or have been poorly advised
• a family member
• a parent of a child in education
• a permanent right of residence (acquired through retirement, permanent incapacity or long-term residence)
• a student or person in vocational training.

The law about acquiring a permanent right of residence through retirement or incapacity is in Regulation 5 of the EEA Regulations.

The importance of registering as unemployed

Even if the claimant is refused benefit (e.g. because they do not have a qualifying right to reside or they have other income) it is imperative that they understand the importance of registering their unemployment (at the Jobcentre Plus office), by claiming (contributory) JSA and/or universal credit and continuing to ‘sign on’ and meet any work-related requirements by being available for, and actively seeking work. By doing so s/he will receive national insurance credits (which may help them qualify for JSA/ESA at a later date), and more importantly any period recorded as jobseeker or a retained worker can help meet the conditions for other rights to reside (e.g. as a retired worker or a former EEA family member).

It is not possible to backdate the registration so any gaps in a person’s record even as short as one month (apart from small ones between finishing work and registering: SSWP v MK [2013] UKUT 163 (AAC) could mean that s/he must start a fresh qualifying period. 

Who is a jobseeker or unemployed retained worker?

An EEA jobseeker is a person who:

• entered the UK looking for work and who is registered with the DWP, but has not yet found employment; or
• worked in the UK for less than one year before becoming unemployed and who has been registered unemployed since for over six months.

In either case, his/her status as a jobseeker lasts for a maximum of 91 days and only if s/he can provide ‘compelling evidence of continuing to seek employment and […] having a genuine chance of being engaged’. The DWP call this the ‘genuine prospects of work’ (GPoW) test and previously applied it everyone after six months registered unemployment.

However, following KH v Bury MBC [2020] UKUT 50 (AAC) the DWP issued guidance (ADM Chapter C1 (pdf), para C1403) to say that the test should not be applied to anyone who had worked in the UK for at least a year – and this rule is now contained in the modified EEA regulations. The overall effect is that:

• an EEA worker who has worked in the UK for at least one year can retain their EEA worker status without time limit for as long as s/he remains registered unemployed (without any special evidence requirements). The one year’s work does not need to be continuous (SSWP v MM [2015] UKUT 128 (AAC))
• an EEA worker who has worked in the UK for less than a year and seeks work immediately after losing their right to reside as a worker (or as a student, a self-sufficient person or self-employed person) retains his/her worker status for up to six months (Barry v LB Southwark [2008] EWCA Civ 1440)
• the GPoW test can only be used to determine if person retains his/her status as a jobseeker. In practice, the DWP only accepts a job offer or evidence that the claimant's job prospects have changed significantly. But the law says ‘compelling evidence’ just means ‘on the balance of probabilities’: SSWP v MB [2017] AACR 6.
• The maximum period allowed as a jobseeker is 91 days after which it cannot be revived until s/he has been absent from the UK for at least 12 months.

Rights to housing and benefits for workers and jobseekers

A person who is an EEA national with pre-settled status (or who is waiting for a decision on their EUSS application) has the following rights to housing and benefits:

• In Scotland and Northern Ireland, a worker, self-employed person or a person who has retained their worker or self-employed status is eligible for housing, homelessness assistance and universal credit/housing benefit
• In Scotland and Northern Ireland an EEA jobseeker is not eligible for universal credit/housing benefit. But in Scotland an EEA jobseeker is eligible for housing and homelessness assistance.

Why are housing rights for EEA nationals different in Scotland?

Throughout the UK a person who has EU pre-settled is not ‘subject to immigration control’ if they are exercising one of their EU free movement rights (as was the position immediately before the UK left the EU).

In England, Wales and Northern Ireland the eligibility regulations for housing and homelessness assistance impose a further condition that also excludes anyone who does not have a qualifying right to reside as a ‘person from abroad’. These national regulations all exclude EEA jobseeker status as a qualifying right.

But in Scotland the only requirement is that the applicant must not be subject to immigration control (see Immigration and Asylum Act 1999, sections 118 and 119). Unlike England, Wales and Northern Ireland there is no power to exclude a person for other reasons (such as their residence).

The reason for this difference is that power to make conditions with respect to immigration control is reserved to the UK Parliament. But all other matters with respect to housing are devolved. So far, the Scottish Parliament has chosen not to legislate to make residence a condition for housing, whereas universal credit and housing benefit are both reserved benefits (so the qualifying conditions with respect to immigration control and residence are the same across the UK).