The UK Government introduced the EU Settlement Scheme to enable EEA/Swiss nationals, once they had resided in the UK for five years, to obtain settled status, which will enable them to continue to live in the UK without restriction once the UK leaves the EU.
One of the key features of a settled status application is that the EEA/Swiss national is simply required to show that they have resided in the UK for five continuous years. They are not required, as is the case for applying for permanent residence (PR) under EU law, to demonstrate that they were exercising an EU Treaty Right (such as work, study, self-sufficiency or looking for a job) at all times during that period.
In order for an EEA/Swiss national to demonstrate that they were exercising an EU Treaty Right as a student or a self-sufficient person, they must show that they held comprehensive sickness insurance (CSI), normally in the form of private health insurance, during the relevant period. Many EEA/Swiss nationals did not qualify for PR because they did not hold CSI whilst exercising those treaty rights.
Consequently, EEA/Swiss nationals who had spent some of the five year qualifying period studying or self-sufficient in the UK, but did not hold CSI during the relevant time, welcomed the fact that they did not have to demonstrate that they were exercising an EU Treaty Right in order to qualify for settled status. CSI was therefore all but forgotten, until now…
Normally, EEA/Swiss nationals are eligible to apply for British citizenship once they have held settled status for 12 months (if they are married to a British national, they may be eligible to apply immediately upon obtaining settled status).
One of the requirements to naturalise as a British citizen is that, for the five years (or three years if the EEA / Swiss national is married to a British national) immediately prior to submitting the application, the applicant must not have been in breach of UK immigration laws.
Recently published guidance by the Home Office confirms that for any period before an EEA/Swiss national was granted settled status that falls within the five/three year qualifying period for British citizenship, in order to meet the requirement that the applicant was not in breach of UK immigration laws, the applicant must demonstrate that they were exercising an EU Treaty Right.
For example, let’s take the situation where an EEA national (who is not married to a British citizen) moved to the UK in January 2014 and obtained Settled Status in January 2019. The EEA national may then have been eligible to apply for British citizenship in January 2020. The new guidance means that the EEA national would be required to demonstrate that they had been exercising an EU Treaty Right from January 2015 until January 2019. If the EEA national was not working and was deemed to be self-sufficient during that time, they would have to show that they held CSI. If they could not demonstrate this, they would have to wait until January 2024 before they would qualify for British citizenship, that is five years after they obtained settled status.
Although, admittedly, this new guidance is a correct interpretation of the relevant law, it does seem to run counter to the more liberal (and welcome) approach adopted by the EU Settlement Scheme. It is also unfortunate that this guidance has only been published over a year after the EU Settlement Scheme was introduced. This means that a significant number of EEA/Swiss nationals who have already submitted their applications for naturalisation are going to have them refused due to being deemed to being in breach of UK immigration laws for not having CSI during a period of study or self-sufficiency.
Grant of settled status will not confirm that they were here lawfully under the EEA Regulations during that time, as defined by the British Nationality Act 1981 as this is not a requirement of the EU Settlement Scheme.