All change at the Home Office! Government announces major overhaul to reduce net-migration

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The new Home Secretary, James Cleverly, announced a five-point plan aimed at reducing the recently announced record high net-migration figures.

The planned changes will have a big impact on many employers’ ability to sponsor workers from overseas. The changes will be brought into force in the Spring, although an exact date has yet to be confirmed.

The Government estimate that these changes will reduce net migration by 300,000 (based on estimations of new entrants to the UK last year). 

It was also announced that the Graduate route, (launched in 2021), is being reviewed by the Migration Advisory Committee in order to ‘prevent abuse.’ 

The 5 point plan includes:

1. Salary threshold for Skilled Worker sponsorship increasing to £38,700

The general threshold for sponsoring a worker on a Skilled Worker visa is currently £26,200 and the going rate for many roles is higher than this. Applicants must meet the higher of the going rate for their code or the general salary threshold. The general salary threshold was raised in April 2023 from £25,600 and will now increase massively to £38,700.  It is not clear whether individuals who are already on this route and will be applying for extensions after the change takes place will need to be sponsored at the new higher rate in order to qualify for an extension or whether they will be protected by transitional provisions. It is also not clear whether going rates will also be reviewed in line with this increase but the expectation is that they will be reviewed to reflect the increase to the national minimum wage and living wage coming into force in April 2024. 

The government have said that the increase to the salary threshold will encourage businesses to look to local talent first when investing in their workforce. This is designed to compliment the Government’s Back to Work Plan announced in the Autumn Statement which aims to support those with long-term health conditions, disabilities or long-term unemployment to find and stay in work. 

One important exception to the increased salary thresholds is for roles in the health and care sector who will remain exempt from this. In addition, roles that are on national pay scales, such as teachers, will also be exempt from the increase. 

2. Salary discount for shortage occupation list roles to be removed

Under the current rules, roles that are on the Government’s shortage occupation list qualify for a 20% reduction to the salary threshold. Under new plans, this discount will be removed and the shortage occupation list will be replaced with a new ‘Immigration Salary List’ and roles on this list will benefit from a general threshold discount, although the level of discount has not been announced. It is expected that the Immigration Salary List will be shorter than the current shortage occupation list and that the salary discount will be less than the 20% currently on offer for shortage roles. 

3. Health and care sponsors must be registered with the Care Quality Commission

Current immigration rules require an employer who is looking to sponsor workers from overseas to confirm whether they are required to be registered with or inspected or monitored by a regulatory body and to provide evidence of same when applying for a sponsor licence. However, businesses other than regulated care homes would still be able to sponsor health and care workers. Under new rules, in order to sponsor individuals on health and care visas, care providers in England must be regulated by the CQC. It is unclear whether care providers in Scotland, Wales and Northern Ireland will need to be regulated by their equivalent bodies.

4. Removal of ability for health and care workers to bring family members

The government estimate that 120,000 dependants’ visas were granted to family members of health and care workers in the year to September 2023. The government also estimate that the majority of these family members do not work so in a bid to reduce the burden on public services, health and care visa holders will no longer be able to bring dependant family members. It is interesting to note that the government have not provided any figures to substantiate their ‘estimates’ and by our estimations 120,000 dependant applications would have generated over £34 million in visa application fees alone for the government.

This announcement is likely to make the UK a less attractive destination for many health and care workers who would only consider taking up a role in the UK if they were able to bring their family with them. It remains to be seen how this will impact on an industry that is facing huge staffing shortages. Currently, health and care visa applicants and dependants are exempt from paying the Immigration Health Surcharge (IHS). If IHS fees were to be re-introduced for family members of health and care this could generate in the region of £300 million per year for the NHS (based on the new increased IHS levels). However, the Government have not indicated a move in this direction.

5. Increase to minimum income requirement for British citizens and settled persons to sponsor a partner from overseas

Since 9 July 2012, British citizens and those settled in the UK have had to meet a strict financial requirement when supporting a partner’s visa application. Since Brexit, this has also applied to anyone with pre-settled status whose relationship does not meet the requirements of the EU Settlement Scheme.  This financial requirement can be met in a number of specified ways.  For those relying on income, they must meet a minimum income threshold which has been set at £18,600 since 2012. Part of the government’s plan to reduce net migration is to increase the minimum income requirement to bring it in line with the salary requirement for Skilled Workers, to £38,700. The minimum income threshold increases for each child to be sponsored (in addition to a partner) and it is presumed that this will be the same under new rules.

The median wage in the UK is £34,963 which means that most people would not meet the minimum income threshold to sponsor a partner from overseas.

It is also possible for those applying for partner visas to meet the financial requirement through savings; however, it is not clear whether the minimum savings requirement, will also be increased proportionately. At present, anyone relying on savings alone requires £62,500 in savings for at least six months. This is calculated by multiplying the minimum income requirement by 2.5 (the number of years of the visa) and adding £16,000 (the level of savings at which a person becomes ineligible for income-related benefits). With the new minimum income threshold, this would take the minimum savings requirement to £112,750, nearly ten times the average savings level of just over £17,000.

It is not clear whether there will be transitional provisions to protect those who entered the partner route under current rules.

What does this mean for employers?

This announcement follows the news that the Immigration Health Surcharge is to increase from £624 per year of visa to £1035 per year of visa in early 2024. This is expected to raise £1.3 billion per year for the NHS. It also follows the news that civil penalties will increase from £20k to £60k per illegal worker in January 2024.

It is another cost that businesses will have to budget for when putting in place recruitment strategies.  It also no doubt impacts on the number of overseas applicants for roles and the desirability of the UK as a destination for those developing their careers and making choices for their families.

Employers must be ready for a lot of change in 2024 and it will be important for them, particularly those with sponsor licences, to keep up to date to ensure that they remain compliant. We will publish further updates as more detail surrounding the changes is released and we know more. 

Employers may wish to revisit and bring forward their recruitment plans to avoid the increases in the annual salary threshold in 2024 and it is likely that the early part of the year will be a busy one for employers and their Talent teams.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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