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UK government issues further details on net migration reduction policy

02 January 2024

The main new detail for employers to note is that occupation-related going rates of pay will be increased alongside the general salary thresholds. There will be transitional arrangements for Skilled Workers, however users of the system will be required to pay more in salaries and other immigration-related costs throughout the period of sponsorship. Senior carers and carers will be prohibited from bringing dependants from the new year, and the increased minimum income requirement under the five-year Partner route will be raised initially to £29,000 instead of £38,700.

The further details were released as a pre-Christmas factsheet, to provide greater certainty to potentially affected individuals who are already in the UK. A more detailed policy statement is due in early 2024.

It is not clear when the Immigration Rules implementing the prohibition on senior carer and carer dependants will be published, but they are intended to be ‘introduced as soon as possible in the new year’.

We have analysed the information in the factsheet and a separately published document on the estimated immigration impacts (estimated impacts document) below. For a summary of the initial announcement, see our earlier article here.

Increases to Skilled Worker route salary thresholds

The factsheet confirms the increases will be implemented in April 2024.

The estimated impacts document reveals that the new £38,700 general salary threshold has been set in line with the median (50th percentile) level for all jobs at Level 3 or above on the Regulated Qualifications Framework (RQF). The most recent data available from the Annual Survey of Hours and Earnings (ASHE) has been used.

There is a lot to unpack about the salary threshold increases, and still many unknowns. Some of the main themes emerging so far are discussed below.

Occupation-related going rates increased to median level

In addition to the general salary threshold for sponsoring a Skilled Worker being raised from £26,200 to £38,700, it has now been confirmed that the going rates for each eligible occupation will be increased from being set at the 25th percentile of the salary band for the occupation, to the 50th percentile. This will mean that only more senior roles within occupations are likely to be sponsored, because employers will not pay above the market rate to sponsor more junior roles.

Also, as the general threshold has been set at the median for all occupations at RQF Level 3 or above, any occupation for which the entire salary range is below the median will be priced out, unless they are included on the Immigration Salary List (more on this below). This is most likely to be the case for Level 3 to 5 occupations, effectively limiting the post-Brexit intention to enable medium-skilled roles to be eligible for sponsorship.

Interestingly, the estimated impacts document covers the imminent increase in the Immigration Health Surcharge (IHS) and observes that it is likely to reduce annual demand for migration by less than 1%. A previous Home Office study found that the demand for visas has low price elasticity. However, the combined effects of application fee increases, IHS increases and salary threshold increases may either have a bigger suppressing effect than the Home Office anticipates, or may lead to a greater burden of immigration-related costs being shifted away from employers and onto individual workers.

Transitional arrangements

The factsheet is not as reassuring as it could be on transitional arrangements, stating that individuals already in the Skilled Worker route before the Immigration Rule changes become effective ‘should’ be exempt from the new median salary levels when they make a change of employment application, extend, or settle. This is worded in a way that falls short of a firm commitment, nevertheless it may provide some level of assurance to potentially affected workers and their sponsors.

Also, it is made clear that any transitional arrangements will not freeze the salary rates for the individual within their scope. As is currently the case, Skilled Workers will still be expected to meet salary rates at the 25th percentile at the time they make a change of employment application, extend, or settle. These rates are updated in the Immigration Rules from time-to-time. All this means in practice is that sponsors will be expected to increase salaries in line with market conditions.

Those who are risk-averse, or who wish to avoid the increased Immigration Health Surcharge (which is due to be effective from 16 January 2024 at the earliest) may consider making an early extension to ensure they have at least the minimum five years’ permission required to take them up to settlement.

Uncertainty around the calculation of salary rates for new entrants and jobs requiring a PhD

It is not yet clear how the existing thresholds may be adjusted for the tradeable points options relating to new entrants to the labour market and jobs requiring the holder to have a PhD or STEM PhD. Unless the discount percentages on the going rates are increased for these options and/or transitional arrangements are applied, it would seem likely that individuals applying under these points options will have to be paid substantially more than currently.

Hopefully further clarity on this aspect will be forthcoming in January as many sponsors have already made offers for prospective Skilled Workers due to start graduate programmes throughout 2024.

General salary threshold exemption for Health and Care visa applicants and education workers

The factsheet reiterates that individuals on Health and Care visas and education workers on national pay scales will be ‘exempt’ from the general salary threshold increase to £38,700. However, it is still not made clear whether the current general threshold of £20,960 for health and education occupations will remain in place or be lifted.

Reforms to Skilled Worker shortage occupations

The factsheet reconfirms that the Migration Advisory Committee (MAC) will be commissioned to reform the Shortage Occupation List (SOL) into a new ‘Immigration Salary List’. The original policy announcement states that this list will have a discounted general salary threshold.

In its review of the shortage occupation list in October 2023, the MAC recommended that all occupations on the Shortage Occupation List be made ineligible where:

  • The salaries are determined according to a national payscale (i.e. education occupations); or
  • The going rate for the occupation exceeds the general salary threshold.

The current SOL will only remain in place until April 2024 when the new salary thresholds are implemented, which suggests the MAC’s work on the Immigration Salary List will be requested for completion on a very short timeframe.

The exact terms of the MAC commission will be made available in January 2024, however it appears that the Immigration Salary List could be used as a ‘safety valve’ to ensure that occupations currently on the SOL are not priced out of eligibility where the salary range for the occupation is below the general salary threshold.

It is assumed that the current 20% discount on the going rate for shortage occupations will be removed in April 2024 at the same time as the general salary thresholds are increased. The factsheet makes no comment on whether there will be transitional arrangements in place to allow individuals sponsored under the current SOL to make a change of employment application, extend or settle relying on the 20% discount, or if sponsors will be required to increase their salaries to be in line with the relevant occupation’s going rate.

Requirement for social care firms sponsoring care workers to be regulated by the Care Quality Commission

According to analysis included in the estimated impacts document, approximately 20% of carers and senior carers making Health and Care visa applications between January and June 2023 were sponsored by social care firms not regulated by the Care Quality Commission (CQC).

The Home Office anticipates that these firms will not seek to register with the CQC, as this would require them to change the services they provide. In effect they will become ‘legacy sponsors’ able to support extensions for their sponsored workers, but not to hire new ones. This seems to suggest that it will not be possible for a change of employment application to be made where a worker wishes to move to a non-CQC-registered sponsor. This could trap some care workers with their current sponsor unless they are able to secure alternative employment with a CQC-registered sponsor.

Prohibition on carers and senior carers being accompanied by partner or child dependants

The factsheet confirms the prohibition will be applied both to carers (SOC code 6145) and senior carers (SOC code 6146). This would avoid the possibility of sponsors misrepresenting the skill level of sponsored carer roles to enable their workers to be accompanied by dependants.

Workers sponsored in these occupation codes before the Rules change in the new year will be allowed to remain with their dependants when extending, changing employment and settling. They will also be allowed to bring their dependants to the UK during the validity of their sponsorship.

Individuals already in the UK (including under routes permitting dependants) who switch into these occupation codes as a Skilled Worker will not be able to remain with or bring their dependants. This would appear primarily to be aimed at limiting the possibility that international students may switch into care work following their studies and expect to be joined by their dependants at that point.

Increased minimum income requirement for family applications

The Government’s clarified policy is that the main minimum income requirement for sponsoring partners under Appendix FM’s five-year route will rise incrementally from £18,600 to £38,700 as follows:

First date of application as a partner (or fiancé(e))  Threshold 
Spring 2024 £29,000 (25th percentile of earnings at RQF3+)
TBA  £34,500 (40th percentile of earnings at RQF3+)
TBA  £38,700 (50th percentile of earnings at RQF3+)

The factsheet states this is intended to give predictability to families, however the lack of dates for the second and third incremental rise leaves it open to the Government to implement a lower threshold now (and potentially also to drop the incremental rises later) without being seen to have had a change of heart on the policy pre-election.

The factsheet also confirms the additional income requirement to sponsor children accompanying or joining a partner will be abolished.

Individuals who enter the five-year partner route, including as a fiancé(e), before the Spring 2024 minimum income requirement increase (and presumably before each incremental increase) will have their applications for extension and settlement considered under the threshold(s) they initially applied under. This will also be the case for children, which means that children joining their parent under the £18,600 threshold will be required to show an additional £3,800 for the first child and £2,400 for each additional child.

Those already in the UK who switch to the five-year partner route will be required to meet the prevailing minimum income requirement in force at the time of their first application under that route.

Graduate route review

The MAC’s review of the Graduate visa route will be commissioned in January 2024, with their work expected to continue into ‘late 2024’.

This timeline is pragmatic, as it will allow the MAC to focus its resources on completing the Immigration Salary List commission in the first quarter of 2024 before turning to the Graduate route review.

Looking to the future, will these policies have to be rolled back?

These policies appear to be a reactionary response to high net migration figures, which have occurred due to a range of short-term humanitarian and acute labour market shortage factors, and which have been predicted to fall without any policy intervention. They come in the lead-up to a general election in which the current Government is perceived to have insufficient control over regular and irregular migration to the UK.

It would appear likely that at least some of these measures may need to be rolled back, or at least modified, due to factors including the following:

  • The UK’s national population predictions are based on long-term net migration of around 205,000, and ongoing migration will be needed to maintain the size of the UK’s workforce in the context of an ageing population;
  • Ireland, the UK’s closest geographical neighbour and a country that has access to free movement of workers from the EEA/Switzerland, has, on 20 December 2023, issued a major announcement liberalising economic migration policies to address ongoing labour shortages;
  • The salary threshold changes may exacerbate skills shortages in medium-skilled occupations in the UK;
  • The prohibition on carers and senior carers being accompanied by dependants may lead them to be at greater risk of financial and other exploitation, as well as mental ill-health;
  • More broadly, there has been no consultation on these changes and the potential negative social effects of them are not yet known;
  • The exemption from the salary threshold increases for healthcare and education sector workers, when combined with increased immigration fees and IHS (for those not eligible for the Health and Care visa), may lead to financial vulnerability for these workers; and
  • The increases to the minimum income requirement for family route applicants may be subject to legal challenge, even at the lower rate of £29,000.

It remains to be seen what modifications may be made to the policies as the details of their implications are worked through. It also remains unknown whether the Government in power after the general election will continue the policies or significantly diverge from them. We will continue to monitor developments and provide further updates as new information becomes available.

If you have queries relating to the topics raised in this article, please contact a member of our Immigration Team.

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