Revisiting the Immigration Act 2014: a focus on NHS charges for temporary migrants

The UK is in the midst of implementing a series of immigration measures made law by the Immigration Act 2014 (the Act). The latest of these is the immigration health surcharge (IHS) for persons coming to the UK for longer than six months, which came into effect on 6 April 2015, together with confirmation of the NHS charges applicable to overseas visitors.

The Immigration Health Surcharge

Non-EEA temporary migrants applying to enter the UK for more than six months, or applying to extend their leave to remain, are required to pay £200 per person per year, payable upfront at the time of submitting their application. The amount payable by students has been set at a reduced figure of £150 per annum. The surcharge comes from s38 of the Act and the provisions are contained in the Immigration (Health Charges) Order 2015, on which the Department of Health has issued guidance.

The government’s key objectives for introducing the Act have been to prevent the abuse by migrants of public services and to reduce pull factors which encourage migrants to come to the UK for the wrong reasons. However, considering the simultaneous rise on 6 April 2015 of government fees across many visa categories, it is becoming increasingly apparent that immigration applications generate a substantial source of revenue for the government. In this vein, James Brokenshire, who at the time of writing is the current Minister for Security and Immigration, has estimated that the government will recoup up to £1.7bn over the next ten years from the surcharge to help pay for the cost of NHS treatment given to temporary migrants. The Home Office states that it considers the surcharge to be at a competitive level, in recognition of the contribution temporary migrants make to the wider economy.

In the NHS Cost Recovery Programme impact assessment of 14 June 2014, it was estimated that for non-EEA visitors and temporary migrants and non-EEA expats the total cost to the NHS is around £1.1bn, of which in the year 2013/14 only 30% was recovered. The cost for EEA visitors and non-permanent residents is around £340m, all of which is potentially recoverable through the European Health Insurance Card and other schemes.

It is therefore a legitimate concern of ministers, and of the UK public that limited NHS resources are spent appropriately and that British nationals or persons settled in the UK do not have to shoulder this burden. However, the question is whether it is ethical and justifiable for the affected migrants to bear this cost and whether the long-term impact of the strategy will be beneficial to the UK economy or whether 
it might in fact be harmful. Quite apart 
from the costs implications, what impact will the regime have on the quality of NHS service migrants receive? For example where a person is unable to prove that 
they have paid the surcharge, is there 
a risk that in some cases their health 
could be compromised or that they 
could be wrongly charged?

How does the charge work in practice?

The charge is payable where the applicant is a non-EEA national and they are applying to work, study or join their family in the UK for more than six months after 6 April 2015, as well as applicants making applications from within the UK.

The following categories of migrants are exempt from having to pay the charge:

  • the non-EEA family members of EEA nationals exercising treaty rights of free movement in the UK;
  • applicants (or their dependants) of Tier 2 Intra-Company Transfer visas;
  • Children under 18 who have been taken into care by a local authority;
  • nationals of Australia or New Zealand;
  • dependants of a member of the UK’s armed forces;
  • dependants of a member of another country’s forces who are exempt from immigration control;
  • relevant civilian employees employed by the North Atlantic Treaty Organisation (NATO) or the Australian Department of Defence in the UK (or their dependants);
  • those applying for indefinite leave 
to remain;
  • those applying for a visa for the Isle of Man or Channel Islands;
  • British overseas territory citizens resident in the Falkland Islands;
  • asylum seekers or applicants for humanitarian protection (or their dependants);
  • identified victims of human trafficking (or their dependants)
  • Home Office’s domestic violence concession applicants (or their dependants);
  • Article 3 protection cases and their dependants;
  • where destitute and within the policy on being exempt from paying the fee for an immigration application;
  • diplomats.

What entitlement does it provide?

Payment of the charge will result in free access to NHS treatment at the point of delivery. Certain services, as is the case for UK permanent residents, would still need to be paid for, such as prescriptions, dental treatment and eye tests.

How and when must payment be made?

The surcharge needs to be paid before an applicant submits their visa/leave to remain application, in the same currency as the visa application fee. Payment of the charge results in the issuance of an ‘IHS reference number’, which needs to be quoted on the application. The reference is required in some cases even if an applicant falls within one of the exempt categories highlighted above.

Failure to make a payment (or obtain the required IHS reference) would not only delay the processing of an application but could also lead to a refusal. Where an IHS number has inadvertently been omitted from an application, the Entry Clearance Officer would be entitled to request payment within seven working days (or ten working days for leave to remain applications from within the UK). Unfortunately, unless an applicant falls within one of the exempt categories as highlighted above, they will be refused a visa to the UK if they do not pay within the stated timeframe.

How will NHS staff know it has been paid?

Those who have paid the surcharge, or are exempt from it, are pre-registered onto an electronic NHS database. A ‘green banner’ will appear on the file of each patient who has paid or is exempt, and this is meant to be visible to the NHS staff treating them. Those granted indefinite leave to remain will have this green banner removed from the date of the grant.

What are the implications?

The introduction of the charge was just weeks before the general election, when media scrutiny on public spending was intense. The new charging scheme looks set to recoup up to £1.7bn over the next ten years to help pay for the cost of NHS treatment to temporary migrants, and therefore appears an attractive proposition to ensure that the NHS is receiving the additional funding that it deserves.

However, there are inherent risks in targeting non-EEA migrants in paying this charge, particularly for those who have their own (or employer provided) private medical insurance and who are less likely to benefit from the public health service. Part of the reasoning behind this appears to be that emergency treatment is provided by the NHS, even if an individual has private healthcare insurance.

In addition, the vast majority of applicants do not have the intention to enter the UK for the purposes of ‘health tourism’ and it is widely seen as an insult for them to be perceived in this way. Immigrants arguably already contribute to the public purse via payment for the increasing cost of immigration applications and ongoing contributions towards spending in the UK economy.

Perhaps of most concern is the potential 
for the introduction of such a charge to further divide groups by virtue of their immigration status and perpetuate potentially discriminatory views. Nigel Farage, while debating on the NHS in the TV leaders’ debate in April 2015 claimed that:

‘… you can come into Britain from anywhere in the world and get diagnosed with HIV and get the retro-viral drugs that cost up to £25,000 per year per patient.’

Thankfully, his views were quickly dismissed, with Plaid Cymru’s Leanne 
Wood stating that:

‘… this kind of scaremongering is dangerous… it divides communities 
and it creates stigma to people who 
are ill and I think you ought to be ashamed of yourself.’

Unsurprisingly, the exchange was the most tweeted-about discussion during the debate, sparking outrage among many.

Practical and Ethical Concerns

There is no doubt that the surcharge represents a significant additional financial burden to migrants, or indeed in the case of sponsored migrants, employers who take on the expense on behalf of their employees. Similarly, it represents a burden to family members who are vouching to provide for them ‘without recourse to public funds’ upon their arrival into the UK.

Consider, for example, a sponsored worker seeking to enter the UK to work for a UK employer for five years with his wife and two children. At a rate of £200 per annum per applicant, this represents a hefty sum of £4000, which must be paid upfront at the point of making an immigration application. If we consider this figure in addition to the increased visa application fees of over £1028 per application, the figures start to look eye-wateringly huge.

One may also question how ethical the surcharge is when considering the minimum income thresholds present in the Tier 2 immigration category and the minimum income/savings thresholds for spouses/partners of British citizens; these individuals must earn above a minimum salary threshold and therefore it would follow that they already pay a significantly higher level of tax into the system.

At the time of writing, it is only possible to pay either for the full three years or for five years; there is no mechanism for paying solely for the amount of time that you will remain in the UK, so those applying for the one year would need to pay for three years upfront and then seek to try and receive a refund.

Note that the surcharge will not be refunded if a person decides not to enter the UK after being granted immigration permission to enter. Similarly, partial refunds are not available if an individual leaves the UK (for whatever reason) before their immigration permission expires.

It is also questionable whether, in the long term, the imposition of the surcharge is beneficial to the wider UK economy, particularly if (together with the cost of visa applications) it acts as a deterrent to the fee-paying international students and highly skilled workers who bring essential revenue to the UK.

There is also concern among the medical profession as to whether the new regulations pose a risk to the quality of healthcare the NHS provides to the migrant population.

Considerations for Employers

For employers, the tax implications relating to this must be considered and professional tax advice obtained, as paying this charge could result in having to declare the payment to HM Revenue and Customs as a ‘benefit in kind’. This in turn has the perhaps desired effect of producing greater revenue for the government, as it would effectively reduce an employee’s personal tax allowance thereby leading to them paying additional tax as a consequence.

Employers seeking to bring an employee into the UK from an overseas entity should consider whether it is worth applying for this employee under a Tier 2 (ICT) visa in order to avoid paying the health surcharge. However, this would need to be weighed up against the long term expectations for the employee, and whether employers want the flexibility of having them working for them in the UK beyond five years (the maximum time allowed under Tier 2 ICT). Employees may also prefer to apply under Tier 2 (General) given the possibility of being able to qualify for indefinite leave to remain in the UK.

Employers should also review contracts of employment with regard to potentially introducing claw-back provisions to recoup the expenses associated with the surcharge should an employee leave or resign within a given period.

NHS Charges for Overseas Visitors

The NHS (Charges to Overseas Visitors) Regulations 2015 replaced the 2011 Regulations on 6 April 2015. An ‘overseas visitor’ for the purposes of the Regulations means someone who is not ordinarily resident in the UK. There is no definition of this in the Regulations, however s39 of the Act includes in this category those who require leave to remain and do not have it and those with limited leave. This potentially widens the scope of migrants who are chargeable as previously, where someone had been lawfully resident in the UK for 12 months continuously, they would become exempt from payment. This no longer applies and all temporary migrants are potentially chargeable. Whether the person has paid tax or national insurance in the UK is irrelevant when establishing whether they are chargeable.

Some overseas visitors are exempt from the charges, including those who have paid the surcharge, together with those who are exempt from paying the surcharge (see previous exemptions list) Further, a child born in the UK to an exempt parent is exempt for up to three months after the birth.

It is important to note that charges do not apply to primary care services such as GP services. Accident & Emergency services are not chargeable up until the point that the person requires in-patient treatment or an outpatient appointment. The treatment of infectious diseases is not chargeable in the interests of public health.

Those overseas visitors who are liable to pay for relevant NHS treatment will be charged at 150% of the cost of the treatment received. This will include those visiting the UK for tourist or business purposes and those in non-visitor categories who are applying for visas of six months or less and are not therefore subject to the surcharge, such as those in the fiancé(e) category.

It falls to overseas visitors managers at the NHS institution providing the care to decipher whether someone is chargeable. NHS institutions are under a legal obligation to charge where possible and there is no discretion in this regard, with NHS bodies who fail to charge potentially liable to a penalty fine. There is a risk that this could place undue pressure on health workers to implement charges and to investigate afterwards, potentially leading to unlawful charges being demanded.

A key concern in this regard is that some migrants are likely to have difficulty demonstrating that they are exempt and will be wrongly charged at 150% of the 
cost of treatment. In particular, those 
non-EEA family members of EEA nationals who are exempt from the charges frequently experience (unlawful) Home Office demands to provide substantial documentation evidencing their right to remain, often resulting in extensive delays in receiving confirmation of their immigration status in the UK. In the absence of this, it is impractical to expect NHS administrators to get to grips with complex immigration laws in the interim period, which may result in unlawful charges and possible delays in treatment being administered to such individuals.

Further, where there is a decision still outstanding at the date of expiry of a person’s leave to remain, they are permitted to remain lawfully in the UK further to s3C Immigration Act 1971. As such, if they were previously exempt from the charges they should continue to be exempt, however, it can be tricky to prove this. Those who overstay their visas, even where this is through an administrative error on the part of the Home Office, will automatically become subject to the charges.

The medical sector has expressed 
concern over the new regulations, as 
British Medical Association council chair Dr Mark Porter states:

‘Anyone accessing NHS services should be eligible to do so, but a doctor’s duty is to treat the patient that’s in front of them, not to act as border guard. There is a real question mark over whether these proposals will be workable and how to ensure they do not jeopardise access to healthcare for those who need it. We must ensure that sick and vulnerable patients aren’t deterred from seeking necessary treatment as this can have a knock-on effect on public health.’

There are, however, some safeguards in place to ensure that migrants are not denied necessary treatment. As with the 2011 Regulations, where a course of treatment has been commenced while a person is exempt from paying, no charge will be demanded, even where the person ceases to be exempt partway through the course of their treatment. Further, treatment which is considered to be immediately necessary must be provided by the NHS body even where the person has said that they cannot pay. This includes maternity services in early pregnancy, because of the severe health risks associated with conditions such as eclampsia and pre-eclampsia.

General grounds for refusal

Where the NHS surcharge is payable, a non-EEA national’s application for entry to or permission to remain in the UK may be refused outright under the Immigration Rules if they do not pay the charge at the time of applying.

In the case of non-EEA nationals falling outside the surcharge and who are not otherwise exempt, their application will normally be refused where the person has outstanding NHS charges of at least £1,000. It would seem to follow that where, at the point of applying, the applicant is not in receipt of NHS invoices amounting to £1,000 or more, they can proceed with applying without the risk of a refusal. However this is not always the case. Where a person previously received treatment in the UK, and where at that time their treatment was chargeable (which would normally be the case if for example they were a visitor to the UK or an overstayer at that time), there is a risk of refusal even where the NHS has not raised an invoice at the time of applying.

It is now possible for the NHS and the Home Office to share non-clinical information, following the High Court ruling in R (on the application of W, X, Y and Z) v Secretary of State for Health [2014]. Further, it is now necessary in all applications for permission to enter the UK to disclose details of all prior medical treatment received in the UK. There has been anecdotal evidence, mainly at the appeal stage, of the Home Office contacting the NHS to seek that they raise an invoice, in order that a person’s appeal can be dismissed or their application refused on this basis. Where someone has received NHS treatment previously it is advisable for them to check with an immigration adviser as to whether this was potentially chargeable prior to applying for a visa, in which case they should directly request for an NHS invoice to be raised, and arrange to pay this prior to submitting the application.

Final Thoughts

The IHS and the new regulations on charging for overseas visitors are potential solutions to address a prior failure to recoup the cost of NHS services provided to migrants; however the charges are unduly onerous for those migrants affected and for their sponsors. In particular, the financial implications of paying the surcharge upfront simultaneously with substantial application fees may be simply unworkable for some families, students and employers, potentially jeopardising their ability to apply altogether. Further, it is questionable whether this approach of clawing back revenue from the migrant population is beneficial to the wider UK economy, particularly if it proves to act as a deterrent to the fee-paying international students and highly skilled workers who bring essential revenue and kudos to the UK. Employers will need to consider whether to meet this additional financial burden on behalf of its employees, remaining mindful of tax considerations. They must also ensure that suitable claw-back provisions are incorporated into contractual agreements with employees to recoup the costs associated with this should an employee leave their employment. Finally, it remains to be seen whether the new regulations pose a risk to the quality 
of healthcare the NHS provides to the migrant population. Such an outcome would surely render these charges unworkable 
and unconscionable, regardless of the financial implications.