No-deal Brexit means trouble for Brits living in the EU

Bulletin article
Camino Mortera-Martinez
01 August 2019
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If the UK leaves the EU without a deal, Brits living in EU countries will face a number of hurdles to securing residence. And some will be worse off than others. 

While there is a vigorous debate about the possible impact of a no-deal Brexit on trade, an equally pressing question has yet to command the same attention: what happens to the rights of the approximately 1.3 million British migrants living across the EU if the UK leaves the bloc without a withdrawal agreement?

The thrice-rejected exit deal negotiated by Theresa May provided for a transition period of 21 months (until December 2020) during which EU free movement rights would remain virtually unchanged for British citizens living in Europe, including those arriving up to the end of the transition. After that, Britain and the EU were supposed to have found, or at least be on the way to finding, a new arrangement for regulating migration across the channel. The transition period was designed to give people living and working abroad (or planning to do so) a degree of certainty, while allowing time for the British government and the EU to come to an agreement about their future relationship. But this certainty has come to an end with new British Prime Minister Boris Johnson’s pledge to leave the EU ‘do or die’ on October 31st. The risk of a no-deal exit has never been higher.

No withdrawal agreement means no transition period: if there is no deal, UK citizens living in the EU will become third-country nationals on November 1st. From then on, what happens to them will depend on the country they live in: once the UK walks away from the EU without an insurance policy, migration laws will be decided by each member-state.

Brits living in some countries will be better off than others. For example, Ireland and Malta have already said they will continue to allow British citizens to live and work under roughly the same conditions that they enjoy now after a no-deal Brexit. But other countries have said that UK nationals will enjoy those rights only for a limited period, after which they will be treated like other third-country nationals. In Belgium, Cyprus and Spain this grace period will extend until December 2020, but in France, Sweden and the Netherlands it will end after a year. In Austria and Germany it will last just six months.

All EU countries have said that they will only grant British citizens rights if the UK reciprocates; and EU citizens have had a hard time proving their settled status in Britain – where they have hitherto not had to register as residents and where the new system allowing them to apply for residency has been plagued with problems. Subject to any issues of reciprocity, UK citizens who have lived in EU countries for several years should be less affected by a no-deal exit, but more recent arrivals will face differing degrees of bureaucracy.

Most EU countries have announced that they will allow UK citizens to continue living and working in their countries if they have been resident for at least five years by Brexit day. Many have also said they will make securing settled status easier for British citizens who have resided in the country for less than five years, if they can prove they have been living there lawfully for a reasonable period. To gain permanent residence, British citizens will need to produce evidence of their lawful status. This should be quite straightforward for those residing in countries where registration of EU citizens is mandatory, like Germany or Belgium. But it will prove more complicated for Britons living in France, for example, where there is no obligation to register.

Even in EU member-states where registration exists, British citizens will face new obstacles in a no-deal scenario. Some countries may demand additional requirements to grant residence permits, like proof of a clean criminal record (Austria) or language tests (Lithuania). Those who have been residing in EU-27 countries for less than five years will face even higher hurdles: British citizens may be asked to pass integration tests similar to those applied to non-EU citizens. Some countries’ rules will be harder to navigate than others: for example, Sweden only issues personnummers (a personal identification number needed for everything from paying taxes to borrowing books at public libraries) to foreigners who have been in work for at least a year.

Three categories of British citizen will be particularly hard-hit by a no-deal Brexit. First, those with low or unstable incomes will find it much harder to prove they have the means to support themselves and thus be allowed to stay in an EU member-state (EU free movement rules require EU citizens to have ‘sufficient resources’, but member-states have tougher thresholds for non-EU nationals).

Second, British citizens who work in two or more EU countries, especially those providing services, will struggle to continue their activities. Free movement of services is already patchy within the EU, and promises to become more complex between the UK and the EU-27 after Brexit. This category includes not only consultants and lawyers, but also musicians and sportsmen.

Third, it will become much more difficult for non-EU family members of British citizens living in the EU to join or stay with them, as they will need to comply with more stringent national requirements as opposed to the rather lenient EU rules that apply now. Less conventional families, like same-sex or unmarried couples, will have it hardest: currently, EU citizens in same-sex partnerships are protected by EU rules even in member-states that do not recognise them. If the UK crashes out without a deal, British same-sex couples will no longer be recognised in countries like Romania or Latvia, while unmarried partnerships will not be recognised in Poland or Bulgaria. 

Many British citizens have tried to escape these problems by applying for citizenship elsewhere in the EU. But this has also not proved easy: in Spain, home to over 300,000 British citizens, the law requires Britons to give up their UK passport if they want to become Spanish citizens. And Belgium, where many long-term British EU officials have tried to obtain Belgian nationality, is wary of handing out passports because this could reduce the number of EU positions allotted to Belgian-born citizens, by virtue of nationality quotas.

Johnson’s gamble is that the EU will blink first if the UK looks serious about leaving without a deal. But, as so often, he is misreading the continent. EU countries now assume that no deal is the most likely outcome. That is unnerving news for British citizens living, or hoping to live, in Europe. Johnson and the EU-27 have said that they will respect the rights of those already in place at least for the coming months. But what will happen to Brits moving to the EU after the grace period is over and to those with less conventional jobs and lifestyles is anyone’s guess. A lot will depend on how much goodwill the parties manage to build – but goodwill seems in short supply.

Camino Mortera-Martinez is a senior research fellow at the Centre for European Reform.

Comments

Submitted by Lenox Napier on 01 August 2019, 8:44 am.
If we expats are all rounded up and deported back to the UK (or what remains of it), then expect trouble. Nothing particularly dangerous to society - beyond a large number of slightly addled pensioners driving on the wrong side of the road and talking slowly and loudly to the locals, but another million Remainers on your streets won't help things move forward. Look, we will need housing and the best solution for you is to build 150,000 Quonset Huts on Salisbury Plain for us. Of course, you'll need Polish labourers for this.
Submitted by CHRISTOPHER WORSNUP on 01 August 2019, 10:45 am.
With a Bi-election in Brecon & Radnorshire today, laughing boy's majority could be cut to just one and with the Tory Rebels about to upset the apple cart, get a No Deal out of that Boris the Clown.
Submitted by Ingrid Taylor on 01 August 2019, 10:50 am.
One important group must also be mentioned: the tens of thousands of Britons – mostly, but not all, pensioners – living in the EU who stand to lose healthcare provision entirely on 1 November in a no deal scenario.
These people paid NI in the UK (often they are still UK tax-payers) and, under the S1 system of reciprocal healthcare, their medical expenses in their host country are paid by the UK. Importantly, healthcare is cheaper in many EU countries, e.g. Spain, where it is only half the cost of treatment in the UK, as govt. officials admit.
The choice for those affected is to take out medical insurance in their host country (at prohibitive cost for the over 65s) or come back to the UK, where they can access healthcare, via an already overstretched NHS.
The continued uncertainty over this crucial issue is causing real distress.
Submitted by Abbs Pepper on 01 August 2019, 1:41 pm.
Romania has already agreed a generous deal for British migrants here. Surprisingly, given the UK's attitude to Romanians in Britain, Romanians seem to like us being here and are helping us to stay. Long may it continue - anything could change, I suppose.
Submitted by Phil Williams on 01 August 2019, 2:16 pm.
We have residency in France, so we should be okay. We’re registered for French tax, and for French healthcare.
The only thing (we think) could drive us back would be a catastrophic drop in the value of the pound. We could weather parity, or even slightly below parity, but if it fell below say 90 cents (for large transfers that is), we’d be backing up and heading back. But by God we’d be a damned nuisance if we did.
Submitted by Lin Dillon on 01 August 2019, 3:11 pm.
I am totally worn down by this Brexit fiasco. We are disenfranchised from voting and disenfranchised from representation whilst still paying tax in the UK. (My husband has a small company pension which puts him over the threshold to pay tax.) We don't live in a huge villa - we have what would be described in the UK as a small 2-bedroomed bungalow. We both worked and paid all our taxes and NI contributions for a total, between us, of 79 years. We retired to Greece and love our life here. But now, apart from the fall in income because of the lower exchange rate for the pound, we are living in fear that we will no longer be covered by the S1 medical expenses for those on state pension. Because of the financial situation in Greece we have no chance of selling our property for anything other than silly money - certainly not enough to buy anything in the UK so would have to go into rented property if we returned. But the big thing is - WE DON'T WANT TO GO BACK! It is so unfair that the Government have not only moved the goalposts but have demolished them and thrown them away - without us able to have any say in the matter and without us having anyone to represent us. I am left feeling sad, depressed, disheartened and very, very worried.
Submitted by Malcolm Beveridge on 01 August 2019, 4:34 pm.
To put some perspective into expats being disenfranchised by the voting restrictions, losing your right to UK voting after 15 years. Earlier this year the Overseas Electors Bill was making it's way through the report stages. It was government supported. It was filibustered, (talked out of time) by a conservative MP, Phillip Davis, ERG member. Now, you are perfectly entitled to ask yourself why, just as you are entitled to ask the MP himself, or the PM why. I have my own opinion.
Submitted by Beiderbeck on 15 August 2019, 8:17 am.
Emphasising previous points: Many media reports that Spain will 'guarantee' continuing health care for those UK nationals resident in Spain, omit to include the word 'reciprocity'. Spain has been very clear that reciprocity means legislation to protect EU citizens, in this case Spanish nationals resident in UK - not the troubled 'settled status' scheme, which is not enshrined in UK law - and this UK government has set its' face against that route to certainty. (watch the PM's dismissal of Alberto Costa's question in Parliament ) Additionally those UK pensioners who receive Crown Pensions, continue to contribute NI weekly payments via Contracted Out Deductions from their UK state pensions. This contributor has £46 per week deducted, ( listed on the pensioners original state pension award letter ) totalling £23000, since retirement in Spain - as well as paying UK tax on the Public Service Pension. Not to mention registration with the Hacienda for Spanish taxation. The health care provision in Spain really could be at risk after a 'no deal' exit, although the deductions mentioned will continue. Until recently - no complaint about this - but the present attitude of the UK government, inextricably linked to the plunging value of the £ has a severe impact on the 'normal' UK person retired to Spain. They do not all lounge around on yachts, play golf or inhabit beachside burger bars. Media cameras love to ambush, in the main, holiday makers to espouse UK Spanish residents views from such locations. Yes, there is a very real anxiety about the ability to continue living in Spain, for much longer, as many UK pensioners would struggle to cope with potential withdrawal of health care agreements, the ending of passporting of UK pension payment direct into euro accounts, and other adjustments associated with 'no deal' . Life could soon become very different for many UK residents in Spain.
Submitted by Ian Mulholland on 17 September 2019, 7:43 pm.
Writing as Beiderbeck, on 16 August I posted a comment, and now add to it as follows:
UK state retirement pensions paid in euros in a no deal Brexit scenario
This enquiry comes with a warning that I have never received a reply to this question. It only refers to a 'no deal' scenario exit from the EU.

As a UK state retirement pension recipient, registered as resident in Spain, my UK state pension is paid direct by DWP, into my Spanish euro bank account.
(ref: In 2005 my pension was stopped at Bank of Spain, after the Tax Evasion and Money Laundering EU regs [Gordon Brown initiative] and for 6 months my bank manager passed me cash under the counter, every month until it was resolved. Apparently the problem was that the payment came from an account, other than my own, was under 5000 euros, and was a regular payment - this qualified it for investigation under the EU regs)

On 1st September 2019 DWP announced on the UK GOV web site that state pension payments to UK pensioners in EU countries would continue in a 'no deal' exit scenario.

Having had the experience described above, I wondered HOW the payments would be made, given that the 2005 regs would still apply in the EU, but the 2004 'passporting' regs would not apply to UK payments into EU accounts, as they do now. (unless someone authoritatively tells me they would)

So, I asked DWP the question, which basically is, whether it would continue to be legally possible to continue making these payments in the same way, or, would those payments need to be paid into a UK sterling account, and then transferred via the banking system, as experienced long ago...….ie: before 2004.
This question was asked, simply because I have no reason to trust UK government, and no re-assurance was given in the announcement. The omission was ominous. The answer from the DWP was, as usual, to refer me (artificial intelligence I guess) to FAQ pages ------no, not a good answer.

I guess nobody has ever asked this question - and I doubt an authoritative answer can be found. One needs to remember, that if the UK assumes payments would continue as they do currently, there will be Tax evasion and money laundering obstacles to overcome in that scenario, which could affect large numbers of retirees.
Thanks. Ian (Beiderbeck)
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