Changes to the Points Based System – The UK Border Agency accepts the MAC’s recommendations

During the summer of 2009, the Migration Advisory Committee (MAC), an independent review group, were tasked with providing evidence-based analysis and advice to the government on migration issues, in particular, Tier 2 of the Points Based System. In August 2009, the MAC published their report, recommending changes to certain elements of Tier 2 of the Points Based System in light of the current economic situation. A summary of these changes, due to be enforced soon, although not immediately, is detailed below:

Overall design and operation

The MAC’s analysis of Tier 2 has two major propositions: 1) that both the Resident Labour Market Test route and the Intra-company Transfer route be retained, and 2) that there is no economic case for restricting Tier 2 to the Shortage Occupation route only. The report commended the structure of Tier 2 for being well designed to achieve its intended economic aims, but reported insufficient resources and lack of penalties in enforcement of  these rules. In their report the MAC made sixteen recommendations. The Border Agency has today announced that all of these recommendations (confirmed below) have been accepted and will be implemented:

1.      The UK Border Agency has agreed to consider whether specific professional qualifications will be regarded as the equivalent to National Vocational Qualification (NVQ) level 3, or bachelor’s or master’s degree when allocating points under the new PBS system;

2.      Master’s degrees will be awarded 15 points under Tier 2, instead of the current 10;

3.      The minimum threshold for prospective yearly earnings will be increased. 5 points will now be awarded for an annual salary of £20,000 or more, instead of the previous £17,000;

4.      The points awarded for prospective earnings will be changed; 20 points will be given for prospective annual salaries of least £32,000 rather than £24,000. In effect, this means that for roles not on the Shortage Occupation List, individuals without any qualifications must have prospective earnings of at least £32,000 per annum in order to qualify;

5.      The minimum threshold for gaining 10 points in earnings has been changed to an annual salary of £24,000, and for 15 points, £28,000;

6.      An extra category will be created, allowing those in occupations in key public service areas such as teaching and nursing to claim an additional 5 points under the Resident Labour Market Test route.

Resident Labour Market Test route

7.      It has been confirmed that this current route will not be removed;

8.      The UK Border Agency will change the duration for which a vacancy must be advertised, to ensure resident workers have longer to apply. All employers will be required to advertise vacancies for a period of four weeks before offering the position to non-EEA nationals;

9.      The UKBA may introduce a new certification regime, designed to identify ‘high risk’ employers and verify that they have correctly completed the Resident Labour Market Test.

Intra-company Transfer route

10.  Following the MAC’s recommendations, the Intra-Company Transfer route will not be abolished;

11.  However, as per the MAC’s suggestions, this route should not lead to a right to permanent residence (Indefinite Leave to Remain);

12.  The period for which an employee must be employed by their company overseas in order to qualify under this route will be increased from 6 months to 12 months;

13.  For graduates, a separate scheme will be created under which the employee will be required only to have worked for the overseas branch for 3 months. Under this scheme, employees will be granted a maximum of 12 months’ leave to remain in the UK;

14.  The UKBA has agreed to consider devoting increased resources to the enforcement of immigration rules and penalties for employers.  The present level of resources has been deemed insufficient by the MAC’s report, which also called for further transparency in implementing these rules. This recommendation has been accepted.

Allowances for Tier 2 immigrants:

15.  The UK Border Agency has agreed to the recommendation that allowances should form a lower percentage of earnings. The current maximum is 30%. The MAC appears to have suggested that this be reduced to 25%.

16.  The UKBA and HMRC have both agreed to consider the scope for sharing information, particularly on specific immigrants and their intentions. Both have also agreed to investigate potential abuse of the points-based and tax systems.

The UK Border Agency has not yet announced exactly when they intend to implement these changes, although it would appear that a date at the start of 2010 is likely. At present, the current rules are not affected. The MAC are currently preparing their next report on recommendations for Tier 1 and Shortage Occupations, due to be released this autumn. UK Work Permits Ltd will publish further information on these changes, and when they are due to be implemented as this information is released by the UK Border Agency.

For any clarification on these changes or a free assessment as to how these changes will affect you or your employees, please contact us.