Guidance on Naturalisation as a British citizen by discretion 

The Home Office has finally recognised that Settled Status is not proof of lawful residence in the years prior to its grant. On 14 May 2020, the Home Office published updated Guidance on Naturalisation as a British citizen by discretion (also in current version 01 September 2020). This sets out that:

A “grant of settled status (also known as indefinite leave to enter or remain) will not confirm that they were here lawfully under the EEA Regulations during that time, as defined by the British Nationality Act 1981 as this is not a requirement of the EU Settlement Scheme. You may therefore need to request further information from the applicant to demonstrate this.” 

Where economically inactive citizens do not hold CSI, they are not normally exercising Treaty rights. 

The Guidance envisages that it might be appropriate to exercise discretion in certain circumstances:

When considering such applications you should take into account all the facts surrounding such a breach and make a full assessment about whether discretion should be exercised in their favour. If the breach was because the applicant did not meet an additional/implicit condition of stay, rather than illegal entry or overstaying, such as an EEA or Swiss national not having CSI and can provide sufficient evidence to justify discretion being exercised in their favour

Good Character Guidance

The Good Character Guidance was also updated to version 2.0, dated 30 September 2020, to make specific reference to EEA nationals (published online 02 October 2020):

In assessing whether a person has complied with immigration requirements over the previous 10 years, you must take into account whether they were subject to the EEA Regulations 2016 or the Immigration Act 1971 and whether they complied with the relevant requirements.

It is clearly not enough for discretion to be exercised in relation to the three/five year qualifying period, but the good character assessment is to be on top of this: 

“You must assess whether the applicant was exercising a Treaty right and therefore complying with the requirements of the EEA Regulations 2016…. You must consider whether it is appropriate to exercise discretion in the person’s favour or whether it is appropriate to refuse the application because they do not meet the good character requirement.”

In relation to health insurance, the Guidance now states that: 

Comprehensive Sickness Insurance (CSI) is a legal requirement for EEA and Swiss students, self-sufficient persons and their family members who are residing in the UK with them. 

If a person did not have CSI, you must consider why they did not have it. Where a person has been granted ILR under the EUSS but has been in breach of the EEA Regulations 2016 due to a lack of CSI you must consider whether it is appropriate to exercise discretion in their favour. 

Some applicants will have previously been refused permanent residence on the basis of not having CSI. When considering whether it is appropriate to exercise discretion, you must assess the reasons given for this, and why they did not then obtain CSI.

Applicants for naturalisation holding EU Settled Status where there has been any gap in their exercise of Treaty rights will have to prepare carefully and address any issues in full to give an application the best prospects.