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Brexit update - possible no-deal nightmare looms

WITH LESS than eight months until the UK formally leaves the European Union, what's the prognosis for our many EU national members in the UK and our numerous UK nationals living and working in the EU? Unfortunately, their status has gone from "we don't known" to "possibly not good at all".

See our most recent advice, from an immigration lawyer, on Settled Status for EU nationals in the UK post-Brexit, particularly those who are self-employed. But the Settled Status arrangements are subject to some sort of final deal between the EU and UK. As EU chief negotiator Michael Barnier has had cause to regularly remind the UK Government, "nothing is agreed until everything is agreed". UK Prime Minister Theresa May has so far declined to say whether the UK's "offer" on Settled Status for EU nationals will still apply in the event of a Doomsday no-deal scenario, an outcome which is regrettably looking increasingly likely.

With the UK already admitting it is stockpiling medicines to prepare for the eventuality of a no-deal exit from the European Union, and with not even the worst case scenarios predicting the Port of Dover would "collapse" on Day One after the Customs Union with the EU ends on 29 March next year, the chances of the UK pulling off a deal which includes Settled Status for EU nationals here are diminishing. In the event of a really catastrophic no-deal, it's not even completely certain what happens to the provisionally agreed transitional period up to 31 December 2020 - during which freedom of movement is supposed to continue.

Meanwhile, it emerged in late August that hundreds of passport applications on behalf of children born to in the UK to parents who were EU nationals had been rejected in error, leading to delays of many months.

Children born in the UK, whatever their parents' citizenship, are usually eligible for British nationality. But the Home Office had failed to update its advice to passport applicants on its website, leading to many parents who were nationals of "Accession Eight" EU member states including Poland that joined the EU in 2008 to submit incomplete data. (As the advice hadn't been updated, they hadn't been asked for the all the correct data they needed for the application.)

The inevitable Home Office apology eventually followed, but the incident doesn't auger well for the Home Office's chances of smoothly pulling off the bureaucracy around Settled Status, for which over 3 million EU nationals in the UK will need documentation.

Talking of Settled Status, EU nationals in the UK are supposed to be able to start their applications for this sometime "later in the year". We're still waiting for a date as we go to press, so expect an unseemly rush when it's eventually announced that applications are open.

There's some additional detail on Settled Status, though. In late June, the UK Government announced that EU nationals would have to pay "up to" European £65 for a Settled Status document. They would be asked to prove their identity, prove that they live in the UK, and prove they have no that they have no criminal convictions and that they currently live in the UK. Home Secretary Sajid Javid said the government's default position was to grant, rather than refuse, settled status and pledged that decisions on Settled Status applications would take "a matter of days.".

The Migration Observatory estimates that some half a million of the EU nationals living in the UK won't have been here long enough to qualify for Settled Status by the 31 December 2020 cut off period. They'll have to apply for temporary status to allow them to live here for five years, after which they can then seek Settled Status.

Even more uncertain is the fate of UK nationals resident in the EU. There's nothing firm yet on what the 27 member states will offer them - they're awaiting the nod from the EU, which (see above) has yet to sign a final deal on the UK's exit. Some EU member states - especially those that have a compulsory population register – are likely to automatically grant something equivalent to permanent residency to UK nationals.

The UK apparently concluded an agreement in September 2017 whereby UK nationals living in the EU will continue to get increases to their UK pensions paid to them in those countries. (In some countries that do not have such deals, such as New Zealand, Canada and Australia, UK pension rates paid to UK nationals there are "frozen" and do not rise.)

But the Association of British Insurers (ABI) warned the Commons Brexit Committee at the end of July that it might become "illegal" to pay pensions into the accounts of British pensioners abroad should the UK crash out of the EU without a deal. Brexit Committee Chair Hillary Benn asked ABI's general director Huw Evans, "They might find that they couldn't be paid their pension - is that what you are saying?" Evans replied that, yes, "That is a perfectly plausible risk in the future if no agreement is reached in some countries of the EU." Watch this space.