Transforming population and migration statistics: Benefits and income activity patterns

Transforming population and migration statistics
Case Study: Benefits and income activity patterns
Centre for International Migration
Published: 30th January 2019
Coverage: Great Britain, non-UK arrivals in the tax year 13/14 and income and benefits activity across tax years 14/15 to 16/17
Disclaimer: These Research Outputs refer to activity of non-UK
nationals from Migrant Worker Scan linked to HMRC/DWP
income and benefits data and are not Official Statistics.
These research outputs must not be interpreted as an indicator
of the numbers of international migrants in employment and/or
claiming benefits and should not be used as an alternative to
numbers produced by DWP and HMRC.
Key messages
What can linking Migrant Worker Scan (MWS) to HMRC/DWP income and benefits data tell us about
activity patterns of non-UK nationals in Great Britain?
• Benefits and income data can help us measure the overall number of
international migrants present in Great Britain by providing evidence that
they are living here through showing 'signs of activity’.
• Our cohort analysis illustrated that 4 in 5 non-UK nationals had signs of
activity in the income and benefits data following arrival in the country.
• Further analysis found more international migrants were earning and taxed
through Pay As You Earn (PAYE) than claiming benefits. This is consistent
for both EU and non-EU groups.
• This analysis provides additional evidence that, as an indicator of migrants’
presence in the country, the MWS needs to be triangulated with income
and benefits data to show patterns of arrival, earning and claiming benefits.
DWP/HMRC Migrant Worker Scan (MWS)
DWP/
HMRC
Benefits
HMRC
PAYE
income

This case study aims to understand the activity patterns of international
migrants using income and benefit data.
Data sources 1. DWP and HMRC Migrant Worker Scan (MWS)
2. DWP Customer Information System (CIS)
3. DWP and HMRC Income and benefits data
Population coverage Overseas nationals, aged 16 years and over, who have registered for and been
allocated a National Insurance Number (NINo) since 2002.
Methodology Methodology (Slide 3), Activity patterns (Slide 4), Activity classification (Slide 5)
Things you need to know Previous research (Slide 10), Disclaimers (Slide 11),
Things you need to know (Slide 12 and 13)
What are the conditions for working?
A Tier 2 (skilled worker) visa allows non-EU nationals to
work in the UK for a maximum of 5 years or the time given
on the certificate of sponsorship. EU nationals have the
right to live and work in the UK and do not need a work
permit/visa.
What other research is published on international
migrants income and benefit activity?
• The Migration Advisory Committee (MAC) have
published a report1 on the impact of European Economic
Area (EEA) migration in the UK, which includes a focus
on economic factors.
• Various DWP and HMRC publications and statistics –
see Slide 14.
1 https://www.gov.uk/government/publications/migration-advisory-
committee-mac-report-eea-migration
What are the conditions for claiming benefits?
Generally, EEA nationals can access most benefits after 3
months of UK residence. The benefit access rules for non-
EEA migrants are different to those for EEA migrants.
Non-EEA migrants can usually access benefits only after
they have been in the UK for 5 years.
More information can be found in slide 12.
Some benefits can be claimed from abroad. More details
on benefit eligibility can be found on the GOV.uk website
Background
How do overseas nationals register for a NINo?
A NINo is generally required by any overseas adult
national looking to work or claim benefits / tax credits in
the UK. Allocation of a NINo can only take place on arrival
in the UK. A Temporary Reference Number can be
provided while the NINo application is in progress.

*Benefits include: Attendance Allowance, Bereavement Benefit, Carers Allowance, Child Benefit, Disability Living Allowance, Employment Support Allowance,
Housing Benefit, Incapacity Benefit, Income Support, Jobseekers Allowance, Passported Incapacity Benefit, Pension Credit, Personal Independence Payment,
Retirement/State Pension, Tax Credit, Severe Disablement Benefit, Universal Credit, Widows Benefit.
The datasets contain a unique identifier created by DWP specifically for our purposes. The identifier
allows for the linking of the income and benefits data to each other and to MWS and CIS.
DWP Customer Information System (CIS)
Cumulative list of all individuals who have ever had a NINo
Yearly extracts from 2011-2017 (exc. 2012)
Basic demographic information, date of death
UK coverage
DWP/HMRC Migrant Worker Scan (MWS)
Cumulative list of overseas nationals who have registered and been allocated a NINo since 2002
Excludes any Temporary Reference Numbers given before NINo allocation
Extract from December 2017
Includes nationality and self-reported UK arrival date
UK coverage
DWP/HMRC
Benefits
Tax years 2011/12
to 2016/17
Claiming benefits at
some point during tax
year*
GB coverage
HMRC Annual
Earnings
Tax years 2011/12
to 2016/17
Income > £0 in tax year
UK coverage
Benefits coverage
All individuals who
have claimed benefits*
including tax credits,
state/retirement
pension and universal
credit, captured
through various
underlying payment
systems
Income coverage
All individuals for
whom income/tax
information is
submitted to HMRC
via the PAYE system
from employments
(excluding self-
employments),
occupational pensions
or personal pensions
Our linkage methodology

Why might someone appear as having
no activity?
• Self-employed or other employment
not paid through the PAYE
• Student
• Dependant supported by someone
who is economically active
• Economically inactive
• Of pension age but not receiving state
or workplace pension
• Departed the country
• Inaccurate self-reported arrival date
What are activity patterns?
"Activity" can be defined as an individual interacting with an administrative
system. For example, attending a hospital or claiming a benefit.
Integrating data from more than one administrative system enriches this
activity pattern further. This allows us to identify multiple interactions and
strengthens our understanding of residence and reason for stay in the UK.
For income and benefits data, an individual’s activity pattern can vary
depending on many personal and household factors. For overseas
nationals, this can differ further, based on visa and sponsorship conditions.
Activity patterns can be categorised based on frequency of interaction, for
example:
Tax year
11/12 12/13 13/14 14/15 15/16 16/17
Full activity
Benefits
Income
Some activity
Benefits
Income Income
No activity
What will activity patterns tell us?
How different groups of migrants interact
with income and benefits systems whilst in
the UK. We can evaluate:
• Duration of activity and lags between
interactions
• Type of activity within these data
sources
• Country in which activity occurs
Why carry out this research?
As part of the wider consultation on transforming migration statistics across GSS, we are collaborating to explore income
and benefits data as part of the assessment of economic impact.
It is important to further understand the interaction between the systems, what footprints migrants leave in the income
and benefits data sources and how this could provide insights into population change and impact.
Benefits data alone, or conversely income data alone, does not provide the full picture of signs of activity.
Activity patterns

Income and benefits activity over
2014/15, 2015/16 and 2016/17
What does the activity group mean?
Always
Active
Always active on both Claiming benefits and earning and taxed through PAYE in every tax year
PAYE only Earning and taxed through PAYE in each tax year and no benefit claims made
Intermittent activity across both Interaction with one of the data sources across every tax year and sporadic
interaction with the other data source
Benefits only Claiming benefits in each tax year and no interaction with PAYE
Some
Activity
Active after arrival Claiming benefits and/or earning and taxed through PAYE in at least the first tax
year after arrival but activity stops before the end of the period.
Becomes active over time No activity in first tax year(s) followed by information showing claiming benefits
and/or earning and taxed through PAYE in the last tax year(s)
Intermittent over the three years Activity with income and benefits data at the beginning and end of the period or only
in the middle tax year
Classifying income and benefits activity patterns
As an illustration of our research, we took a cohort of non-UK nationals with an estimated arrival during the 2013/14 tax
year and looked across their income and benefits activity over the next three tax years. This cohort provided a
substantial number of both EU and non-EU nationals to allow further disaggregation. Future work is planned to extend
this analysis to further cohorts and look at activity over longer periods.
Firstly the information was classified into the following high level categories:
1. Always Active: Claiming benefits and/or earning and taxed through PAYE in all three tax years
2. Some Activity: Claiming benefits and/or earning and taxed through PAYE in at least one but not all three tax years
3. No Activity: Not claiming benefits and not earning and taxed through PAYE in all three tax years
In addition, more detailed activity groups were created looking at interactions from both data sources over each tax year:
What was the activity for non-UK nationals in our cohort?
We found that 4 in 5 non-UK nationals had activity (always or some) in the income and benefits data.
The largest activity group (25%) were those that became active over time. Another large group were non-UK nationals who were
earning and taxed through PAYE in every tax year and did not claim benefits (19%).

2013/14 2016/17
Income and benefits activity pattern across three tax years for EU nationals who arrived during the 2013/14 tax year
Of our cohort of EU nationals who arrived in the tax year 2013/14, 35% had activity in the income and benefits administrative data
sets in all three of the following tax years, while a further 45% had some activity over the same period. More detailed analysis will
allow us to understand more fully the different patterns and combinations of activity across the two datasets.
A total of 1 in 5 people had no activity recorded over the three years. These people could be students, self-employed, dependants,
economically inactive or people who have since left the country without interacting with either system. Identifying inactivity in
administrative datasets provides important information for research into approaches for measuring emigration.
Most EU nationals have activity on benefits or PAYE systems in the 3 tax years after arrival
Proportions are
based on total EU
nationals with an
estimated arrival in
2013/14
Coverage: Great
Britain

Of the cohort of non-EU nationals who arrived in the tax year 2013/14, around a third of individuals (30%) were always present in the
administrative datasets over the next three years, while half (48%) had some activity. This is similar to the pattern seen for EU nationals.
Variations in their detailed patterns of activity compared to EU nationals likely reflect differences in eligibility to work and claim benefits – for
example, the higher proportion who become active over time (29% compared to 23%). It is important that the impacts of these differences are
understood before using these administrative data sets in a migration and population statistics system.
Eligibility differences are further reflected in the slightly higher proportion of non-EU nationals that were inactive in both datasets, as this group
includes those who had a longer gap between their arrival in the country and registering for a NINo.
Income and benefits activity pattern across three tax years for non-EU nationals who arrived during the 2013/14 tax year
Similar patterns of income and benefits activity were seen for non-EU nationals
2013/14 2016/17
Proportions are
based on total Non-
EU nationals with
an estimated arrival
in 2013/14
Coverage: Great
Britain

It provides evidence for:
• Development of a Statistical Population Dataset from linked
administrative data
Combined activity data from benefits and PAYE shows that
inclusion on the Migrant Worker Scan is not necessarily a good
indicator of presence in the UK. Some of the migrants showing no
activity on these datasets may have left the country.
• Development of rules for stocks and flows approaches
Improved knowledge of how international migrants interact with
benefits and PAYE systems helps to build appropriate data driven
rules for whether people identified on these datasets should be
included in international migration flows or included in population
totals.
Future analysis of the patterns of international migrants’
interactions with these datasets will also inform statistics on other
migration-related topics such as impacts on the economy.
Next steps
To continue our research to understand
the activity patterns of international
migration, using income and benefit data
in collaboration with DWP and HMRC.
The findings from this case study provide important insights that
will be key to the successful development of a population and
migration statistics system based on administrative data sources.
Putting administrative data at the core of our evidence on international migration (UK)
and on population (England and Wales) in 2020

Next steps
To continue our research to understand the activity patterns of international migration, using income and benefit data by:
1. Integrating other data sources
• Include data from HMRC self assessment to cover activity based on self-employment.
• Utilising more granular data from HMRC PAYE Real Time Information (RTI), we will look to extend our
investigation by considering more detailed patterns of employment (e.g. working pattern) and signs of
activity. This would allow for a better understanding of the interactions international migrants have whilst in the
UK and the impact that this has on the economy.
2. Continuing to understand patterns of activity and no activity
• Extending this research to complete the picture by including other groups (e.g. students, pensioners)
alongside information on travel patterns using Home Office administrative data (Exit Checks and
Semaphore).
• Following this, reassess those who appear to have no activity after arrival to the UK so that we can start to
understand and quantify reasons why.
3. Refining our methodology
• Continue to develop our methods to classify a wide variety of activity patterns using income and benefits
data.
• Improve our definition of benefit claimant so that it includes individuals who are a partner of the main
claimant.
• After incorporating more granular data, produce research at lower geographical levels.
4. Collaborating with DWP and HMRC
• Continue to work together with DWP and HMRC to ensure consistency with methods and findings of our
exploratory research with other published statistics and research.
• Invite analysis of our exploratory research from DWP and HMRC colleagues particularly for policy context and
interpretation.

DWP
Data to June 2018 show that there have been around 640,000 NINos registered, 70% of them are EU nationals (source).
Nationality at point of NINo registration of DWP working age benefit recipients
• The latest annual release to November 2017 revealed that 6.7 million people claimed at least one DWP working age benefit.
Of these, 13% were non-UK nationals. The majority (62%) of non-UK claimants were non-EU citizens at the point of NINo
registration. Over half of non-UK claimants (55%) claimed Housing Benefit (HB) only.
Analysis of migrants’ access to income-related benefits
• Over the last five years, there have been significant declines in the number of EEA nationals claiming Jobseekers Allowance
(JSA) and JSA-passported HB, following the introduction of new measures to restrict access to benefits.
• In the period following the introduction of the measures (November 2013 to January 2017), there was a 47% fall in the
number of new JSA claims by EEA nationals, and from November 2013 to November 2016, a 76% fall in the caseload of EEA
nationals claiming JSA.
• New JSA and HB claims made by UK nationals have also fallen and this is partly a reflection of the improved economic
position.
• The amount of time EEA nationals spent on JSA (for short-term claims) had also fallen, from an average of 86 days in 2013 to
an average of 65 days in 2015.
• An increase in the number of non-EEA migrants claiming Pension Credit, Employment Support Allowance and In-Work HB
since 2012 was reported.
HMRC
Income Tax, National Insurance Contributions, tax credits and Child Benefit paid by and to EEA nationals
• The latest annual release, for the tax year 2015/16, showed that EEA nationals are paying more in Income Tax and National
Insurance than they claimed in tax credits and Child Benefit. A similar outcome was found for those who had recently arrived
in the UK (i.e. arrived between 6th April 2012 and 5th April 2016).
• Out of 4.27 million (total tax credits recipient families), 7% of families had at least one non-UK EEA national adult and 2% had
at least one recently arrived non-UK EEA adult.
Please note that our exploratory research is not directly comparable with DWP and HMRC research and
statistics as our analysis reflects combined results from both income and benefits data sources.
Previous research and statistics from DWP and HMRC

• Disclaimer: These Research Outputs on income and benefits activity patterns from non-UK nationals
are not Official Statistics.
• Rather, they are published as outputs from exploratory research to show users of international migration
statistics where we are on our transformation journey to put administrative data at the core of our evidence
on international migration (UK) and on population (England and Wales) in 2020.
• These research outputs must not be interpreted as an indicator of the numbers of international
migrants in employment and/or claiming benefits and should not be used as an alternative to
numbers produced by DWP and HMRC.
• These research outputs are based on experimental analysis of DWP Migrant Worker Scan linked to
DWP/HMRC income and benefits data. We are still developing methods, therefore the numbers or
proportions reported here may change in future reporting on our journey to put administrative data at the
core of population and migration statistics.
• It is important that the information and research presented here be read alongside the population and
migration statistics transformation update report to aid interpretation and avoid misunderstanding.
• These research outputs must not be reproduced without this disclaimer and warning note.
Things you need to know

Nationality:
• Nationality is classified using the International Passenger Survey (IPS) country groupings found in the International
Migration - Table of Contents (citizenship/nationality groupings tab).
• Nationality is grouped into EU and non-EU instead of EEA and non-EEA (which is generally more related to
immigration control) to be consistent with previous research. For this reason the following EEA countries will appear in
the non-EU nationality group: Iceland, Norway and Liechtenstein. Additionally, Swiss nationals are included in the
non-EU nationality group. Switzerland is neither part of the EU or the EEA but is part of the single market so Swiss
nationals have the same rights to live and work in the UK as other EEA nationals.
• The EU nationality group excludes British nationals.
The Migrant Worker Scan (MWS) has been used as the source of nationality information.
• The data extract includes any NINo allocation to overseas adult nationals since 2002, which may mean foreign
nationals arriving before this time period would not be captured in the data. The MWS only includes adults, those
aged 16 and over. Migrant children are allocated differently (for more information see Background Information).
• Nationality is based on individuals’ nationality at the time they first registered for a NINo. There are no records of
individuals holding more than one nationality, nor when a change in nationality occurs after registration. Therefore,
dual citizenships and naturalisation to UK citizenship are not recorded.
• To estimate arrival date, the earliest of the date the NINo was registered and the individual’s self-reported arrival
date was taken. This follows methodology used by DWP and HMRC. In the majority of cases this is the self-reported
arrival date, but there are a small number cases where the NINo registration date is earlier. This is likely to be down to
the arrival date being a date of return following earlier residence in the UK, and so that individual may not truly be a
new arrival for our purposes (and so their NINo registration date gives a more accurate picture).

Benefits data contains a number of different benefits:
• DWP benefits: Attendance Allowance, Bereavement Benefit, Carers Allowance, Disability Living Allowance,
Employment Support Allowance, Housing Benefit, Incapacity Benefit, Income Support, Jobseekers Allowance,
Passported Incapacity Benefit, Pension Credit, Personal Independence Payment, Retirement/State Pension, Severe
Disablement Benefit, Universal Credit, Widows Benefit. HMRC benefits: Child Benefit, Working/Child Tax Credit.
• Not all benefits are captured, IIDB (Industrial Injury Disablement Benefit) scheme is excluded for example.
• A benefit claimant is defined for the purposes of this research as the individual who is claiming benefit on their own
behalf, or in the case of Universal Credit (UC), Pension Credit (PC) and Housing Benefit (HB), an individual who is
part of a single or couple claim for benefit. For household level benefits (UC, PC and HB), only the main claimant is
included in our research for simplicity and therefore an individual is not counted as a benefit claimant if they are a
partner of the main claimant (this is not in line with DWP official statistics). Likewise, also excluded are those who are
a beneficiary of another person's benefit claim but are not claiming any benefit in their own right.
• Universal Credit is being introduced in stages across the UK. It will replace child/working tax credit, HB, income
support, income-based JSA and income-related employment support allowance.
• Some benefits can be claimed from abroad. More details on benefit eligibility can be found on www.gov.uk
Access to benefits for Non-EEA nationals (more information can be found here)
• Most non-EEA migrants are subject to immigration control by UK Visas and are admitted to the UK on the basis that
they have no recourse to public funds. They cannot claim DWP benefits (including means-tested benefits such as
JSA and HB) until they’ve been granted Indefinite Leave to Remain, which in most cases means living in the UK for at
least five years.
• However, some groups of non-EEA nationals are given certain types of leave to enter or remain in the UK which
gives them access to benefits for the duration of their leave to remain if their leave grants access to public funds, for
example, people who have been granted: Refugee Status, Humanitarian Protection, certain types of discretionary
leave or temporary leave to enter/remain.
• Sponsored immigrants from outside the EEA who are given indefinite leave to enter or remain in the UK are admitted
to the UK on the understanding that they have relatives who are prepared to support them without recourse to public
funds. They cannot make a claim for income related benefits for a period of five years.

Annual extracts of the Customer Information System (CIS) were used to identify GB country of residence (using their
correspondence address at the point of the annual data extract) and notification of death.
• Activity data from the tax years preceding an individual’s death have been included in this research.
• Our analysis covered Great Britain, rather than UK, to ensure cohesion across data sources. People who were
recorded as not residing in England, Scotland or Wales on every year of the CIS were therefore excluded.
Income data are taken from HMRC’s Pay As You Earn (PAYE) system.
• The data includes an annualised income amount which we have used to determine if an individual earned at any
point in the tax year. It does not imply that they were present in the country for the full period.
• It is not possible within the PAYE data that we’ve been supplied to distinguish between individuals in employment and
individuals in receipt of occupational or personal pensions.
• It excludes those who are employed but not paid through the PAYE system, for example some small businesses
where all employees earned less than £113 p/w and individuals who are required to fill out a Self Assessment form
(e.g. those who are self-employed).
• People who earned less than the Lower Earnings Limit (LEL) may not be included in the earlier years of the analysis.
Our methods have classified an individual’s income and benefits activity pattern using the data available to us. “No
activity” means they did not appear to interact with the income and benefits administrative data systems which may
include a gap in activity due to the time taken to register and be allocated a NINo.

Contact Us
We would welcome your feedback on the exploratory research
presented here. Please get in touch at:
Email: pop.info@ons.gov.uk
Tel: 01329 444661

Further Links
Go back to: An update on our population and migration statistics transformation journey: A research
engagement report
Explore our other case studies on SlideShare
Transforming population and migration statistics: Administrative data-based population stocks and
flows
Transforming population and migration statistics: Emigration patterns of non-EU students
Transforming population and migration statistics: International student employment activity
Transforming population and migration statistics: NINo and NHS registration lags
Transforming population and migration statistics: Patterns of circular movement into the UK

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