Two kinds of financial requirements: 

1. a minimum income which has to be demonstrated with specified documents; and
2. “adequate” accommodation for the family.

The word “family” includes other family members who are not applying for leave to enter or remain but who live in the same household.

The Immigration Rule E-ECP.3.4 in Appendix FM says:

The applicant must provide evidence that there will be adequate accommodation, without recourse to public funds, for the family…

“Accommodation” means a flat, house, or a room in a shared property. It must be owned or occupied exclusively by the family, without recourse to public funds.

The following table represents what would, subject to their age, gender and whether they are a couple, be an acceptable maximum number of people to occupy a house with the relevant number of rooms available as sleeping accommodation:

Source: Home Office 

Give proof of your income

Sponsor in receipt of benefits

If the sponsor is on benefits, they meet the income requirement if they receive one or more of the following:

• disability living allowance
• severe disablement allowance
• industrial injury disablement benefit
• attendance allowance
• carer’s allowance
• personal independence payment
• Armed Forces Independence Payment or Guaranteed Income Payment under the Armed Forces Compensation Scheme
• Constant Attendance Allowance, Mobility Supplement or War Disablement Pension under the War Pensions Scheme or
• Police Injury Pension

Other benefits are not accepted as a source of income, and cannot be relied upon.

Specified evidence

A common reason for the refusal in Appendix FM applications is the fact that the applicant fails to submit the “specified evidence” required.

Documents

Documents showing how someone meets the financial requirements must be presented in a specific format, explained in Appendix FM-SE.

For example, bank statements must be originals, or stamped by the bank on each page or accompanied by a cover letter from the financial institution. The bank account must belong to the sponsor or jointly to the sponsor and the applicant.

Payslips must be originals or accompanied by a letter of the employer, which must contain certain information about the employment, such as level of income, type of employment and length of employment.

Savings must be in cash (this means that they can be easily withdrawn, not that you need to keep your money under the mattress).

Foreign currencies must be converted using the oanda.com website.

It is important to ensure that the format of any document is correct, or the application will be refused.

Combined income + savings

Returning to the previous example of John, who wants to rely on savings to meet the minimum income requirement. He needs £78,000 to meet the requirement through savings alone and has £60,000 in a UK account and $20,000 in a US bank account.

John needs to see how much $20,000 is worth in pounds according to the Oanda website. On the day he does the conversion, it is just over £15,000, meaning that he does not have enough to meet the minimum income requirement through savings alone.

In John’s case, though, he can combine £40,600 of savings with his £15,000 annual salary to meet the requirement.

Time period

It is also fundamental that the evidence covers the specified time period.

Generally speaking, the most recent document must not be older than 28 days before the day the application is submitted.

Employment must cover six consecutive months before the application and evidence of self-employment must normally cover the latest financial year. Savings above the required limit must have been in the sponsor’s (or applicant’s) bank account for six consecutive months.

It is difficult to describe all the requirements in different circumstances, and it is therefore very important to look at Appendix FM-SE to ensure all the necessary documents are provided in the right format.

What if I earn less than £18,600 a year?

If your sponsor earns, say, £50,000 a year in a job they have been working in for years you probably don’t need to worry about this section. This is a much more detailed discussion of the minimum income requirement for people whose sponsors don’t earn £18,600, or have just started a new job, or might be struggling to meet the threshold for some other reason.

There are various ways in which the required income and/or savings can be demonstrated. In some cases sources of income can be mixed and matched, in others, they cannot.

The Home Office policy guidance deals with the various categories, and it is not easy reading, even for immigration lawyers who are used to the Rules’ convoluted style.

The categories

Category A: income from salaried or non-salaried employment of the partner (and/or the applicant if they are in the UK with permission to work).

Category B: income from the same sources of category A, in case the sponsor (and/or applicant if in the UK with permission to work) has not been working for the same employer for at least 6 months.

Category C: non-employment income, for example income from property rental or dividends from shares.

Category D: cash savings of the applicant’s partner and/or the applicant, held by the partner and/or the applicant for at least 6 months.

Category E: State (UK or foreign), occupational or private pension of the applicant’s partner and/or the applicant.

Category F or G: income from self-employment, and income as a director or employee of a specified limited company in the UK, of the partner (and/or the applicant if they are in the UK with permission to work). The category depends on which financial year/years are relied upon.

Category A – Sponsor in the UK

It is possible to count income in this category when the sponsor (and/or the applicant if they are in the UK with permission to work) has been working for six months or more for the same employer. The sponsor can be in salaried or non-salaried employment.

Non-salaried employment means employment paid at an hourly or other rate (and the number and/or pattern of hours required to be worked may vary) or paid an amount which varies according to the work undertaken.

When the sponsor is in salaried employment, their salary for the six-month period must be equal or above the required minimum income.

When the sponsor is in non-salaried employment, they will have to calculate the annual equivalent of their average gross monthly income from non-salaried employment in the six months prior to the date of application. This means that they have to add up their actual gross income received in the last six months, divide by six to obtain a monthly average, and multiply by 12, to get the annual average.

If the total income is below the required threshold, it is possible to combine it with Category C, D and E (non-employment income, cash savings and pension), which we will look at below, to meet the requirement.

If you are utterly confused after reading the above, here’s an example that may help clarify things.

Category A – Sponsor returning to the UK with the applicant

Sponsors who have not been living in the UK are in a different position. They also need to having been working for the same employer for the past six months, although in this case it will be an employer overseas. But they also need to also have a job offer of salaried or non-salaried employment in the UK, starting within three months of their return, with an income equal or above the threshold.

Category B – Sponsor in the UK

This category applies to sponsors (and applicants if legally working in the UK) who have not been in the same salaried or non-salaried employment for at least six months before the application, or to those on variable income.

This category requires two different calculations:

1. Gross annual salary/income at the date of the application and
2. Actual salary/income received in the 12 months prior to the application.

Both calculations must show income above the required threshold.

Therefore, firstly the sponsor must calculate their gross annual salary.

If they are in salaried employment, they must count their gross annual salary at the date of the application.

If they are in non-salaried employment, they must add up their total income in the time they have been doing that job prior to the date of application, divided by the number of months and multiplied by 12 (it’s different if payment is weekly or daily).

If the total income is below the required threshold, it is again possible to combine it with income or savings in Categories C, D and E which we will see below.

If the sponsor and the applicant wish to combine their income, they have to rely on Category B only, so it is not possible for one to rely on Category A and the other on Category B.

Secondly, the applicant and/or sponsor have to calculate their actual income (from salaried or non-salaried employment) in the 12 months preceding the application. Income from Category C and E can be added to hit the threshold, but not income from Category D (cash savings).

Category B – Sponsor returning to the UK with the applicant

In this case the sponsor does not need to be employed but needs to have a job offer starting within three months of their return, with a gross annual starting salary (or in non-salaried employment a gross annual income from that employment) equal to or above the required threshold. The income can be “topped up” using Category C, D or E.

The second part of the requirement is that the sponsor must have received a gross amount of salaried or non-salaried employment income overseas equal or above the required threshold, in the 12 months preceding the application. This income can be topped up using Category C or E but not D (cash savings).

Category C – non-employment income

These sources of funds can be counted to demonstrate the minimum income requirement is met:

• Property rental
• Dividends or other income from investments, stocks and shares, bonds or trust funds
• Interest from savings
• Maintenance payments from a former partner of the applicant in relation to the applicant or any children of the applicant and their former partner. Also, maintenance payments from a former partner of the applicant’s partner in relation to that partner
• UK Maternity Allowance, Bereavement Allowance, Bereavement Payment and Widowed Parent’s Allowance
• Payments under the War Pensions Scheme, the Armed Forces Compensation Scheme and the Armed Forces Attributable Benefits Scheme
• A maintenance grant or stipend (not a loan) associated with undergraduate study or postgraduate study or research
• Ongoing insurance payments
• Ongoing payments from a structured legal settlement
• Ongoing royalty payments

Income received from the sources above within 12 months from the date of the application can be counted.

In relation to dividends, those can be counted under Category D only if the company from which dividends are drawn is not a family business of the type described under category F or G, which we will look at later.

As a general rule, Category C can be combined with Category A, B, D and E.

Category D – Cash savings

Only savings above £16,000 can be considered.

This category can be combined with Category A, Category B (part 1, calculating current income), Category C and E, but not with Category B (part 2 – past income) or F and G.

“Cash savings” means that the money must be held in a current, deposit or investment account, provided by a financial institution regulated by the appropriate regulatory body in the UK or overseas. The money must be readily accessible, so for example a pension fund would not count, as money cannot be withdrawn immediately.

It is also important to remember that the savings must have been held for at least six months, must be in the name of the sponsor and/or the applicant, and may come from any legal source. Whoever owns the money will have to sign a declaration stating the source.

Funds previously held in investments, stocks, shares, bonds or trust funds can count if they are liquidated before the application, and it is not necessary to liquidate those six months before the application. The same is true in the case where the money is the proceeds of the sale of a property (dwelling or land). This has to be clearly demonstrated with documentary evidence.

Mohammed’s savings

Mohamed owns various properties in the UK. Two months before his wife and child’s application for entry clearance, he sells one flat and transfers the net proceeds of the sale into his savings account. The amount is £90,000.

Mohamed’s wife Maria and their son Tarek (who is not British) submit an application for entry clearance showing Mohamed’s bank statements for the past two months, a letter from the conveyancing solicitors confirming the sale, evidence from the Land Registry confirming that Mohamed was the owner of the flat for three years, and confirmation that the mortgage on the sold property has been closed and all taxes and fees for the sale have been paid. This confirm that the £90,000 is net profit.

Mohamed needs to show savings of [£16,000 + (£18,600 for his wife + £3,800 for his son) x 2.5] = £72,000. Therefore the requirement is met.

If Mohamed had sold the flat a year ago, he would not have had to provide the evidence about the property, but would have had to show six months’ of bank statements and sign a declaration saying how he came by the money.

Category E – Pension

The gross annual income from any state pension (UK or foreign), occupational pension or private pension received by the applicant’s partner or the applicant can be counted towards the financial requirement if the pension has become a source of income at least 28 days prior to the application.

This category can be combined with Category A, B, C and D.

Category F and G – self-employment and directorships

Where the sponsor (and/or the applicant if they are in the UK with permission to work) is self-employed, they can use the income from

• the last full financial year (Category F) or
• the average from the last two financial years (Category G)

Self-employed people have to use documents covering the last financial year, which runs from 6 April to 5 April of the following year in the UK but may vary in other countries.

You would also have to count your income in Category F or G if you are either the director or employee (or both) of a “specified limited company” in the UK. This essentially means a family business. A specified limited company is where:

1. the person is either a director or employee of the company, or both, or of another company within the same group; and
2. shares are held (directly or indirectly) by the person, their partner or the following family members of the person or their partner: parent, grandparent, child, stepchild, grandchild, brother, sister, uncle, aunt, nephew, niece or first cousin; and
3. any remaining shares are held (directly or indirectly) by fewer than five other persons.

Directors of companies must use the company tax year, which means the period covered by the Company Tax Return CT600, and must cover 12 full months.

Example: As a sole trader in the UK the sponsor would have to submit annual self-assessment tax returns and statement of Account (SA300 or SA302). If running a ltd company then it would be company Tax Return CT600 for the last full financial year and evidence this has been filed with HMRC, such as electronic or written acknowledgment from HMRC and Corporate/business bank statements covering the same 12-month period as the Company Tax Return CT600.

NB: Please note that the list of documents required is much longer, and that this is only a highlight. Still, a sponsor working as a sole trader would need to submit 12 months’ bank statements with their application but might not necessarily have a business bank account, also, when running an ltd company the sponsor would have to submit not only business bank statements but also a personal one.

If a person has different financial years, or the sponsor and the partner’s income cover different-ending financial years, their income from the self-assessment tax return and Company Tax Return financial years cannot be combined.

Income sources not permitted The following sources of income cannot be counted where an application under Appendix FM has to meet the adequate maintenance requirement:

Third-party support.

Financial support from a third-party support cannot be counted, except where permitted under paragraph 1(b) of Appendix FM-SE (e.g. a gift of cash savings which have now been held by the applicant/sponsor for at least 6 months by the date of application and are under their control; alimony or maintenance payments from a former partner; or an academic maintenance grant or stipend).

Promises of support from a third party cannot be counted as they are vulnerable to a change in that person’s circumstances or in the applicant’s and/or sponsor’s relationship with them.

Exceptional circumstances

If the applicant and sponsor are unable to satisfy any of the categories above, other reliable sources of income can be taken into account.

This is the consequence of court cases which led to a relaxation of the rules.

Paragraph GEN 3.1 of the Immigration Rules now states that when

It is evident from the information provided by the applicant that there are exceptional circumstances which could render refusal of the application a breach of Article 8 because it could result in unjustifiably harsh consequences for the applicant, their partner or a relevant child

it is acceptable to produce evidence of other credible and reliable sources of income, financial support, or funds available to the couple.

Most of these difficult financial explanations were taken from the Freemovement.org and Home Office website.

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