Variable income and the financial requirement under Appendix FM
In applications made under Appendix FM of the Immigration Rules for entry clearance or leave to remain as a partner the applicant is required to satisfy a financial requirement. The Rules require an applicant to demonstrate, by reference to specified evidence, a gross annual income of at least £18,600. Where the applicant and their partner have children (who are not British or a citizen of an EEA country), the income threshold is increased by £3,800 for the first child and an additional £2,400 for each child thereafter.
For persons who receive a fixed gross annual salary satisfying the financial requirement is relatively straightforward. However, those who receive an income from non-salaried employment, for example those paid at an hourly or other rate and/or whose number of hours worked vary, satisfying the financial requirement can be more complex.
Depending on how long the sponsor (and/or the applicant if they are in the UK with permission to work) has been in non-salaried employment will determine whether this will be a ‘Category A’ application, or a ‘Category B’ application.
Where the applicant and/or sponsor has been in non-salaried employment for at least six months, the application can be made under Category A which will consider the income received within the last six months.
The level of gross annual income relied upon in the application will be the annual equivalent of the applicant/sponsor’s average gross monthly income from the non-salaried employment within the six months immediately before the date of application.
To calculate the annualised average for non-salaried employment in this category, Entry Clearance Officers/Home Office caseworkers will use the following calculation:
Total gross income from employment throughout the six month period, divided by 6 and multiplied by 12.
By way of an example, a sponsor receives the following income each month over the last six months: £2,000, £1,500, £1,500, £3,000, £1,000, £500. The sponsor’s gross non-employment income for the last six months is £9,500. This figure is then divided by six and multiplied by 12 to give the level of annual income towards meeting the financial requirement, in this example the amount is £19,000.
Category B can be used where the sponsor or, in some circumstances the applicant, has been in non-salaried employment for less than six months. In this respect, the calculation is conducted in two parts:
The first stage is to calculate the gross annual income at the date of application which must meet or exceed the level of income required by the Immigration Rules.
In order to calculate the gross annual income at the date of application, the above calculation will be used, i.e. total the amount earned within the last six months, divide by 6 and multiply by 12.
If this figure is less than the level required by the Immigration Rules then the applicant can add the gross amount of any specified non-employment income (for example income from property, interest from shares, etc.), the gross annual income from any state or private pension, or cash savings above £16,000 (at the initial application stage and extension stage the amount above £16,000 will be divided by 2.5 to give the amount which can be added to the income).
The second stage will be to calculate the total amount of non-salaried employment income received in the 12 months prior to the date of application. This amount must also meet or exceed the level of income required by the Immigration Rules.
If this figure is less than the amount required by the Immigration Rules then income from specified non-employment income or income from any state or private pension (but not cash savings) may be counted towards meeting the financial requirement.
Appendix FM-SE of the Immigration Rules sets out very detailed requirements as to how an applicant is to evidence meeting the financial requirement.
If you would like professional legal advice in connection with an application for entry clearance or leave to remain under Appendix FM of the Immigration Rules as a partner then please contact our immigration barristers in London on 0203 617 9173 or email email@example.com.