The Government's long awaited Statement of Intent was issued on 13 February 2012. It provides information on how the changes due to come into effect on 6 April will operate and announces further amendments which we have summarised below.  A copy of the statement can be found here.

Working in the UK after completion of studies

As we reported previously, tier 1 (post study work) will close to new applicants on 5 April 2012 and new provisions under tier 2 (general) to cater for graduates will be introduced. Further details on these can be found in our UKBA endorsed guide 'Hiring international graduates under tier 2 after April 2012.' To access the guide, please click here.

However, whilst some of the proposed changes concerning tier 2 are positive, some of the key issues are yet to be addressed. Specifically the UKBA still needs to introduce a new set of SOC codes that will be effective in relation to graduate hires, especially graduates on a rotation programme. It also needs to provide clarity on whether or not the successful completion of a course will be sufficient for the student to switch to tier 2 or the qualification needs to be formally awarded. We understand that the UKBA is considering these and other matters now, as it prepares the detailed guidance. 

We recently hosted a series of seminars with the UKBA during which employers queried whether they would have to wait until graduates holding tier 4 visas are granted leave under tier 2 before they employ them. In the Statement of Intent this question has been answered with confirmation that tier 4 migrants may start work providing their tier 4 leave is still valid and allows them to work and that the work is not regarded as filling a permanent full time vacancy. Therefore, employers should not offer a permanent contract to such graduates until their tier 2 application for leave to remain is approved and evidence of their permission is provided to the employer.

The Statement of Intent also invites relevant sectors to establish a dedicated scheme within tier 5 (Government Authorised Exchange). The purpose of which, it is suggested, will be to allow graduates to undertake a period of professional training in order to obtain a professional qualification prior to their return overseas. The Statement of Intent confirms that the UKBA will make provision to allow these graduates to switch from tier 4 to tier 5 (GAE) in-country to enable them to undertake the training. We would advise employers who are thinking of offering professional training or internships to view the tier 5 intern scheme offered by GTI as an example.

Providing the rules of the scheme are met, this is a quick and effective way to enable employers to offer professional training and internship placements.

Guidance containing full details of the changes are expected to be published in mid-March 2012.

Introduction of tier 1 (graduate entrepreneur) route

The new tier 1 (graduate entrepreneur) route is designed to cater for tier 4 students who develop innovative business ideas during their studies and who wish to stay in the UK to continue to work on them after graduation. The graduate entrepreneur will need to be sponsored by the Higher Education Institution (HEI) from which they have graduated. HEIs will need to register with the UKBA and we will provide further details on the entry requirements as soon as they are published by the UKBA. The UKBA has said that up to 1000 places will be made available divided equally between those HEIs that have registered and hold Highly Trusted Sponsor status. If any migrants that are sponsored by HEIs under this category breach immigration laws, this may impact on the sponsor's licence.

The UKBA has stated that successful applicants will be granted leave to remain for an initial 12 months and can apply to extend that leave for a further 12 months providing the sponsoring HEI is satisfied with the progress they have made. The graduate entrepreneur may also undertake other work for up to 20 hours a week and will be able to sponsor their dependants as long as they meet the tier 1 maintenance requirements.

At the end of their second year, graduate entrepreneurs will be expected to switch into the main tier 1 (entrepreneur) if they wish to remain in the UK. In such cases, the UKBA has stated that it will lower the funds required to switch into the main tier 1 (entrepreneur) route from £200,000 to £50,000 for both this group and those currently in tier 1 (post study work) who have established their own business in the UK. Time in the UK as a graduate entrepreneur will not count towards the qualifying period for settlement.

Interim limit on CAS for tier 4 sponsors

From April 2012 a further allocation of CAS will be made to those sponsors that will continue to be subject to the interim limit. The allocation will cover the nine-month period to the end of December 2012 as by then the Government expects all inspections for Educational Oversight to have been completed.  Given the shorter period, sponsors will be granted additional CAS equivalent to three quarters of their CAS allocation for the first year under the interim limit.

Maximum time students can spend in tier 4 at degree level

The time that students can remain in the UK to study under tier 4 at degree level will be restricted to five years. This does not include time spent in the UK under tier 4 (child) or time spent in the UK whilst studying below degree level (which is restricted to three years). The limit of five years will not apply to the following:

  • students going on to do Master's degrees at an HEI following successful completion of an    undergraduate degree where the course duration was four or five years. The limit for these students   will be six years;
  • those studying for a PhD at an HEI;
  • those studying Medicine; Dentistry; Veterinary Medicine & Science; Architecture; Law and Music at a   Conservatoire.

To minimise refusal rates (which are taken into account when the UKBA determines HTS renewal applications) tier 4 sponsors should check the time that the student has already spent in the UK under tier 4 (general) at degree level and the new course duration before assigning the CAS.

Work placements under tier 4

Work placements for tier 4 students who are studying below degree level will be restricted to a maximum of one third of the course. Those studying at degree level or above at an HEI or those on a course as part of a study abroad programme will retain the current study to work ratio at 50:50. The current exemption for courses where there is a statutory requirement for a longer work placement, for example medicine, will also be retained.

In light of the above and the fact that courses with work placement elements are often scrutinised by the UKBA to ensure that monitoring and attendance obligations are discharged, we suggest that sponsors conduct a review of their programmes and agreements with work placement providers to ensure that they are compliant and will reflect the changes due in April 2012.

End of transitional concession for HEI

From 6 April students issued with a single CAS by an HEI to cover a pre-sessional course followed by the main course of study will need to show that they have attained B1 level English by producing a SELT certificate. The concession allowing this requirement to be waived where the HEI had carried out its own assessment will no longer apply. The HEI will continue to be able to rely on its own assessment of B2 competency where the course is at or above degree level.

Maintenance requirements

Maintenance requirements for students under tier 4, working migrants under tier 1, tier 2 and tier 5 and their dependants will be increased for the first time since 2008. Please click here for a summary of the changes.

Importantly the Statement of Intent announces that it will introduce a maximum amount of £1,000 for accommodation deposits under tier 4 that can be offset against maintenance funds. This will need to be taken into account by tier 4 sponsors when assigning the CAS to their students who may have paid full accommodation costs.