There are many misconceptions regarding the rules connected to the UK Appendix FM and one of the most common is that sponsor needs to have a basic pay of over £18,600 p.a. in order to cover their Thai spouse’s application for a UK Settlement Visa. Often people fail to reach this amount and this can be down to zero-hours contracts or simply because they don’t earn this amount without overtime payments.
In order to make the system fairer and more reflective of many people’s circumstances, the immigration rules state that they must have a gross income of at least £18,600 which means that this can come from a variety of different sources and indeed, overtime pay is one of them. There are, of course, exemptions under Appendix FM and forms of income that cannot be included in the calculation but these will cover further later in this article.
Appendix FM quite clearly sets out the formula for how gross income should be calculated and for those wishing to refer to this in greater detail it is Rule 18 (b). The same principle also applies to those who wish to include bonuses and commission-based pay. This something that is very common in the UK and makes up a large proportion of an individual’s gross annual income and therefore will play an important role in the calculation for Appendix FM purposes.
The rule stresses that the lowest basic pay in the six months leading up to the application that should be used. To use clear figure to illustrate this, the applicant’s sponsor may have received £1,000 gross per month making a total BASIC income of £12,000. If this amount were to be supplement by overtime, bonus payments and/or commission-based pay, there is a good chance that the £18,600 would be reached in order to satisfy the requirements outlined in Appendix FM.
If we were to consider the gross overtime, bonus and commission-based pay of the six months prior to the application and then annualise them as per the example below, then the applicant would satisfy the criteria.
Gross overtime, bonuses and commissioned based pay
To then annualise this amount you would then need to double it or, to go strictly by the formula in Appendix FM, you would need to do (£3,750/6)*12 = £7,500 which would then give the sponsor a total annual gross income of £19,500 (£12,000 + £7,500).
As we previously mentioned, the payments that we have been discussing in this article have been relating to paid employment. Naturally, some people will be receiving benefits in the UK to either supplement an income or as an alternative to their income. However, the following are exempt and would not be included in the calculation for Appendix FM’s financial requirements:
- Disability Living Allowance
- Severe Disablement Allowance
- Industrial Injuries Disablement Benefit
- Personal Independence Payment
- Attendance Allowance
- Carer’s Allowance
- Armed Forces Independence Payment or Guaranteed Income Payment under the Armed Forces Compensation Scheme
- Constant Attendance Allowance, Mobility Support or War Disablement Pension under the War Pensions Scheme
- Police Injury Pension
(*Source: House of Commons Briefing Paper 6724, November 7, 2017)
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