Removing barriers: Financial exclusion of asylum seekers in Ireland and the UK

Removing barriers: Financial exclusion of asylum seekers in Ireland and the UK

Barriers continue to hinder the inclusion of asylum seekers into the United Kingdom and Ireland. Asylum seekers are often neglected after arriving in host countries, where they must confront poor housing, lack of employment opportunities, prejudice, unstable legal status and exclusion from the financial sector.

Of the 35,737 asylum applications filed in the UK in 2019, 56 per cent were refused. However, 2020 marked a dramatic reversal in numbers, due to the coronavirus pandemic and the resulting closure of airports and seaports. From April to June, the number of applications filed was only 5,789, the lowest since 2010. (Nonetheless, some people still tried: An estimated 4,600 arrived in the UK by small boat and dinghy, via the English Channel.)

However, experience shows that those who made it in and whose applications were accepted continue to struggle.

Exclusion from the financial sector: banking access

In compliance with the Criminal Justice Money Laundering and Terrorist Financing Act of 2010, UK regulations require multiple forms of identification, proof of address, national insurance number and evidence of income. Although asylum seekers are provided with temporary documentation, that does not count as an official verification of identity.

One major barrier to opening a bank account is the requirement that applicants provide a passport or other proof of identity. However, many persons fleeing their countries do not have documentation in hand, either due to their forced displacement or because it’s already been submitted to the UK home office as part of their asylum application.

Without the ability to open a bank account, asylum seekers are unable to pay their bills. It also means they are unable to use pay-as-you-go phone services, and thus contact friends and family at home, or sending remittances to those they left behind—an imperative amplified by the COVID-19 pandemic, since cash transactions have largely been replaced by cards for hygiene reasons.

Another barrier is the fact that banks in the United Kingdom often do not provide documents in customers’ native languages. On top of that, asylum seekers often distrust banks and are unfamiliar with the banking system in the United Kingdom.

In Ireland, asylum seekers are excluded from participating in the financial system, finding themselves unable to open even a basic bank account despite residing in the country for months to more than a year. For example, some of the largest banks, such as the Central Bank of Ireland, ask applicants for a passport before opening an account. Yet asylum seekers frequently do not have such documents. And if they do, the government typically takes it as part of the asylum-review process.

Section 33(2a) of Ireland’s Criminal Justice (Money Laundering and Terrorist Financing) Act of 2010 states that banks must identify customers’ identities, but clearly does not limit this proof to passports or national IDs. Yet Irish banks have been rejecting asylum seekers based on a lack of passport.

Why financial inclusion is important

The ability to be self-reliant is often taken for granted, yet is it is a privilege many displaced persons do not have. As documented above, asylum seekers are often excluded from formal financial services such as bank loans and savings and credit accounts while they await a ruling on their status. Thus, it is difficult, if not impossible, to receive international money transfers, make payments, take out loans or earn interest on their savings.

The universal declaration of human rights states that everyone has the right to a standard of living adequate for the health and well-being of himself. This right cannot be fully achieved when states implement legislation that excludes displaced persons from essential financial tools such as access to a bank account

- Yassine Boubout, legal advisor for ImpACT 

This lack of formal financial inclusion leaves asylum seekers no option but to turn to illegal, predatory or even dangerous channels—sometimes resulting in deportation. Desperation may cause asylum seekers to take illegal jobs whilst undocumented in the country, which also places them at risk of deportation and/or denial of government support (mandated under section 115 of the UK Immigration and Asylum Act of 1999).

Financial inclusion is a basic right that should be available to all people regardless of immigration status. Denying them the right to economically participate in society also means asylum seekers are unable to contribute to the social, cultural, civil, economic and political life of their new home, thus creating a divide between nationals and those seeking residence.

The universal declaration of human rights states that everyone has the right to a standard of living adequate for the health and well-being of himself. This right cannot be fully achieved when states implement legislation that excludes displaced persons from essential financial tools such as access to a bank account,” said Yassine Boubout, a legal advisor at ImpACT International.

Since a ruling on asylum status can take months or years, accommodation that allows seekers to integrate is essential for both their wellbeing and the productivity of the overall society/community.

Permission to work

Asylum seekers are eligible to asylum support from the UK government if they are either homeless or do not have enough money to buy essentials such as food and water. Asylum seekers receive a weekly amount of £37.75 per person from the government whilst waiting for the asylum applications results. In addition to this, pregnant mothers and mothers with children aged 1 to 3 are eligible to an extra £3 a week or if you have a baby under 1 year old you will receive an extra £5 a week. Those whose asylum applications have been refused will receive £35 a week. However, without a job, this amount of financial support is not enough to sustain a living, especially for families with young children or pregnant women.

Denying them the right to economically participate in society also means asylum seekers are unable to contribute to the social, cultural, civil, economic and political life of their new home

Asylum seekers in Ireland receive a safe place to stay and access to basic support. If asylum seekers are living in direct provision accommodation, they will receive a weekly payment of €38.80 if you are an adult and €29.80 for children.

In February 2005, a new immigration policy in the UK was passed that allows asylum seekers to work if they are still waiting a year after filing their application. However, they are only permitted to work in jobs for which manpower is in short supply. In addition, work permits expire as soon as a ruling on applications are issued, leaving those who are denied with no option except to accept illegal work or risk their safety by returning to countries they fled due to civil war or persecution.

The UK’s work policy has been challenged by NGOs, international organisations and parliament. In the 2019-2021 parliamentary sessions, several parties called for an amendment to the Immigration and Social Security Coordination Act that would reduce the amount of time seekers must wait before receiving a work permit.

The situation in Ireland is only slightly better, with a waiting period of none months before a work permit is granted.

Recommendations

The UK and Ireland implement a fair immigration system that upholds the rights and dignity of all displaced people who seek refuge there. If given the opportunity to flourish, asylum seekers can be a positive force in the economy who bring new expertise and knowledge into the market.

• Permission-to-work policies should be amended to reduce the waiting period for applicants to six months. This will ensure families can integrate into their new society and become self-reliant. In return, society at large gains new entrepreneurs and transferable skills and exploitative practices such as forced labour will be discouraged.

• Those waiting for asylum decisions should be given access to classes in English and other skills to ensure they are not excluded from work opportunities and social networking.

• Guidance should be provided to financial-service providers to ensure a consistent approach when dealing with asylum seekers and refugees. This should include training in identify and prevent discriminatory and racist practices. In addition, when bank accounts are opened, proof of asylum application should be accepted in the absence of other forms of formal identification.

• Free legal aid should be provided to all asylum seekers.

• Information should be provided in appropriate languages in a format easily comprehensible and accessible by displaced persons. In addition, 1ualified interpreters should be available in banking facilities.

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