Explained: Government’s proposed changes to asylum & settlement

Late in 2025 the government put forward two policy papers, one outlining changes it intends to make to the asylum and refugee system,  and one with details of proposed changes to pathways to settlement. The paper on settlement also included a consultation on the proposals open to anyone (individuals or organisations) who wish to respond.

While the content of both papers is of concern from a migration perspective, both policy papers contain measures with the potential to significantly increase homelessness; it is on these that this article will focus.

Changes to the asylum support system

The paper on the asylum and refugee system set out what the government claims are “the most sweeping asylum reforms in modern times”.  This includes a number of changes to the asylum support system.

The government states that it intends to downgrade its “duty” to support those seeking asylum to a “power” to support those it wishes to do so. It specifically states that it intends to withdraw or deny asylum support to:

-          Any person in the asylum system with permission to work (whether or not they are in work)

-          Any person who has “deliberately made themselves destitute”

-          Any person who does not comply with Home Office conditions, for example those who work without permission to do so

-          Any person who commits a criminal offence, refuses to accept accommodation in a different location or who is “disruptive in an accommodation setting”

How would this impact homelessness?

If implemented, these measures would remove accommodation and support from those with no other means to obtain accommodation or support who are therefore likely to end up homeless.

The government also proposes to close down more asylum hotels and to move instead towards increased use of large sites such as the former military facilities currently in use. We anticipate that this may lead to many who find accommodation in such facilities traumatic to abandon their asylum support accommodation and rely on precarious accommodation such as sofa-surfing or end up rough sleeping.

Proposed changes to refugee status

At present, a person who is granted refugee status is granted permission to stay in the UK for 5 years, at the end of which they are able to apply for settlement (also known as Indefinite Leave to Remain or ILR).

The government states that it will change the initial grant of permission to a grant of 30 months (2.5 years) and that most refugees will not become eligible for settlement until they have held permission continuously for 20 years.

The government states that it may revoke refugee status at any point within the 20 year pathway to settlement if they deem that the person no longer requires protection.  These measures will increase insecurity for refugees and there is a high likelihood that these measures will increase the risk of people going underground and becoming particularly vulnerable to exploitation and trafficking, in addition to destitution and homelessness.

There is no clarity as to whether the proposed changes will apply to those who already hold refugee status or whether they will only apply to those granted refugee status after the changes are implemented.

How would this impact homelessness?

An increase in the length of the pathway to settlement and shorter grants of permission increases the risk of people “falling off” the pathway by missing a deadline to make an in-time application for an extension of their permission to stay and potentially therefore losing the right to work or claim public funds until their status is rectified.  The government also states that it will consult on the possibility of removing recourse to public funds for those with refugee status. Should they push ahead with this proposal, refugees will no longer be entitled to most welfare benefits, including Universal Credit and Child Benefit, which is likely to increase poverty. They will also become ineligible for benefits designed to prevent and reduce homelessness, such as homelessness assistance and Local Housing Allowance.

Proposed changes to pathways to settlement

The government is consulting on a range of proposed changes to the pathway to settlement.

In particular, it proposes that the standard length of time before a person will become eligible for settlement should be increased from the current standard length of 5 years to 10 years. It also proposes either increasing or decreasing this core 10 year pathway according to a range of criteria. The factors it proposes which may increase a pathway to settlement include:

-          Claiming welfare benefits

-          Entering the UK illegally

-          Overstaying permission to stay at any time

The proposed increases to the core 10 year pathway range in length from an additional 5 years to an additional 20 years.

How would this impact homelessness?

As with the changes to refugee status, any increase in the length of the pathway to settlement risks people falling off the pathway by failing to make an in-time application for extension and losing their right to work or claim public funds.  Also, penalising people for claiming welfare benefits which they are legally entitled to is likely to cause people to live in poverty rather than risk an increase in their pathway to settlement, again increasing the risk of destitution and homelessness.

The government also proposes to introduce additional mandatory eligibility criteria for settlement including applicants having earned at least a minimum amount in a number of years before the settlement application, and potentially increasing the reasons why it might deny someone settlement. This will create a class of people who are never able to settle and will have to perpetually extend their permission to stay, likely at significant ongoing cost – again, increasing the likelihood that people will “fall off” the pathway to settlement and become undocumented.

The government states that it is considering extending the use of the No Recourse to Public Funds condition so that those granted settlement would no longer have access to public funds – unless or until they are eligible to apply for citizenship. If enacted this would, of course, result in a large increase in destitution and homelessness.

While the details provided in the paper are still quite vague, worryingly, the government has stated that it intends the changes to apply to people who are already on the pathway to settlement . It has also indicated that it hopes to start bringing in changes in April this year.

What can you do?

The consultation on the proposed changes to the pathway to settlement (there is no consultation on the changes to asylum and refugee status) is open until 12 February 2026.

1.      We encourage as many organisations and individuals as possible to respond to the consultation, which you can do here. We have produced a more detailed summary of the proposals on the pathway to settlement here and guidance on responding to the consultation here.

2.      We also encourage individuals to write to their MPs and raise their concerns about all of the changes outlined.

For more information, please see the training session below:

January 2026