[Region/Directorate]

	Guidance, Litigation and Advice Complex Advice Team 14^th Floor Lunar House Wellesley Road Croydon CR9 2BY
Matt Raven (by email) [FOI #11130 email]	Web www.ukba.homeoffice.gov.uk
7 August 2009
Ref: 11791

Dear Mr Raven,

Thank you for your email of 29 April 2009 where you have requested information about the Government's Gurkha settlement policy. This falls to be dealt with under the Freedom of Information Act 2000.

You asked for details of the calculation used to determine the £1.4 billion cost of settlement rights for Gurkhas.

I can confirm that this information is held by the UK Border Agency. Please find my response below.

The estimated annual cost of £1.4 billion was the result of cross Government consultation on the potential financial cost to the UK of allowing all former Gurkhas to settle here. This figure assumes that all those who retired between 1948 and 1997 would choose to settle if they were able to do so.

The summary of financial implications is set out in below. It sets out the estimated cost for 3 scenarios:

that all 36,000 main applicants would choose to settle in the UK
that 24,000 main applicants would choose to settle in the UK
that 12,000 main applicants would choose to settle in the UK.

	36,000 main applicants	24,000 main applicants	12,000 main applicants
Total state benefits and working age benefits excluding MOD	£980-1200 million	£528 - 800 million	£264 - 400 million
Housing and homelessness benefits	£72 million	£54 million	£24 million
Tax credits and child benefits	£40 - 45 million	£30 million	£15 million
Health costs	£286 million	£190 million	£95 million
Education costs	£80.3 million	£54 million	£27 million

To arrive at these figures we had to make a number of assumptions.

Assumptions

Number of applicants and dependants:

The estimated numbers of working age main applicants takes no account of any barriers presented by language or any disability.
The number of dependants was calculated including spouse, children under 18, unmarried dependant children 18-30, elderly parents living with the main applicant - and assuming half of children 18-30 are married.

Total State Pension Benefits and Working Age benefits:

Temporary accommodation cost estimated at £10,400 per year.
All children under 18 are eligible for CTC and child benefit.
A `steady state' level i.e. as new retired Gurkhas settle in the UK they will essentially `replace' those whose children cease to be eligible for CTC/child benefit.
100% take up of tax credits and child benefit.
All settling families are on CTC maximum award. None of the dependants work and there is no WTC cost.
Assumed 8759 households with children under 18.

NHS Healthcare:

Estimated healthcare cost was based on average spend per head of the UK.
The estimated cost does not include the cost of social care.

Education:

Based on CSR commitment to fund pupils an average of £6600 each in 2010/11 (best estimate).
Assumption that there will be12, 161 children under the age of 18.

The calculations do not take account of any tax or national insurance contributions that former Gurkhas may have made in the past or that they may make in the future.

Yours sincerely,

J Wright

Complex Advice Team

Complaints Procedure

If you are dissatisfied with this response you may request an independent internal review of our handling of your request. Internal review requests should be submitted within two months of the UK Border Agency sending a substantive reply to your original request and should be addressed to:

UK Border Agency
Central Freedom of Information Team
11th Floor
Lunar House, Short Corridor
40 Wellesley Road
Croydon
CR9 2BY

During the independent review the department's handling of your information request will be reassessed by staff who were not involved in providing you with this response. Should you remain dissatisfied after this internal review, you will have a right of complaint to the Information Commissioner as established by section 50 of the Freedom of Information Act.