CB-ESA ends after 365 days, client refused IB-ESA because of no RTR!

We have a number of EEA national clients who have come to the end of their 365 days of CB-ESA and were sent IB-ESA claim form, which they completed and then got the RTR and Hab Res forms.

A couple of them have now been told that they do not have a RTR and are therefore not hab res. both have worked for 10+ years paying tax and NI cont or self employed and registered with HMRC.

We are arguing that for then to have been paid CB-ESA in the first place, shows they worked long enough to therefore retain the right as a former worker temporarily not working and that they both have been in the UK and working for 5+ years so they should both have a permanent RTR. They are both in the WRAG…......

Failing that even if they argue both are permanently out of work as they have both been on ESA for 2+ years then Art. 17 Exemption should apply. Directive 2004/58/EC

anyone have any tips? especially regarding what is considered to be “temporarily” out of work?

Many thanks, Howard