Britain’s liberal policy towards refugees has been their proud boast. However, from the 1880s to the 1920s, this developed into a restrictive and selective migration policy. During the First World War, 250,000 Belgian refugees arrived in Britain. Inquiring into the archives of the War Refugees Committee Birmingham and District on traces of these developments, a tension linked to the discussion on the allocation of social benefits could be established. This tension, which is referred to as the paradox of the ‘alien citizen’, is explored through the analysis of the access to Britain, the control on British territory and the entitlements of Belgian refugees to social benefits. It is argued that this seeming paradox was the outcome of process of state formation. It reveals how the presence of refugees challenged the British state with the question as to what extent one was responsible to provide for non-citizens, which is still a topical issue.