Quoted from the Returning Residents page over on UKVisa


What is a returning resident?
A returning resident is someone who has left the UK and has been given permission to come back again to live in the UK, with no time limit.
'Settled' means living in the UK legally with no time limit on your stay.
Back to questions

How do I qualify?
You will qualify if:
  • you were settled in the UK when you last left
  • you have not been away for more than two years and you are coming back to live here permanently, and
  • you did not have help from public funds to leave the UK.
If you have been away from the UK for longer than two years, you may still qualify to return to the UK as a returning resident if, for example, you have strong family ties or have lived here most of your life.



http://www.ukvisas.gov.uk/servlet/Fr...=1018721067624


So, "has been given permission to come back again to live in the UK, with no time limit." and "settled in the UK" means the applicant has ILR?