I can't help young people in supported housing while benefits trap blocks them from working
4 min read
I have one of the best jobs in the world. Every day, I get to work with some of the most ambitious and resilient young people you could ever hope to meet
Most of them live in supported housing. They’ve escaped homelessness, or experienced care, and are trying to move on with their lives and my job is to support them as they develop the skills they need to live independently, like applying for jobs and budgeting.
A lot of them come to me and are excited to find a job, to gain skills, meet new people and start earning.
A job should be a way forward, a step closer to living independently, but, when a young person in supported housing earns more than £132.78 per week – roughly equivalent to 13 hours of work at the minimum wage for a 21-22 year old – they end up worse off than if they worked less.
When one of the young people I work with, Maddie, secured a hospitality job it was exciting and a chance at a new start for her.
Things went really well, and her manager asked her to take on an extra shift each week. This should have been great news; extra hours mean extra income and an opportunity to stop relying on Universal Credit – but things aren’t that simple.
I see this happening time and time again and it can make my job almost impossible
Whilst living in supported accommodation, the thought of coming off Universal Credit, having your Housing Benefit drastically cut and ending up in rent arrears is terrifying. Taking on the extra shift would mean she starts being charged £230 a month for rent, she would spend an extra £50 on travel to work and suddenly despite earning only a little more per month her expenses have skyrocketed – leaving her with less than before. It’s hard to explain to a manager that she can’t afford to take on the extra shift.
This isn’t just a handful of young people, I see this happening time and time again and it can make my job almost impossible.
I should be telling them to follow their dreams and start earning more - but I have to sit down with them and explain they might end up with less money in their pocket or even in debt. What excited me so much about this career, being able to support amazing young people to achieve their aspirations, has left me tired and frustrated with the system. That’s why Centrepoint is calling on the government to Make Work Pay, and end the benefits trap affecting over 30,000 young people in supported accommodation.
If the rules were fairer, more young people in supported housing could be in work, earning more, and taking real steps towards independence. Their skills and ambition would be contributing to the economy, rather than going to waste or leaving them trapped in a system that punishes them for trying.
We need urgent action. The Treasury can change the benefits system so these young people aren’t penalised for working and have the best possible chance of a future where they can achieve their ambitions.
The trap is the result of an anomaly in the benefit system stemming from how young people’s Housing Benefit and Universal Credit benefits interact.
The government can fix the challenges faced by young people in supported housing by making two minor adjustments to the benefits system:
1. Increasing the Housing Benefit disregard from £5 to £57, to ensure that most people living in supported accommodation would not face a financial cliff edge and instead would be incrementally better off as they increase their working hours.
2. Reducing the Housing Benefit taper rate from 65 per cent to 55 per cent to bring it in line with Universal Credit, to remove the work disincentive. Together, these measures would remove barriers and allow young people who increase their hours and progress in work to see their incomes increase, so they can build financial resilience to move on into independent accommodation.
Not only would this make work pay for ambitious young people, Centrepoint’s research suggests the government would gain almost £13 million, in just one year. Better still, the analysis only looked at the impact over one year, and so in the long run impacts on Treasury savings are likely to be even more beneficial.
Every young person deserves the chance to build a life and start a career. I hope every MP gets behind making it easier for young people in supported housing by removing the obstacles in the way of them meeting their potential, saving the taxpayer millions of pounds in the process.
Luci Lord is a financial coach for young people at the charity Centrepoint
