Young people from disadvantaged backgrounds are abandoning valuable job training opportunities because of a little-known welfare “apprenticeship penalty” that can leave their families out of pocket by as much as £340 a week, government advisers have warned.
The problem is caused by benefit rules that classify a 16-year-old apprentice as an “independent worker” who no longer requires parental support. As a result, the parents’ child benefit and child and disability elements of universal credit are withdrawn. By contrast, the family of a 16-year-old who opts to stay on in full-time education until 18 would see no reduction in benefit income, even if their child works part-time.
According to the Social Security Advisory Committee, the outdated benefit rules cause “documented harm”, distorting poorer children’s career decisions and forcing some to decide between “the right pathway … and an affordable one”. Stephen Brien, the committee chair, said: “This creates a real risk that decisions are driven by short‑term affordability rather than what is right for a young person’s long-term future.”
In one case, a child was given an ultimatum by a parent to “quit the apprenticeship or leave the family home”. They chose the apprenticeship but could not afford to live independently and ended up leaving the job and moving back home. Campaigners said the benefit system should be changed to remove the penalty. “No young person should have to choose between their future and their family’s ability to put food on the table,” said Lucy Schonegevel of Action for Children.
The committee says the apprenticeship penalty is a factor in the rise in young people classified as “Neet” – not in education, employment or training. There are 957,000 Neets, and youth joblessness is at its highest for a decade. The Department for Work and Pensions said it was “carefully considering the report’s recommendations” and pointed to the apprentice minimum wage of £8 per hour, which it said offsets any reduction in household benefits in most scenarios.
