Young people on benefits should receive a new “work allowance” so their payments are not reduced from the first pound they earn, according to a major review into the ‘Neets’ crisis.
Alan Milburn is expected to publish his verdict next week on how to tackle the close to one million young people classed as ‘Neets’ – those not in employment, education, or training.
System ‘feels like a gamble’
The Mirror understands the long-awaited report will warn that the existing Universal Credit system traps young people and makes taking on a part-time job “feel like a gamble”.
Under current rules, only those with children or claimants assessed as having limited capability for work, including health conditions, get a work allowance. Everyone else loses 55p of benefit for every £1 they earn, starting from the first £1 of earned income.
Under Mr Milburn’s proposal, every young person currently in receipt of benefits would get a work allowance, set at a value of 16 hours a week at the minimum wage.
Stepping stone to full-time work
His report will argue that for some, 10 or 15 hours a week will be a stepping stone to full-time work. It will also note that Australia, Ireland and Canada all allow claimants to keep part of what they earn before their benefits are cut.
Mr Milburn told The Mirror: “The system makes trying a job feel like a gamble many young people can’t afford to take. We should make it far easier for them to try work and build their hours. A part time job gets a young person on the first rung of the career ladder. It may help them climb.”
The recommendation will form part of Mr Milburn’s report on the ‘Neets’ crisis and follows his interim review in May, which warned of a “lost generation” without urgent action.
Pre-apprenticeship route and next steps
The Mirror has previously reported the review will also call for a new national scheme to help get young people ready to take on apprenticeships. It will urge ministers to create a new “pre-apprenticeship route” to fill the gap between leaving school and entering the world of work.
According to the most recent figures, published in August, there were an estimated 981,000 ‘Neets’ in April to June.
Mr Milburn’s Neets review is expected to be closely followed the following week by Sir Stephen Timms’s report on reforming Personal Independence Payments (PIP), the main disability benefit.
Last week Pat McFadden, the Work and Pensions Secretary, told The Mirror the publication of both would be a “big moment” for the country. He said: “I think it should be seen as asking a really big question about how the welfare state should work in the 21st century.”
