Government to reduce benefits ‘cliff edge’ for people in supported and temporary housing

It follows a campaign backed by 150 groups to change the so-called “benefit trap” which affects an estimated 30,000 young people in supported housing and potentially thousands more living in this tenure type.

In a letter to the chancellor earlier this month, the Youth Chapter Collective called for reforms to how these benefits are tapered so that young people are not trapped in low-income work or welfare dependency. The change will cost the government £10m next year and £25m by 2030-31. 

It was welcomed by Centrepoint, which spearheaded the campaign to change the system. The charity said the move will make a “huge difference”.

Lisa Doyle, Centrepoint’s head of policy and public affairs, said: “Today the chancellor committed to fixing a cruel quirk in the benefit system that will make it easier for young people in supported housing to start work and start working more hours.

“This may be a small part of the Budget, but it will make a huge difference to these young people, most of whom only want to get on in life and have so far found their ambitions blocked by the benefits system.

“This is a significant victory for those trying to escape homelessness, particularly young people at the start of their careers.

“It would not have been possible without our partners and campaigners, particularly those who have joined our calls for the government to make work pay over the last year.

“We are incredibly grateful to them and would like to thank each of them on behalf of the young people we support.”

Another major change to benefits was announced by Rachel Reeves, the chancellor, when she presented her Budget to the House of Commons earlier today.

Ms Reeves revealed that Labour will scrap the two-child limit for Universal Credit from next April.

The change will lift an estimated 450,000 children out of poverty, including 95,000 children in Scotland and 69,000 in Wales.