Some parents on benefits to be offered up to £4,500 for child starting apprenticeship

The government has announced that certain parents receiving benefits will be eligible for an annual payment of up to £4,500 to encourage their children to pursue apprenticeships.

This initiative aims to provide a bursary to families, offsetting the Universal Credit payments that would otherwise be forfeited when their children begin employment through apprenticeships. The goal is to eliminate a scenario where a small number of families face a reduction in income due to their children starting apprenticeships.

It is anticipated that a few thousand households will benefit from this payment, as they currently stand to lose between £17 and £330 weekly, depending on their specific circumstances. The bursary will be drawn from a £30 million fund, financed by the growth and skills levy, a tax imposed on employers with annual wage bills exceeding £3 million.

This policy follows a report from the Social Security Advisory Committee, which highlighted the "perverse effects" of the benefits system on young people's career choices. The report cited an example where a single parent with a disabled child could lose up to £340 per week in benefits if their child started an apprenticeship, a sum greater than the typical apprenticeship salary of £258 per week.

Because apprenticeships are classified as paid employment, benefit payments to households are reduced when young people undertake them. The committee argued that this system was hindering government efforts to decrease the number of young people who are not in education, employment, or training (Neet).

A recent report by former Health Secretary Alan Milburn warned that one in six young people could become Neet within the next five years if immediate action is not taken. Official figures indicate that over a million individuals aged 16 to 24 are currently Neet.

The government stated that the new bursary would remove an obstacle to young people entering apprenticeships, enabling them to "earn and learn." Work and Pensions Secretary Pat McFadden commented, "By providing bursaries to those who need them most and fully funding apprenticeship training, we are making sure cost is not the reason someone misses out."

This forms part of a broader package of support for apprenticeships, which includes funding for apprenticeship training for individuals under 25 and additional assistance for employers who hire apprentices.

Prime Minister Andy Burnham has declared he is "on a mission" to reduce the number of Neets. He stated, "The trend is rising at the moment, so the first thing I've got to do is to stop that rise." As part of a series of early policy announcements, Burnham also outlined plans on Tuesday to balance academic and technical skills within the education system.