The Department for Work and Pensions has been urged to improve support for care leavers.
A report by the Social Security Advisory Committee found that one in five care leavers end up homeless within two years of leaving care and called on the DWP to simplify the benefit system for this group.
“The most consistent finding from our focus group discussions was the struggle faced by young claimants living independently in paying for basic essentials such as rent, clothing and food,” said the report. “We were repeatedly told that current benefit rates, including Universal Credit, were inadequate.”
“Many young people have little to no experience of budgeting, and this exacerbates money difficulties for many living independently,” the report added.
The report explores the impacts of the benefits system on young people aged 16 to 24 who live independently of parents or guardians.
Young people living independently appreciate the safety net that the benefits system provides. Many of the young people we spoke to acknowledged that without this support they would be homeless.
The report notes a range of good practice at individual Jobcentre and said a particularly positive development for young claimants living independently is the commitment to reintroduce housing support for all low-income young people. This will reverse a policy that denies housing support to some 18 to 21-year -olds who are not in paid work.
However, in spite of these significant positives, the most consistent finding from the group discussions was the struggle faced by young claimants living independently in paying for basic essentials such as rent, clothing and food, the report added.
“We heard that financial issues faced by this group, particularly those in more vulnerable circumstances, are often so severe that they can lead to eviction, homelessness, or crime – and can undermine positive efforts by work coaches to support these young people into work,” said the report. “We heard that even those young people living independently in low-paid work and in receipt of benefits still struggle to get by.”
The report also highlighted “several serious issues” relating to the Shared Accommodation Rate (SAR) – which is the rate set for roughly six percent of young claimants living independently. Rising market rents, paired with a freeze on LHA rates, have led to growing rent shortfalls for this group. As a result, we have been told that young people in the private rented sector live in poor-quality accommodation with many having to top up their rent using other forms of income – often other benefits, although in some cases they may receive Discretionary Housing Payments.
The roll-out of Universal Credit may exacerbate these issues, as the shift in England and Wales to monthly housing payments in arrears of rent to the tenant rather than the landlord, requires a higher level of budgeting skills than many young people have.
Care leavers are the group most likely to face housing difficulties and of the 12,000 young people who leave care each year, one in five end up homeless in England. Care leavers are exempt from the Shared Accommodation Rate until age 22, but often struggle with shared living and tighter budgets when this does apply
It was suggested that extending this exemption until age 25 would reduce housing issues for this group – by allowing young care leavers more time to become self-sufficient before facing a tougher rental market. The government are reviewing this as part of their Keep On Caring strategy, which is designed to improve support for people in care when they move to independence.
The report urges the government to exempt care leavers from the Shared Accommodation Rate and the under-occupancy penalty until they reach age 25, rather than 22 as is currently the case. This would allow them to live in one bedroom homes in the private rented sector while in the social sector it would allow them to live in a two-bedroom homes if that is all that is available.