My Lords, I shall speak to Amendment 48 tabled in my name and to Amendments 49 and 50 in this grouping. Amendment 48 would provide a national offer for young people leaving care and would help to address the concerns that have just been raised about them entering poverty and social exclusion. It would build on what we were discussing earlier; that is, placing duties on departments in very specific ways to work to promote good outcomes for these young people. The national offer would include a council tax exemption, for which the noble Baroness, Lady Howarth of Breckland, will make the case shortly, as well as an entitlement to income support to reduce the risk of sanctions and help to support care leavers into work. There should be an extension of working tax credit to care leavers under the age of 25 to ensure that work always pays for them, along with an extension of the shared accommodation rate of local housing allowance, again until the age of 25.
I recognise that this is a very difficult time financially, and of course some of these proposals would have financial implications. While I am reluctant to burden
the public purse still further, as the Minister and noble Lords will know, the cost of failing to intervene effectively on these young people is huge, including criminalisation and many becoming pregnant early in life. They will have young families and be struggling as it is, and yet they will have additional financial burdens and so on, although I understand that a couple of the provisions would be unnecessary for the mothers of young children. There are the knock-on costs, and of course there is the absolute misery for young people who are struggling in life and then perhaps having their own children taken away from them. I hope that noble Lords will bear that in mind.
On income support, which is covered in the first amendment, research undertaken by the Children’s Society has found that care leavers are three times more likely to have sanctions applied to them than other adults of working age, with 4,000 sanctions applied to care leavers between 2013 and 2015. Where these sanctions were challenged, although care leavers are less likely to challenge them, some 60% were overturned. This implies that the sanctions are being misapplied. Fewer than 16% of care leavers challenge benefits sanctions as opposed to 23% of the general population. Care leavers are particularly vulnerable to the effects of benefits sanctions, which currently can last for between four and 13 weeks for a low-level infraction such as being late for an appointment at a jobcentre. One young person told the Children’s Society that she was sanctioned in the lead-up to Christmas. She said:
“Don’t know why … it caused a lot of issues … I wasn’t able to sustain myself”.
Allowing care leavers to claim income support would ease their burden. Income support is still a sanctioned benefit, for groups who should be preparing for work. Currently care leavers are not eligible to receive income support by virtue of their status of having been in care. Extending the entitlement to be on income support to care leavers would be a recognition by central government of the need to be more supportive to this particularly vulnerable group during their search for gainful employment. This amendment is very much focused on reducing the impact of sanctions on care leavers, rather than providing them with a higher level of income.
The second part of the amendment applies to working tax credit. Care leavers currently cannot claim working tax credit under the age of 25 unless they have a child or disability. This amendment seeks to extend eligibility to claim working tax credit to all care leavers in full-time work of more than 30 hours a week in recognition of their risk of falling into debt as a result of being liable for household expenses such as rent, energy bills and basics, where many young people would not cover these costs in full if living with family members. It would also recognise the particular need to provide clear incentives to this group to move into, and stay in, work.
I understand that there may be some rationale behind restricting access to working tax credits until a person reaches 25. Younger workers on low wages are likely to be living with their families and not have the full financial liability of running a household. Those over 25 may be less able to fall back on their families
for support. However, care leavers take on the full financial burden of adult life as soon as they begin independent living, yet are not able to claim the national living wage. Regulations by the Children’s Society show that they are £42 a week worse off than an equivalent older non-care leaver. Extending working tax credits to care leavers under 25 would be a significant step forward in ensuring that work paid for care leavers, and would secure the surest financial footing for them at the beginning of their adult lives.
The final part of the amendment is on the shared accommodation rate. That rate sets maximum local housing allowance entitlements for most single people under the age of 35 in line with the reasonable rent in their local area for a room in shared accommodation. Currently care leavers are exempt from this until the age of 22. The amendment seeks to extend this exemption up to the age of 25. Until the age of 22, care leavers receive the single bedroom rate, providing them with sufficient support to rent a single-bedroom flat rather than a room in shared accommodation. This should be extended until the age of 25.
With the current situation, care leavers receive a significant cut in their local housing allowance at the age of 23 as they transition from single-bedroom rates to the shared-accommodation rate. At this point, leavers may find that they fall into rent arrears, leaving their home to live in shared accommodation, which may put them at risk. Those in foster care leaving care under staying put arrangements of the age of 22 may find themselves transitioning immediately into shared accommodation. These are serious problems that the amendments would address, so I hope the Minister will consider a favourable response.
I turn to the next two amendments. I have spoken for far too long so I will not say anything more, but I strongly support them and I look forward to the Minister’s reply.