My Lords, I will speak to Amendment 98A in this group in my name. This is about the universal credit standard allowance for single claimants under the age of 25, for care leavers and lone parents. It ties in with much of what my noble friend has just said.
I thank the Family Rights Group for its advice on this amendment, which is rather complex, but clear. Under the current system of income support and income-based jobseeker’s allowance, the rate of personal allowance payable to a claimant depends on the claimant’s age and whether the claimant has children. Those under 25 years old who are not parents receive a lower rate of personal allowance than those aged over 25. A lone parent aged 18 or over will receive the same higher rate of personal allowance that those aged over 25 are entitled to. Lone parents receive a sum of £73.10 per week, which equates to £316.77 a month.
Under universal credit, the Government have introduced different rates of standard allowance for single claimants regardless of whether they are a parent, depending on whether the claimant is aged under or
over 25. Therefore, in universal credit, the standard allowance for a single parent under 25 years of age is £251.77 per month, almost £65 less per month or nearly £780 less over the course of a year than lone parents of that age receive under the current regime.
Many young parents under the age of 25 who are care leavers are entirely reliant on welfare benefits and tax credits to support themselves and their children. The reduced rate of universal credit is likely to push this group of parents, who are already vulnerable, into severe financial hardship and debt. That may result in their having to move home, away from the formal support networks and services that are an integral part of their own pathway plans as well as the plans in place to support them in caring safely for their children. If their ability to meet their children’s needs is compromised, that risks children being denied the chance of being raised by their parents, thus impacting on the child and the parent’s right to respect for family life. It could also increase the number of children in care, which would not be in the best interests of children and would lead to a considerable greater cost to the Government.
The payment of a lower personal allowance undermines those provisions that aim to support care leavers, including those provided for in the Bill. It undermines the Government’s commitment under the leaving care strategy to ensure,
“that care leavers are adequately supported financially in their transition from care to adulthood to enable young people leaving care to have the same opportunities to fulfil their potential as their peers”.
These are important considerations and I hope that the Government will look on them favourably and give some explanation as to the discrepancies.