Marginal allowance

Benefits expert Neil Bateman pans the current labyrinthine
support system for 16 and 17 year olds, and points to how welfare
payments can be used to promote social inclusion.

If you wanted to design a system of financial support which
ensured that people would need an expert to navigate it, only a
minority would get help, penalised those who did something with
their lives, and trapped them in poverty, you would end up with
something like our system of financial support for 16 and 17 year
olds. Of course, if you are lucky enough to have parents who can
support you this is not a problem but if you are one of the 10 per
cent or so who don’t, then your life is made harder.

With over 11 different strands of financial help, each with
their own special rules for young people, the system is perhaps the
most complicated in the whole of our complicated social security
system – is there really anyone who can explain the rules about
jobseekers’ allowance during the child benefit extension period?
And that’s before you delve into education maintenance allowances,
single room rents for housing benefit, and the public law
principles which determine how you may challenge a refusal of a
jobseekers’ allowance severe hardship allowance.

But above all, this Spaghetti Junction of benefits and
allowances fails young people aged 16 and 17, being a hangover from
the changes introduced in 1989 when benefits for most unemployed
young people were restricted on the assumption that they would all
get a training place. But the training places have simply not taken
up the slack. Another interesting effect of the 1989 changes was
that the headline figure of unemployed 16 and 17 year olds fell
because they lost a financial incentive to register with the then
careers services. 

The first failure of the system is that very few of those who
are eligible, manage to make a successful claim – for example,
figures from the Centre for Economic and Social
Inclusion¹ indicate that just 10 per cent of unemployed
16 and 17 year olds receive any form of state financial support.
Eligibility for jobseekers’ allowance (JSA) and severe hardship
payments is discretionary, time-limited and restrictive. The
criteria are designed to deter applicants, so low take-up is no
surprise. There are no figures for take-up by 16 and 17 year olds
eligible for benefits on other grounds – for example, those in
full-time education and living away from parents or those who are
disabled, but the experience of welfare rights workers strongly
suggests that there is a problem.

The next failure is that the system causes hardship. Not just
because many of those without financial support are left destitute
when they are turned down for JSA, but if they do manage to get a
JSA payment or income support, £6.10 a day is simply
unrealistic for anyone living on their own. This is particularly so
if they have to make up shortfalls in housing benefit caused by the
young person’s single room rent rule. And while the position of
those with children has been much improved in recent years by large
increases in means-tested benefits for them, single people still
fare badly. The consequences of this hardship in terms of crime
have been well established over the years by various pieces of
research and have huge implications (and costs) right across the
public sector and for the whole of society.

The third failure is that the system penalises those who try to
improve their situation. For example, the intrusive verification
processes for those having to live away from parents, the earnings
disregard of £5 for single unemployed people (unchanged for 14
years), and the income support cut-off point at age 19 for those
without parental support who need to finish their A-levels. The
national training allowance rate of £40 is a serious
disincentive for those who take that route while the short-term and
punitive atmosphere of the JSA rules gives little scope for
professionals to support those who need additional support to even
start thinking realistically about work or training.

Finally, the intrusive nature of the application process for JSA
severe hardship and income support for those living away from
parents causes hurt and distress. Not only does this add to young
people’s sense of exclusion because it gives a clear message that
they are not to be believed, but it flies in the face of good child
protection practice by asking social security officials to contact
parents, ask details about abuse if it is alleged and even to
inform young people that their claim may be jeopardised if they
don’t agree to a referral to social services.² For those
living with parents on low incomes, the parsimonious and erratic
nature of the system undoubtedly adds to financial and other
pressures on families and is a contributory factor in family
breakdown involving teenagers.

Alongside these problems is the fact that since 1992 the number
of 16 and 17 year olds who are not in education, employment or
training (known as the Neet Group), has persistently and stubbornly
remained at 9 per cent to 10 per cent of the total age group.
Recent figures show that this group comprises about 173,000 16 and
17 year olds. This is despite record falls in adult unemployment,
the greatly increased levels of staying on rates in education and
various initiatives aimed at this group. Indeed, commentators have
suggested that the Neet group may be up to 50 per cent higher than
official figures.³ Current financial support
arrangements marginalise and exclude the Neet group and give them
few incentives to move on.

This is of particular concern as the Neet group contains a
disproportionate number of offenders, lone parents, care leavers,
young people with mental health difficulties and those facing
multiple barriers to their achievement.⁴ Inevitably,
most of this group will go on to a lifetime of worklessness
punctuated by spells of low skill, and low-paid work. This social
policy failure is not cheap. The lifetime costs of the Neet group
have recently been estimated by the government as costing the
taxpayer £97,000 for each Neet young person (or £15.1bn
at 2001 prices for the whole group).⁵

The announcement in the comprehensive spending review of the
roll-out of a national education maintenance allowance scheme from
September 2004 is very welcome and will provide a real incentive
for marginalised young people to remain in education beyond 16,
particularly as the allowance is not counted as income so parents
or young people may continue to receive income-related benefits on
top. However, it appears that the scheme is unlikely to apply to
training so young people without parental support will still have
to rely on the benefits system to top-up the new allowance as well
as navigate the maze of support. Of course it will be important for
local authorities, schools and Connexions services to raise
awareness of the new allowance among people aged 14 and 15 as many
decisions about future educational paths are made before a young
person turns 16.

Problems with the system of financial support for young people
were publicly commented on by the Social Exclusion Unit as long ago
as 1999 in their report Bridging the Gap. Let’s hope it’s
not too long before action is taken. If we fail to do so, we will
not only fail young people experiencing poverty; we will fail the
next generation of adults and their children living in poverty,
with public services continuing to pick up the pieces.

¹ P Convery, Reforming
financial support for 16-18s, Working Brief 137, August
2002

² Jobcentre Plus,
Internal guidance on Jobseekers Allowance for Sixteen and
Seventeen Year Olds

³ L Britton et al,
Missing Connexions: The Career dynamics and welfare needs of
minority ethnic young people at the margins, Policy Press,
2001

⁴ B Coles et al,
Literature Review of the Costs of Being “Not in Education,
Employment or Training” at Age 16-18. Department for Education
and Skills research report RR 347, 2002.

⁵ C Godfrey et al,
Estimating the Cost of Being “Not in Education, Employment or
Training” at Age 16-18. DfES Research Report RR 346,
2002.

Neil Bateman is performance manager, Connexions Suffolk.
He writes here in a personal capacity.