According to a report by Gingerbread and The Children’s Society, 240,000 single parents under the age of 25 will loose about £780 each year under the Universal Credit system.
The report warns that this will push some 100,000 children below the poverty line, when the reforms begin to be phased in from October this year.
The charities are calling on government to reverse the decision to give all under-25s the lower rate of benefits under the new system – regardless of whether they have children or not. Young parents are currently exempt from receiving the lowest welfare payments for under-25s.
Caroline Davey, director of policy, advice and communications at Gingerbread, argued that government is only pushing young parents onto lower benefit rates because it wants to simplify the system.
“The government has set aside £4bn over two years to implement the new Universal Credit system and its own impact assessment says overall benefit payments will be higher, because it contains elements where they’re keen to be more generous,” she said.
“In that context, the fact that this potentially quite vulnerable group will be getting significantly less money is even more shocking.”
“There is very clear evidence that the long-term cost of child poverty is very high. We think it’s the wrong direction to go in and will store up more problems for the future.”
The report also highlights the fact that 25,000 disabled single parents will lose out under Universal Credit because of the abolition of the severe disability premium.
According to the charities, many severely disabled single parents who rely on their children to provide care for them could lose more than £3,000 a year.
“All children need decent support – whatever their parents’ age. So taking away some of this essential support because a parent is 19 or 24 instead of 25 simply doesn't make any sense,” said Lily Caprani, director of communications and policy at The Children’s Society. “The government needs to urgently need to reconsider this policy.”
Universal Credit will replace existing benefits such as jobseeker's allowance, income support and housing benefit. It is expected to be fully operational by 2017.