Thousands of families claiming Universal Credit could receive up to £4,500 a year under new government plans designed to remove one of the biggest financial barriers preventing teenagers from taking up apprenticeships.
Ministers say the new bursary will stop households being left worse off when a child chooses an apprenticeship instead of staying in full-time education.
The move follows warnings that some families have been effectively penalised by the benefits system, with previous analysis finding some parents could actually lose money if their teenager started earning as an apprentice.
The new payment, worth up to £4,500 per household each year, will be available to eligible families receiving Universal Credit.
It comes after the Social Security Advisory Committee warned of an “apprenticeship cliff-edge”, where families can lose benefit entitlement once a young person starts an apprenticeship.
The committee found that in one example, a single parent with a disabled child could lose up to £339.92 a week in benefits. If the apprentice earned £258 a week, the household would still be around £80 a week worse off overall.
The government says the bursary is intended to prevent families from having to choose between protecting their income and allowing their children to begin vocational training.
Work and Pensions Secretary Pat McFadden said: “The welfare system should be a springboard to opportunity, not a barrier to it.”
He added: “By providing bursaries to those who need them most and fully funding apprenticeship training, we are making sure cost is not the reason someone misses out.”
Alongside the bursary, small and medium-sized businesses will be able to receive up to £8,000 to help cover the costs of taking on young apprentices. The scheme will be funded through the Growth and Skills Levy, paid by larger employers.
Education Secretary Lucy Powell said: “Too many young people face unnecessary barriers to apprenticeships, college places and training.”
She added: “We’re investing to change that.”
The minister said the government was “determined to help thousands more young people gain the skills, experience and confidence they need to build successful careers.”
The announcement has been welcomed by children’s charity Action for Children, which says it regularly sees young people reject apprenticeship opportunities because their families cannot afford to lose benefits.
Lucy Schonegevel, from the charity, said: “Our youth employability teams see young people turn down opportunities because they can’t risk a reduction in their family’s income.”
She added: “We hope this change will mean fewer young people have to choose between their future and their family’s ability to put food on the table.”
The announcement comes as Prime Minister Andy Burnham unveiled wider plans to increase apprenticeship and technical education opportunities for young people, including new technical pathways for pupils from Year 10.
However, the Conservatives questioned how the plans would be funded, with Shadow Work and Pensions Secretary Helen Whately describing the proposal as “uncosted” and claiming ministers were “spending money already committed elsewhere.”
