Home Secretary Shabana Mahmood has announced plans for asylum seekers to pay up to £10,000 towards their accommodation and support once they start earning.
The full sum must be repaid before people can qualify for settled status, a crucial step for permanent residency in the UK. Eligible adults above a set income threshold would make monthly payments, mirroring a student loan repayment system.
Settled status, or Indefinite Leave to Remain, is essential for migrants to permanently live, work, and study in the UK.
The government reported spending £4 billion on accommodation and support for asylum seekers in 2025.
Home Office estimates detail the average cost per person per night as £23.25 in dispersal accommodation and £144 in hotels, with weekly subsistence payments ranging from £9.95 to £49.18 per person.
The cost is “too high”, Ms Mahmood said.
“We have already reduced asylum costs by £1 billion, but it is also right that we ask those who can contribute to do so,” she added.
“Receiving asylum support is a right, but it is also a responsibility. Once people can contribute and repay the generosity of the British people, we expect them to do so.”
Asylum seekers are expected to have to pay a total of around £10,000, but the Home Secretary will be able to adjust the amount, the Home Office said.
Those liable for the cost who leave the UK will be made to pay in full if they want to come back at a future date, the department added.
The powers needed to recover the costs will be set out by the Immigration and Asylum Bill when it is introduce to Parliament on Tuesday.
Dr Madeleine Sumption, director of the Migration Observatory at the University of Oxford, said it was likely that only a relatively small share of people granted asylum would actually earn enough to pay towards the scheme.
It could also discourage asylum seekers from working once they get refugee status to avoid the cost, she said.
“The data suggests that unless thresholds were significantly below the minimum wage, a relatively small share of people granted asylum would earn enough to make contributions to the scheme,” she continued.
“The impact of the scheme on public finances is likely to be relatively small, because it is a means-tested payment for a very low-income population.
“It is possible that the scheme could have some other impacts, such as discouraging asylum seekers from taking up accommodation if they can find other support (such as family members or a charity), or discouraging them from working once they get refugee status because they face a higher effective tax rate.
“In practice, it is hard to predict how large either effect might be.
“How the proposed flat rate £10,000 repayment compares to the actual cost of asylum support will depend a lot on how long people wait for a final asylum decision and what share are in hotels.
“For example, the cost of supporting person who waits for a year in a hotel would be over £50,000, while the cost for someone in much cheaper HMO (house in multiple occupation) accommodation who only waits six months would be under £6,000.”
Zoe Dexter, from the Helen Bamber Foundation human rights charity, said the plan amounted to “more performative cruelty from the Government”.
“Charging refugees around £10,000 once they finally find work is the opposite of integration,” she said.
“These are people who have fled persecution and extreme violence, often arriving with nothing, before spending months or years in overcrowded, dilapidated accommodation, sometimes facing intimidation and violent protests outside the places they are housed.
“Burdening them with debt just as they begin rebuilding their lives is grossly unjust and entirely self-defeating.”
Imran Hussain, of the Refugee Council, said: “Imposing what amounts to an extra tax on refugees, who the Home Office accepts have arrived here after fleeing persecution, torture and war, is unfair, impractical and make it much harder for families to rebuild their lives and stand on their own feet.
“The reason why many need asylum support is because the Home Office itself bans asylum seekers from working while their claims are being assessed.
“Asylum support is only given to people who are at risk of being destitute, so this new financial burden would only harm those who arrive on our shores with nothing.”
Shadow home secretary Chris Philp said: “It is flattering that Labour have adopted yet another policy put forward by the Conservative Party.
“This precise scheme was proposed by us in an amendment to the Immigration Bill last year, which Labour blocked.”
It comes after the Home Office revealed it is planning to use more former military barracks to house thousands of asylum seekers in its quest to shut all asylum hotels by the next election.
The number of people being housed in hotels has fallen to its lowest level since data was first reported in 2022, according to Home Office figures published last month.
Other reforms set to be laid out on Tuesday include creating a “single route” that prevents migrants from appealing against a rejected claim and bringing further claims about new matters before their removal.
