Young parents are £100 a year worse off after a decade of cuts and reforms to the benefits system, according to a report.
The switch to Universal Credit and changes to housing benefits have sparked a decline in income for under-25s which has hit single parents the hardest, it claims.
A report by think tank the Resolution Foundation found two in three (67%) single-parent families aged 16-24 year see their incomes fall when they move to the new benefit system, compared to 56% of older single-parent recipients.
The Resolution Foundation's Fahmida Rahman said Universal Credit has created a "young parents penalty", the Daily Mirror reports .
"This harsh treatment comes at a time when child poverty is already projected to rise," she said.
Payments for young single parents are typically cut £15.20 a week on the new welfare system.
On top of that, young parents with young children are less likely to benefit from support towards childcare.
That's because it's aimed at working families, and young parents are less likely to be working, and because younger parents are more likely to get help from their own parents and grandparents when looking after children.
Under Universal Credit, single people between 18 to 24 are entitled to up to £251.77 a month as a standard allowance - £66.05 less than those aged over 25 - whether or not they have children or not.
While this is unchanged from the previous benefit system, the key difference is that single parents aged between 18 and 24 would have been able to claim the 25 and older rate if they had a child under five under the old system.
A DWP spokesperson said: “As this report acknowledges, Universal Credit is a simpler system that incentivises work and represents a positive step for many young adults.
“Parents on Universal Credit can claim back up to 85% of their childcare costs and since April working parents have been able to earn an extra £1,000 a year before their payments start to reduce.
“There are near-record numbers of single parents in work, but we spend more than £95bn a year on benefits for families who need more support.”
To tackle the problem of younger parent losing out, the report recommends:
- Halting or reversing benefit cuts that are underway and bear down on incomes at all ages, for example by reversing some of the effects of the benefits freeze
- Rethinking some of the lower awards that young people face in the benefits system, for example by removing the penalty that young single parents face in the switch to Universal Credit
- Ensuring young people have the financial resilience to cope with the increased risks and insecurities they face, for example by revisiting asset-based welfare schemes akin to the Child Trust Fund
- Taking steps to reduce the number of minimum wage rates or narrow the gap between youth rates and the 25 and over rate, something that both main parties have committed to, to different extents
- Ensuring that young people get the support they need and that benefit and childcare take-up are maximised, via good advice and guidance systems sitting around the benefit system
