A combination of changes to out-of-work and housing benefits, the move to Universal Credit and cuts to benefits in recent years have reduced the amount that young people are entitled to compared to older working-age adults.
As a result, under-25s are on average £100 a year worse off, with single parents hit far harder.
That's the conclusion of a new report from the Resolution Foundation, which was commissioned by the Health Foundation.
The Resolution Foundation's Fahmida Rahman said Universal Credit has created a "young parent's penalty".
"This harsh treatment comes at a time when child poverty is already projected to rise," she said.
The report found two in three (67%) single-parent families aged 16-24 year see their incomes fall when they move to Universal Credit, compared to 56% of older single-parent recipients.
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.
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
