The benefits system risks discouraging apprenticeships
Different things in life evolve at different rates. That much is inevitable, but it’s still a source of trouble. Just think of all those newspaper stories about people splashing out on flash new EV cars only to get caught short in some corner of the country where there aren’t enough chargepoints.
It’s just over a decade now since a major evolution of the education and training regime in England, with the raising of the required participation age to 18. The central 16+ choice is between full-time study, a full-time apprenticeship or a blend of study and work. But while the education system changed, the benefit system did not. A new report from the Social Security Advisory Committee exposes the unintended consequences that flow from this mismatch, some of which could distort the career paths of young people—particularly those from poorer homes.
The means-tested benefits system obviously has to take account of both a family’s needs and its earnings. The more complex question with 16 and 17-year olds and their parents, however, is exactly who counts as a “family”. In the past, it was common for people to work like adults from 16: they could even get married. These days, most public policy draws a sharp line between adults and children at 18. But the social security system still puts 16 and 17 year-olds in a grey area. If they are in full-time education they remain children for benefit purposes; once they have left it, they effectively count as independent.
When a 16-year old plumps for staying on at school or full-time college, all the family’s benefits continue as before. But if they leave to become an apprentice, they drop out of consideration on their parents’ benefit claim, and are implicitly assumed to rely on the apprenticeship wage they earn. Last financial year that would typically have been 35 hours at a £7.55 rate, or about £260 each week.
In parallel, their parent(s) receive less benefits than before. Their lost entitlements might include: Child Benefit, the child element of Universal Credit, plus in some circumstances the premium for a disabled child and/or the so-called “work allowance”—i.e. a chunk of their own earnings that some people are allowed to keep without it affecting their benefit calculation. Looking in detail at seven families in different circumstances, the report found that the hit total hit to entitlement varies hugely, ranging from £17.25 to an extraordinary £339.92 every week.
In general, the losses are larger where families have additional challenges, especially child disability. But even where no disability is involved, a working lone parent with one child in a private rental can lose out on entitlements (including child maintenance) to the tune of £225.49 a week when their 16 year-old starts an apprenticeship. In other words, she or he would need to get their hands on over 85 percent of the youngsters’ wage in order to retain their income. In a similar case where the child is entitled to a disability premium, the losses shoot above £300, and far exceed the total apprenticeship wage. So the household as a whole is then unambiguously worse off.
Such outcomes seem incompatible with the official stance of the government, which is that full-time education and apprenticeships are two equally valid pathways. There is a danger that parents who understand the consequences for their benefits could discourage their children from doing apprenticeships, and that families who don’t understand the consequences could be in for a shock. The risk is not just theoretical: the Committee heard directly from families, young people and professionals advising them who confirmed that the benefit system was sometimes warping the participation choice.
The root problem here concerns the unintentional misalignment that has grown up between two big systems, and as such it is not amenable to any quick single fix, however ingenious. But at a time when the high number of young people not in education, training or employment is a pressing concern, there is every reason to take this problem seriously. The report details the way in which other countries have avoided similar problems, and comes up with 13 practical recommendations for addressing them.
Some are small changes which the committee believes could be implemented very rapidly—such as closing a brief gap in payments that can affect families in the early weeks of a young person’s apprenticeship between the family’s benefits being recalculated (typically in late August) and the youngsters’ first wage being received (typically in later September). This is a crunch time for budgeting as they might be required to buy work clothes and other materials. Other recommendations would be likely to require more scoping work and resources, and so rank as medium-term ambitions. For example, aligning the treatment of earnings between apprentices and full-time students, who—unlike apprentices—can currently earn in part-time jobs without benefit calculations being affected. In the longer term, a more thoroughgoing review of all benefit rules and their interactions with education and training for 16-18 year olds will be needed to steer us towards a more comprehensive resolution.
This is complex terrain. But unless we want to see young people’s futures being determined, not by their ambitions and aptitudes, but instead by snares in the benefit system, it is terrain that cannot be ignored.
https://ssac.blog.gov.uk/2026/04/23/the-benefits-system-risks-discouraging-apprenticeships/
seen at 10:15, 23 April in Social Security Advisory Committee.