MORE than 150 organisations urged Chancellor Rachel Reeves today to fix a “cruel quirk” of the benefits system discouraging tens of thousands of young people in supported housing from working.

In an open letter, the Youth Chapter Collective estimated the housing benefit of more than 31,000 young people tapers faster than their pay would increase if they started working more hours.

This means they end up worse off when they start earning more than £132.78 per week — roughly equivalent to 13 hours of work at the minimum wage for a 21 to 22-year-old, it said.

It called for young people to be allowed to earn more money before their benefits are reduced and for a reduction in the taper rate so those in supported housing have the same rate as those in the private renting sector.   

Centrepoint director Balbir Kaur Chatrik said fixing “this injustice” in the Budget could save the government millions in the first year alone.

A DWP spokesperson said: “We’re determined to get more people – including young people – across the country into good, secure jobs.

“That’s why we are stepping up our plan to Get Britain Working with the most ambitious employment reforms in a generation, as well as modernising jobcentres and providing tailored support through programmes like Connect to Work.

“We recognise the crucial need to support the next generation, so we’re going even further by launching an independent investigation that will bolster our drive to ensure all young people are earning or learning through our Youth Guarantee and expansion of youth hubs.”