Ministers consider paying families on benefits HUNDREDS more per month if teenagers take up apprenticeships

Ministers are considering monthly payments worth hundreds of pounds to families receiving benefits whose teenage children take up apprenticeships.

It comes as the Government is concerned the current welfare system effectively traps young people outside the workforce by penalising their parents financially.

Under the scheme being considered, 16 and 17-year-olds who leave education to begin apprenticeships would trigger bursary payments to offset the benefits their families stand to lose.

Alan Milburn, appointed as the government's work tsar, is set to issue a warning this week that perverse incentives embedded in the benefits system are preventing teenagers from entering employment.

The former health secretary will argue fundamental changes to welfare are urgently needed to address the problem.

Speaking on the BBC, Mr Milburn said: "For every £25 that we spend keeping young people on benefits, we spend only £1 helping them get into work through employment support."

Close to one million young people in Britain are currently classified as "Neets", meaning they are neither in education, employment nor training.

Mr Milburn described the situation as "really shameful", and called for a comprehensive overhaul of the welfare system.

"It's one thing to be ignorant. It's another thing to be neglectful, and we as a society and we in politics have been neglectful of what is, frankly, a scandal. It's a scandal that we can't afford," he said.

A "system reset" on welfare was "absolutely essential and needs to be done well", he added.

Government officials have been informed parents can face substantial financial losses when their children begin apprenticeships, as they forfeit child benefit and portions of universal credit.

Research by the Social Security Advisory Committee identified the most severe impact on a lone parent whose disabled teenager was the final person on their benefit claim.

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In this hypothetical, they would be £339 per week worse off if that young person started an apprenticeship.

Sources indicated they believe the number of families affected to this degree is relatively small, with officials suggesting in most cases, the apprentice's wages would compensate for lost benefits.

However, since apprenticeship pay goes directly to the young person rather than their parents, households may still face hardship unless teenagers contribute a significant portion of their earnings to family finances.

The national minimum wage for young people stands at £8 per hour, increasing to £10.85 for those aged 18 to 20, though apprentices remain on the lower rate until reaching 21.

Pat McFadden, Work and Pensions Secretary, is understood to favour a targeted bursary system over alternative proposals, with Whitehall viewing this as a more straightforward method of supporting affected families.

Ministers are also exploring an expansion of the Sector-based Work Academy Programme, which currently offers benefit claimants six-week work placements with guaranteed job interviews, potentially adapting it to guarantee apprenticeship interviews instead.

Enver Solomon, chief executive of the charity Nacro, said: "If more young people are to get skills and move into work, this flaw in the system must be fixed, otherwise many young people will continue to miss out and won't fulfil their potential."