Asylum seekers to be billed £10,000 to cover own support once they start earning money

Asylum seekers will have to pay back £10,000 to the Home Office to cover their own housing and financial support when they start working under new schemes that mirror the student loan structure.

New powers introduced to parliament by Shabana Mahmood on Monday will allow the Home Office to cover the costs of adults being housed or receiving financial support while they await their asylum claim.

The Home Office has said the money will only be received from those with “sufficient” funds, but further details about which asylum seekers will be required to pay and how this will happen have not yet been finalized.

Eligible adults will need to pay an amount each month, totaling around £10,000.

Charities and campaigners have criticized the plans as “enforceable cruelty” that “fail to tackle the chronic delays in the asylum system that are the real reason people spend years in asylum accommodation”.

Imran Hussain, director of external relations at the Refugee Council, said the plan “means an extra tax on refugees”.

Zoe Dexter, director of housing at the Helen Bamber Foundation, warned this would undermine the integration of refugees into communities, saying: “It is grossly unfair and completely self-defeating to burden them with debt as they begin to rebuild their lives.”

Kolbassia Haoussou, of the charity Freedom from Torture, said: “As someone with experience of the UK asylum system, I am deeply shocked by this proposal. I struggle to see what is fair in asking some of the most vulnerable people in our society, including victims of torture and sexual violence, to pay back the cost of the support they have been forced to rely on.”

Asylum seekers in the UK are generally not allowed to work while they await a decision on their application. If they wait more than a year, they can apply for a work permit.

As a result, they are dependent on the Home Office for housing and support as they cannot work to cover housing costs.

The average annual cost of providing asylum seeker accommodation and support was around £41,000 in 2023-24, according to analysis by think tank IPPR.

IPPR deputy director Marley Morris said there were “better ways” to reduce asylum costs, such as “speeding up asylum processing and appeals, reforming existing asylum agreements”.

The average cost per person per night of accommodation in the Home Office is £23.25 for dispersed accommodation such as multi-occupancy hostels and £144 for hotels. Expense payments range from £9.95 to £49.18 per week.

Asylum support cost the Home Office nearly £4bn last year. As part of sweeping changes to asylum and immigration rules in March, the home secretary changed the length of time a refugee can stay in the UK, saying the reforms offer a “compassionate but controlled asylum system”.

Asylum seekers’ cases will now be reviewed every 30 months, after which they can be sent back to their country of origin. Previously, refugees whose asylum claims were successful were given a five-year visa and after those five years they could apply to stay in the UK indefinitely.

Government figures from 2015 to 2023 show that a quarter of young people aged 16 to 64 who were granted asylum in the UK were employed in the year they received their status. This increased by half two years later.

Eight years after receiving the refugee grant, 37 per cent of those employed were working full-time with average earnings of £23,000.

Charity organization Asylum Aid has warned that new changes to make refugee status temporary in the UK will hinder asylum seekers’ ability to find work.

Charlotte Khan, of Care4Calais, said: “What the Labor government needs to do is lift the ban on people seeking refuge from work. This is a real solution that benefits the refuge seeker and the UK economy, not this latest bird-brained idea that lacks detail and credibility.”

Ms Mahmood said: “The cost of shelter for British taxpayers is prohibitive.

“We have already reduced asylum costs by £1 billion, but it is right that we ask those who can contribute to do so.

“Receiving asylum support is a right but also a responsibility. When people can contribute and repay the generosity of the British people, we expect them to do the same.”

Other European countries do not require asylum seekers to pay back support costs, but the Home Office is looking to the Canadian asylum system for inspiration.

Refugees resettled in Canada are responsible for paying for travel documents, some medical services, and transportation costs to Canada. They can access the immigration loan program but must start repayments one year after arrival.

Over the weekend, Ms Mahmood announced the introduction of new safe routes for refugees to enable communities and certain “trusted” universities to sponsor refugees seeking asylum in the UK.

The initiative was inspired by a Canadian program that has successfully placed 400,000 people since 1979. A separate pathway allowing employers to sponsor refugees is also expected to be launched next year.