{"id":559,"date":"2026-07-24T14:34:40","date_gmt":"2026-07-24T13:34:40","guid":{"rendered":"https:\/\/housing-rights.info\/news\/?p=559"},"modified":"2026-07-27T15:09:55","modified_gmt":"2026-07-27T14:09:55","slug":"asking-uk-asylum-seekers-to-work-would-net-3-5-times-more-than-new-10000-charge","status":"publish","type":"post","link":"https:\/\/housing-rights.info\/news\/asking-uk-asylum-seekers-to-work-would-net-3-5-times-more-than-new-10000-charge\/","title":{"rendered":"Asking UK\u00a0asylum seekers to work would net\u00a03.5\u00a0times more than new \u00a310,000\u00a0charge\u00a0"},"content":{"rendered":"\n

Helen Dempster, Lee Crawfurd and Ian Mitchell from the US Center for Global Development<\/a> challenge the proposal to charge asylum seekers for their accommodation. They model how much the charge would raise and compare that with the effects of asking asylum seekers to work after six months. <\/em><\/p>\n\n\n\n

On 30 June the UK home secretary, Shabana Mahmood, introduced a new Immigration and Asylum Bill. As part of the Bill, she outlined \u201cnew powers for the Home Office to recover costs from adults who have received asylum support such as subsistence or accommodation, provided they have access to sufficient funds\u201d. The charge amount is not in the Bill itself and is set by the Home Secretary through regulations. Her accompanying press release<\/a> noted a \u201ctotal sum of around \u00a310,000\u201d. <\/p>\n\n\n\n

New asylum seekers will need to pay off an amount each month above a set income threshold. This is similar to the way in which student loan repayments work in the UK. At this stage it looks as if payments will be made directly to the Home Office, but the Bill also enables HM Revenue and Customs<\/a> to collect the money through the tax and benefit systems. Failure to repay the full amount could make asylum seekers ineligible for settlement and prevent them from returning to the UK after leaving. <\/p>\n\n\n\n

The cost of asylum support<\/strong> <\/h2>\n\n\n\n

In 2023\/24, the cost of supporting an asylum seeker for a year was around \u00a341,000<\/a>. That\u2019s over four times the \u00a310,000 charge, and a massive increase from the cost just a few years prior (\u00a317,000 in 2019\/20). The total cost to the government is around \u00a34.7\u2013\u00a35.4 billion a year, according to figures from the National Audit Office (NAO)<\/a> and Migration Observatory<\/a>. The majority of that (\u00a33.1 billion) went on hotels. Most of these costs were reported as aid (official development assistance, ODA); the UK reported the highest in-country refugee costs across the OECD<\/a>. <\/p>\n\n\n\n

Since taking office, the current government claims they have cut hosting cos<\/a>t<\/a>s by nearly \u00a31 billion<\/a>, closing 31 asylum hotels. They have done this by increasing removals of people with no right to remain, while moving others out of hotels into larger, more basic, accommodation, including army barracks. This has meant savings to the aid budget of \u00a3432 million in 2025<\/a>, leaving the remaining \u2018foreign\u2019 aid budget spent on refugees in the UK at \u00a32.4 billion, the lowest level since 2021<\/a> (although higher than any year before that). <\/p>\n\n\n\n

Links with asylum seekers\u2019 right to work<\/strong> <\/h2>\n\n\n\n

Critics have expressed scepticism<\/a> that the \u00a310,000 charge will raise any money, largely due to the low rate of earnings among asylum seekers. One major factor holding back refugee earnings is that, for their first year of waiting, asylum seekers do not have the legal right to work<\/a>. Home Office data<\/a> shows just 24 per cent of refugees work in the first year after having been granted legal status, rising to 45 per cent by year two and 48 per cent by year eight. And earnings are low, with only 13 per cent earning at least \u00a320,000 according to the Migration Observatory<\/a>, with the rest either not working or on lower earnings. <\/p>\n\n\n\n

In addition to forcing the government to pay for their accommodation, employment bans also have a scarring effect on the asylum seekers\u2019 future likelihood of being in work. The longer you\u2019re out of a job, the harder it is to get one. The waiting period is longer in the UK than all other assessed high-income countries (Figure 1). After waiting for a year, asylum seekers can apply for permission to work, but they are restricted to roles on the Shortage Occupation List and precluded from self-employment. <\/p>\n\n\n\n

\"Figure
Figure 1. The UK has a very long waiting period before asylum seekers are allowed to work <\/figcaption><\/figure>\n\n\n\n

Reducing this waiting period \u2014 as championed by the #LiftTheBan coalition<\/a> \u2014 would save taxpayers money (it could actually add billions to the public purse<\/a>), support integration and allow asylum seekers to improve their own situation<\/a>. <\/p>\n\n\n\n

The gains from the \u00a310,000 charge\u2026<\/strong> <\/h2>\n\n\n\n

We wanted to know how much money the \u00a310,000 charge may net the UK Government, and how that would compare with asking asylum seekers to work after six months. <\/p>\n\n\n\n

The government hasn\u2019t yet published full details of the scheme but does say payment is conditional on whether \u201cthey have access to sufficient funds\u201d. Based on this, we assume a repayment scheme similar to student loans: nine per cent of earnings above a threshold of \u00a325,000<\/a>. <\/p>\n\n\n\n

The reality of the situation is that, under the current restrictions, most refugees don\u2019t earn enough to pay the charge. Home Office data follows individuals for up to eight years after they get status. Even at year eight, only around 13 per cent of all refugees earn above the \u00a325,000 threshold. Overall, two-thirds would be unlikely to ever pay any of the charge, and only the top 22 per cent pay it off completely over a 40-year period. <\/p>\n\n\n\n

Around 100,000 people<\/a> claim asylum in the UK every year. Roughly 85,000 of those are adults. Around 60 per cent are granted asylum after appeals, so about 51,000 would ever be in a position to potentially repay. Spread over a full working life, the charge recovers only about a sixth of its face value, roughly \u00a382 million per annual cohort (in real terms). <\/p>\n\n\n\n

\u2026vs. asking asylum seekers to work<\/strong> <\/h2>\n\n\n\n

What would happen if instead the Home Office asked asylum seekers to start working after six months, while their claim is pending? We would expect three effects. <\/p>\n\n\n\n

First, we would expect accommodation costs to fall. We’re generous in assuming the government succeeds in getting accommodation costs down by half (to \u00a320,000 per year) and conservative in assuming only a fifth of people newly able to work find their own accommodation (saving \u00a310,000 each). That adds up to \u00a3170 million across the cohort. <\/p>\n\n\n\n

Second, on the tax side, those same people would add another \u00a322 million immediately. Together that’s about \u00a311,300 per person, and it accrues whether or not the asylum claim ultimately succeeds. <\/p>\n\n\n\n

Third, getting people into work sooner also has dynamic benefits. Work bans have effects long after the initial period, due to well-documented \u2018scarring\u2019 effects. Hainmueller et al. (2016)<\/a> find that for each year that Swiss asylum seekers are prevented from working, future employment rates fall by four-to-five percentage points. Fasani et al. (2020)<\/a> compare across Europe, finding that exposure to an employment ban cuts future employment by refugees by 15 per cent, with effects lasting up to a decade. These studies imply that reducing the UK work ban from 12 to six months, for example, could lift later employment by around three percentage points, contributing a further \u00a3102 million per cohort in today’s money (\u00a3122 million over the decade). <\/p>\n\n\n\n

In total, therefore, the right to work is worth roughly \u00a3294 million per cohort, about three and a half times the \u00a382 million charge (Figure 2). If the right to work was granted earlier than six months, the savings would be even greater. <\/p>\n\n\n\n

\"Figure
Figure 2. The \u00a310,000 charge recovers a fraction of what the right to work is worth (calculations for the chart are shown here<\/a>) <\/figcaption><\/figure>\n\n\n\n

Risks are overstated<\/strong> <\/h2>\n\n\n\n

Both the current Labour Government and the Conservative opposition make the unevidenced claim that letting asylum seekers work sooner would act as a \u2018pull factor\u2019, increasing the number of refugees arriving. But repeated studies find there is no relationship between asylum applications and the length of bans on working<\/a>. Asylum seekers make their decision based on a range of factors, such as colonial ties and common language, rather than work rights. <\/p>\n\n\n\n

Another potential objection is that a failed asylum seeker with a job is harder to deport. But again there is no evidence for this claim, and the truth might in fact be the opposite. The law explicitly states<\/a> that little weight should be given in removal decisions to a private life built during “precarious status\u201d. A legal job brings someone into the tax system, with employer and address details on record. An employment ban pushes people into informal work that is invisible to the Home Office. <\/p>\n\n\n\n

A double inefficiency is wasting public money<\/strong> <\/h2>\n\n\n\n

The current approach to supporting asylum seekers suffers from two fundamental flaws. First, it puts applicants into hotels that cost \u00a3144 per night,<\/a> over five times more than accommodation that the applicants might choose<\/a>. Second, it prevents them from working while their application is processed. <\/p>\n\n\n\n

Asking asylum seekers to work, pay tax, and find their own accommodation would save hundreds of millions for the UK taxpayer<\/a>. It would also disperse the highly visible and politically damaging clusters of applicants that find themselves with nothing to do but stand around outside town-centre hotels. This is surely a better way forward than a tokenistic attempt to reclaim some of the costs 20 years down the line. <\/p>\n\n\n\n