Giving U.K. asylum seekers right to work would lower welfare spending

Reflecting on the balance of recent media coverage of asylum seekers in the U.K. one might assume they are well off. That would be wrong. While the politics of immigration is dominated by discussion of "pull factors," asylum seekers receive poverty levels of welfare support and do not have the right to work.

Using Home Office data (part of which is publicly available and part of which we had to submit a freedom of information request to obtain), it's possible to calculate the cost of asylum support, the cost of increasing asylum support, and what the annual cost implications might be if asylum seekers were allowed to take paid employment.

Asylum support payments are delivered through a separate system to the payments provided to unemployed citizens, and are set purposefully low – at just $46.73 per week. The U.K. Home Office decided upon that figure for those awaiting a decision on their asylum application by looking at Office for National Statistics survey data on the average household spending for the poorest 10 percent of U.K. households.

The expenditure of the households was $170.48 per week in 2015, but the Home Office noted that these households spent only $47 per week per person on essential items (like food, nonalcoholic drinks and clothing), which was then used to set the level of asylum support. Asylum seekers are therefore living on an income that is less than a third of the income of the poorest 10 percent of British households.

The majority of asylum seekers fall into the category of receiving around 50 percent of Job Seeker's Allowance claimants.

Asylum support at these levels actually costs the state very little. We calculated that the British Home Office spent $219.5 million in 2014-15 on asylum support, whereas the U.K. spends about $184.6 billion on means-tested benefits, to help the poorest members of society.

The cost associated with reducing poverty among asylum seekers by increasing asylum support would also be low. Currently, asylum support is capped at approximately 50 percent of the income support rate. So with no changes to the rules on working, if all asylum seekers in receipt of support were entitled to 70 percent of the income support rate (assuming none are working), the asylum support bill for 2014-15 would be $18.34 million higher. If asylum seekers were entitled to the full level of income support, the cost would increase by $45.8 million.

When set within the context of a $186 billion welfare bill these figures appear relatively low, $46.1 million would add 0.02 percent to the total welfare bill. Bringing asylum support up to approximately 70 percent of Job Seeker's Allowance would add 0.01 percent on to the total welfare bill. That's how little it would cost to lift asylum seekers out of poverty, but if they also had the right to work, it wouldn't cost anything. In fact, the government could save money.

In our calculations, direct public savings of up to $295.3 million could potentially be made annually if asylum seekers could work. This is the cost of asylum support and includes administrative and staff costs. The figure is $219.6 million when staffing and administration costs are taken out.

But this assumes that nobody is on asylum support, all are working, which is unrealistic. Research from countries where asylum seekers are given access to the labor market suggests that some demographic groups (particularly those with poor language skills and low levels of education) would likely have low labor market participation. Others, with high levels of education and good English language skills are much more likely to find employment. We already know that this is the case for refugees in the U.K. who have full labor market access but whose participation is uneven across nationalities.

So if we assume labor market participation of just 25 percent, then the asylum bill drops from $223 million to $164.4 million. If we calculate the net costs to the public purse of doubling asylum support so that it is almost in line with the level of Job Seeker's Allowance for all categories of asylum seekers currently in receipt of support (refused and awaiting) as well as factoring in a 25 percent employment rate, this would lead to a saving of around $88.5 million for the U.K. government.

Poverty and even destitution are very common among asylum seekers and refused asylum seekers in the U.K. The impacts of such deprivations upon asylum seekers include mental health problems, high levels of hunger, high levels of maternal and infant mortality, and difficulty navigating the legal process.

Politicians argue that welfare benefits and the possibility of working act as pull factors encouraging economic migrants to claim asylum, thus they state it is necessary to limit financial support for asylum seekers. We explored the evidence for benefits and labor market access acting as ''pull factors'' and found that not one study has found a long-term correlation between labor market access and numbers of asylum seekers.

When political concerns about being tough on immigration and immigrants are set aside, the economic argument leans in favor of both lifting the labor market restrictions for asylum seekers waiting for a decision on their claim, and increasing the levels of asylum support to at least 70 percent of Job Seeker's Allowance. But for now at least, the evidence seems unlikely to trump the politics.

Lucy Mayblin is an assistant professor at Warwick University and Economic and Social Research Council Future Research Leaders Fellow. This article originally appeared on Refugees Deeply, and you can find the original here. For important news about the global migration crisis, you can sign up to the Refugees Deeply email list.