Home Office plans to strip asylum-seekers of benefits

Twenty thousand asylum-seekers are to be stripped of their subsistence benefits under controversial plans being drawn up by the Government.

The Home Office is preparing to stop the weekly payments of £36.54 unless refugees agree to live in government-approved accommodation – a move that has been criticised by refugee support groups, who say it will cause poverty.

Lord Rooker, the Immigration Minister, has told leading non-governmental organisations, including the Refugee Council and the Joint Council for the Welfare of Immigrants (JCWI), that the 19,900 people who elect to live with friends or relatives and forgo the offer of free accommodation will not be allowed to claim the allowance.

The changes are part of a government shake-up of the asylum rules to end the hated voucher payment system. Instead, David Blunkett, the Home Secretary, plans to bring in a cash-based support system.

Many asylum-seekers reject free housing because it requires them to leave London. Refugee support groups said yesterday that the changes would create chronic poverty in marginal communities. Habib Rahman, chief executive of JCWI, said some would be "made destitute" by the change.

Nick Hardwick, chief executive of the Refugee Council, said: "There are lots of people who have somewhere to live with family or friends, but need vouchers to survive. We have been told by ministers that they are going to do away with support for these people altogether. If you want the cash, you have to agree to be dispersed."

Mr Hardwick said the move contradicted pledges by the Government to tackle social exclusion and integrate marginal communities. He said: "Many asylum-seekers who are able to provide their own accommodation will switch to having no support and will place even more pressure on impoverished inner-city communities."

The voucher support system – which will be phased out early this year – was introduced two years ago by Jack Straw, the former Home Secretary. It was brought in along with the Home Office's National Asylum Support Service (NASS) to oversee the dispersal of asylum-seekers to accommodation outside London.

The Government is now setting up a network of centres to house refugees, although thousands will still be placed in council-run and privately-owned rented accommodation approved and paid for by NASS.