The UK government has unveiled plans to require asylum seekers who find employment after being granted protection to repay up to £10,000 toward the cost of their accommodation and financial support.

The proposal forms part of the Immigration and Asylum Bill, which is due to be introduced to Parliament on Tuesday. Under the plan, individuals would need to repay the debt before becoming eligible for settled status, also known as Indefinite Leave to Remain.

The repayment scheme is expected to operate similarly to the student loan system, with monthly deductions beginning once a person’s income exceeds a threshold that has yet to be announced.

According to the Home Office, the standard repayment amount will initially be set at £10,000, although the Home Secretary will have the authority to adjust the figure. Those who leave the UK before repaying the debt would be required to settle the full amount if they later seek to return.

Home Secretary Shabana Mahmood said the measure is intended to reduce the financial burden of the asylum system while ensuring those who are able to contribute do so.

“We have already reduced asylum costs by £1 billion, but it is also right that we ask those who can contribute to do so,” Mahmood said, adding that asylum support is “a right, but it is also a responsibility.”

The government says the asylum system cost around £4 billion last year. Home Office figures show it costs an average of £23.25 per day to house an asylum seeker in dispersal accommodation and £144 per day in hotel accommodation, while weekly subsistence payments range from £9.95 to £49.18 per person.

The proposal has drawn mixed reactions. Migration experts have questioned how much revenue the scheme would generate, noting that many refugees enter low-paid employment. Madeleine Sumption, director of the Migration Observatory at the University of Oxford, said the financial impact on public finances is likely to be limited because relatively few asylum seekers are expected to earn enough to make significant repayments.

She also warned the policy could discourage some refugees from accepting accommodation or seeking work if repayment obligations are perceived as too burdensome.

Human rights organisations have criticised the proposal, arguing it could hinder integration. Zoe Dexter of the Helen Bamber Foundation described the policy as unfair, saying many refugees arrive in the UK after fleeing conflict and persecution with few or no financial resources.

The announcement comes as the UK government continues efforts to reduce the use of hotels for asylum accommodation, with plans to expand the use of former military sites to house asylum seekers ahead of the next general election. Home Office data shows the number of asylum seekers housed in hotels has fallen to its lowest level since records began in 2022.