By Louise Greenwood
BBC Radio 4's Money Box
The EMA will not affect any other benefits the family may receive
A new benefit for 16-year-olds who continue with their education instead of leaving school to get a job is currently being rolled out across the country.
The Education Maintenance Allowance (EMA) is targeting the funding at students from households earning under £30,000 a year, with the amount paid dependant on family income.
Students whose families earn up to £19,630 a year before tax will get the full £30 a week; for those with incomes up to £24,030 it is £20; and students with £30,000 income families will receive £10.
The cash is paid directly into the student's own bank account, and they can spend the money as they wish.
Education Minister Ivan Lewis told the BBC's Money Box programme:
"Far too many young people get to the age of 16 and drop out of any form of education or training.
"That is bad for our society but is also bad for our economy.
"The cost approximately [of the scheme]... is £450m a year and we believe it is money well spent."
The EMA has been piloted in some of the poorest areas of Britain over the past three years.
Money Box visited Sir George Monoux College at Walthamstow in East London where the majority of the 1800 students are receiving the full allowance.
Principal Richard Chambers told the programme: "The biggest single ethnic group at the college is Pakistani. Their grandparents are country people, so there is no tradition of staying in further education.
"Without the availability of an Educational Maintenance Allowance it probably means a lot of these young people just will not stay in full time education after the age of 16."
To get the EMA, students must be on an educational or vocational course that involves at least 12 hours teaching a week. The EMA will not affect any other benefits their family may receive. But there are conditions.
To get the payment, they must sign an agreement with their school or college promising to attend regularly and keep up with coursework.
Morray Bayliss, who runs the EMA scheme at Sir George Monoux, said:
"If during any one week there is unexplained absence which means attendance would fall below 95% then payment would be immediately withdrawn."
Money Box spoke to students in the A level English class who are all receiving the full £30.
Saheera said: "I buy my bus pass, my clothes, my food, everything I can get with my EMA."
And another student, Marian added: "It motivates you to come to college every day, knowing that you are going to get your money."
Initially, the Education Maintenance Allowance will only be available to 16-year-olds, but over the next three years it will be rolled out for older students as well.
To get it, students must apply through their school or college who will give them an information pack.
Students must provide evidence of family income through a Tax Credit award notice.
If students want payments backdated to the start of term, they must apply by the end of September.
BBC Radio 4's Money Box was broadcast on Saturday, 11 September, 2004 at 1204 BST.
The programme was repeated on Sunday, 12 September, 2004 at 2102 BST.