The proposals are based on misconceptions and myths regarding the actual living circumstances of younger people, the Institute has warned.
The announcement was made by George Osborne at the Conservative Party Conference this week and seeks to encourage under 25-year-olds to live at home with their parents rather than claiming housing benefit.
David Bookbinder, Head of Policy and Public Affairs at CIH Scotland, said: "Firstly, over half of the UK's 383,650 housing benefit claimants under 25 have children, so the notion that people can just stay at home with their parents is hardly realistic in those cases.
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"Secondly, of all under 25s without children, only 10% live in independent, non-shared housing and more than half do still live with parents. For many who've not been able to stay at home, family breakdown, abuse or other circumstances mean they've been forced to leave home rather than simply left because they like the idea.
"Thirdly, there's a clear and deliberate implication that benefit claimants are happy not to be in work. Young people have been particularly hard hit by the economic downturn, leading to a 61% rise in youth employment in Scotland in the last four years. Despite this, a significant minority of benefit claimants under 25 are still in work. Many young people will also have paid tax and national insurance prior to needing to claim benefit - it appears contrary to the government's fairness principle that they should not have access to the same support as others."
CIH Scotland says that UK-wide, if all under 25s lost their housing benefit, the government would save just £1.88bn of its £10bn target.
(IT)
