Shabana Mahmood said she is considering “a big increase” in payments for migrants to return voluntarily to their home countries.
Under current rules, the UK offers payments of up to £3,000 for some people with no right to remain in the country to return home.
The Home Secretary has directed officials to “pilot a small programme” of increased payments, “just to see how it changes behaviour”.
The Birmingham Ladywood MP has insisted the policy represents “value for money” but admitted it “sticks in the craw” for Britain’s hard-pressed taxpayers.
In plans to overhaul the asylum system set out on Monday, Ms Mahmood said the offer of financial packages to assist with voluntary returns would continue.
But she has now said the figures involved could increase.
She told the BBC’s Political Thinking podcast: “I haven’t alighted on the full sums involved yet, but I am willing to consider a big increase on what we currently pay.
“I know it sticks in the craw of many people and they don’t like it, but it is value for money, it does work, and a voluntary return is often the very best way to get people to return to their home country as quickly as possible.”
Labour backbenchers have strongly criticised Ms Mahmood’s wide-ranging reforms, which are aimed at deterring migrants from seeking asylum in the UK and making it easier to remove people with no right to be in the country.
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Covid-19 inquiry to publish findings on political decision-making during pandemic
The UK Covid-19 Inquiry will publish its findings today into decisions made by former prime minister Boris Johnson and his senior advisers.
Key players, including Mr Johnson and former health secretary Matt Hancock, gave evidence to the inquiry into what they were thinking in 2020, including before the first lockdown was announced in March.
During a series of hearings, they were questioned over Government measures introduced during the pandemic, such as Covid testing, social distancing and the Eat Out to Help Out scheme designed to support businesses.
Chairwoman Baroness Heather Hallett, a former Court of Appeal judge, heard wide-ranging criticisms of Mr Johnson and his team, with WhatsApp messages and emails detailing disagreements disclosed to the inquiry.
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