Child Poverty and Changes to benefits for lone parents and

families

Ruth Hession and Nel Coles

Context of the changes

• Both Social Security Advisory Committee & Work & Pensions Select Committee advised against going ahead

• DWP research: ‘Work & Well being over time: Lone mothers and their children’ – No support for compulsion

• Gregg report: Conditions, Sanctions & Work for just about everyone - provides basis for current changes and carried through into,

• The Welfare Reform Bill - gives power to take the changes several steps further for a wider groups of claimants

Ending Child Poverty: Making it happen

Consultation paper setting out government plans for ending child poverty by 2020

Deadline 11/3/09

Ending Child Poverty: Making it happen

• Sets out the Government’s 2020 vision

• Considers progress so far, and looks at measures of success

• Looks at scope for tackling Child Poverty in local communities

[CP bill will follow]

The Government’s 2020 vision

Lists 4 ‘Key aspirations’

• More parents in work that pays*

• Financial & Material support responsive to families’ situations*

• Improvements in children’s life chances to stop poverty translating into poor outcomes

• Safe, cohesive communities that support children to thrive

1. More parents in work that pays

• Employment is the biggest factor in family income

• Children in households where no adults work have 63% risk of ‘relative poverty’ 29% risk where 1 adult works and 8% where both do

• ‘In-work poverty’ is a challenge

• In-work poverty and unemployment are linked – families often go from one to the other in cycles

1. More parents in work that pays

What barriers are there?

• Low Skills

• Poor physical and mental health

• Caring responsibilities

• Family breakdown/ family crisis

2. Financial & material support responsive to families situations

• A child’s life chances should not be determined by their parents capacity to earn

• Financial support is needed as well as incentives to work

• Families get the help they need through a responsive tax credit system

• Families unable to work are supported

3. Improving poor children’s life chances, to stop poverty translating into poor outcomes

‘Every child matters’ 5 ‘Outcomes’ identified:

• To be healthy• To be safe• To enjoy and achieve• To make a positive contribution• To achieve economic well-being

4. Tackling deprivation creating safe cohesive communities, that support children to thrive

• Deprived environment affects cognition, communication, health & attainment

• Families will live in safe cohesive communities where children can thrive

• Children will have safe places to play. Opportunities to develop and access to high quality services

In work Poverty

• 1.8 million families classed as in work poverty

• This represents– 50% of all children in poverty– 18% of all children in working families

Joseph Rowntree Foundation Addressing in-work Policy – Peter Kenway research based on data averaging the three most recent years available (up 2005/06) November 2008

In Work Poverty

• Government has partially acknowledged in work poverty

“Work is the surest route out of poverty but not an immediate guarantee: a combination of low wages and/or low hours in low skilled jobs may mean that working families remain in poverty. Parents may face constraints that limit their ability to earn a sufficient income or progress in the workplace”

(HM Treasury, et al 2008- Ending Child Poverty: Everybody’s business)

The costs of Ending Child Poverty

• The government must spend an additional £4.2 billion a year in benefits and tax credits to meet its target of halving child poverty by 2010

• The research has projected that the recession will mean less parents in work and more families in severe poverty, making the cost of reducing child poverty greater

Joseph Rowntree Foundation- Ending child poverty in a changing economy February 2009

Definitions of Poverty

• Child Poverty-households with below 60% of median income before housing costs

• Relative low income (below 70% of median income) and material deprivation

• Persistent Poverty – Govt unable to set a target seeking advice about how

to measure this

• Consulting on “Absolute poverty” measures– Real income levels compared with real costs of living

Eradicating Child Poverty

• Govt target to eradicate Child poverty by 2020

– to reduce children in relative low income to 5-10%– Reducing children in material deprivation combined

with low income to zero– Continued progress on persistent poverty

• End Child Poverty Coalition states that govt target should aim for 5% in relative low income– Matching the best achieved in Europe

Contradictions in Government Vision

• One of the key aspirations, improving poor children’s life chances

– ‘To encourage more parents to get involved with their children’s education and to reduce the pressures on families’

• The above contradicts with the main government vision “work as the way out of poverty” with a focus on lone parents

Changes to childcare

• As a response to criticism of their welfare reform measures in relation to childcare provision….

– Current provision of 12 ½ hours “free childcare” increased to 15 hours a week for 3-4 year olds

– Extension of “free” childcare to two year olds– New pilots in some disadvantaged areas for free

childcare– Lone parents with children aged one plus required to

attend WFI (Welfare Reform Bill)

Changes to Benefits

SS (Lone parents & Misc. Amendments) regs 2008 makes changes to:

• SS Income support (Gen) regs 1987

- Schedule 1B (1) ‘Lone Parents’

• SS (WFI for lone parents) & Misc. regs 2000

• SS (Jobcentre plus Interviews) regs 2002

Changes to Income Support for Lone parents

Phase 1 Youngest child 11-15 on 24/11/08

New & repeat claims from above date - only as a lone parent no longer possible if Y. Child 12+

Existing claims

- Y. Child 16 on or before 1/3/09 - no change

Changes to Income Support for lone parents

Y. Child under 16 on or after 2/3/09 IS stops in stages:

- Y. Child 14 or over on 1/3/09 IS stops after next WFI or 16th b-day whichever comes first

- Y. Child 13 reaching 14 after 1/3/09, IS stops in week after 14th b-day

- Y. Child is 12 (on 24/11/08), IS stops in the week after next WFI after 6/7/09

- Y. Child 11 but 12 before 6/7/09 IS stops after WFI following that date

- Y. Child is 11 reaching 12 after 5/7/09, IS stops in week after 12th B-day

Changes to Income Support for lone parents

• Phase 2 from 26/10/09 affects Lone parents whose youngest child is 9 -11

• Phase 3 from 25/10/10 affects Lone parents whose youngest child is 6-9

- As with Phase 1 existing claimants will have a staggered introduction starting with those whose ‘youngest’ child is at the top of the age bracket and taking several months to complete

- New and repeat claims will not be possible from each relevant date where Y. Child is over 12; over 10 and over 7 respectively

Changes to Income support for lone parents

• Quarterly WFI’s - youngest child 9-11 from 24/11/08• Quarterly WFI’s - youngest child 6-8 from 26/10/09• Quarterly WFI’s- youngest child aged 6 25/10/10

• Full time students/ FT new deal trainees on 24/11/08 can stay on Income Support

• However no exemption for home educators & self employed childminders (who can also no longer work more than 16hrs without being treated as in F/T work)

Changes to JSA for Lone parents

Available & actively seeking work

• 7 days to be ready to attend an interview – 28 days to start job after offer

• May reduce hours availability in certain circumstances (ie child excluded from school)

• In some cases may be able to restrict hrs availability even if no reasonable prospect of employment would then exist

• ‘Just cause’ for leaving a job – additional rules • ‘good cause’ for not taking a job – additional rules

Feedback Points1st Discussion

• Reasonable Prospects and Availability

– How will the PA decide to apply this test to lone parents, appears to be a discretionary power?

– Relies on the claimant identifying this as an issue/ need

– DWP research into lone parents provides evidence of the difficulties in relation to availability and work

– “Work and well-being over time: lone mothers and their children” DWP Research report 536

Feedback Points

Key aspiration 1

• Difficult to see how this can be achieved, particularly for lone parents – Childcare issues– Temporary nature of a lot of work– Complexities/ difficulties with tax credits– Current state of economy

Feedback points

Group 2• Good Cause/ Just Cause

Decisions in relation to child care at the discretion of PA

– Child care expenses “unreasonably high proportion” of income / earnings

– Reasonable availability of child care– Suitability of child care

Feedback Point

Key aspiration 2

• Are govt proposals improving financial support and responsive to need?

– More lone parents will be sanctioned – Tax Credits not truly responsive and very

complex– High costs of child care– Benefit levels still not enough to raise most

out of poverty

Feedback points

• Purnell (work and pensions secretary) asked by the select committee what would happen to a mother who rejected childcare because it was too far away and poor quality

– “the system will be able to be personalised”– “it will be the personal adviser’s decision with the

possibility of appeal, because if we did it the other way round that would clearly have the potential to drive a cart and horses through the conditionality regime”

Reported in The Guardian 23/02/09

Conditionality?

• Purnell

“Conditionality is an ugly, technical term, so we should restate its meaning plainly. It is about encouraging people to take up support for what we know works.”

How can a system of compulsion and sanctions be encouraging people?

Institute of Public Policy Journal Feb 2009