900,000 single-parent families to lose out under new benefits system
Our new report, Single parents and universal credit: Singled out?, highlights the impact of the government’s new universal credit benefits system on single-parent families. Co-authored with Gingerbread, the report raises concerns that hundreds of thousands of single-parent families will lose vital support.
When universal credit is fully introduced and no transitional protections remain in the system, some 900,000 single-parent families will be worse off than they are now. In comparison, only 700,000 such families stand to gain under the system.
It’s not too late to help these families. Universal credit is up for debate – the house of commons is debating it this week – and there are a handful of changes that parliament can make to ensure that children in single parent families do not face this big cut.
240,000 young single parents will lose, 100,000 people pushed into poverty
Under the current benefit system, how much personal allowance (such as income support or jobseeker’s allowance) you get depends on your age and if you have a child. So a single parent - regardless of their age - is entitled to the higher personal allowance rate of £71 per week, rather than the lower rate of £56.25.
Universal credit would change that. Single parents under 25 will no longer be entitled to the higher rate of personal allowance. Instead, they will receive the same rate of allowance as an under-25-year-old without any children. This means that out-of-work single parents between the ages of 18 and 24 will receive £15 per week (or £780 per year) less than they would under the current system.
Around 240,000 single-parent families under 25 will be affected by this change. The government has acknowledged that this will result in 100,000 more people being pushed into poverty.
Losing disability premiums
Severe disability premium currently provides additional support to disabled adults with no one to care for them. The DWP estimates that 25,000 single parents are currently in receipt of this premium, which means that around 42,000 children are in families that receive this key benefit.
This support helps to cover the additional costs of living with a disability, such as paying for expenses for friends and relatives providing assistance, minor pieces of maintenance work, and the costs of personal care. For families with a young carer it goes some way to reducing the pressure on these children to care for their parent.
However, universal credit abolishes the severe disability premium. This will cost affected families up to £58.20 per week and £3035 per year, possibly equivalent to 20% of their household income after housing costs. The additional loss of the enhanced disability premium – which provides extra help for the most severely disabled adults – means that families with a young carer looking after a disabled parent could lose up to £73 per week and £3800 per year.
Loss of these benefits will place substantial pressure on families, and in particular on children, to take on extra care responsibilities, because the parent can no longer afford to pay for the additional costs of care.
Flimsy transitional protection
As a result of the introduction of the universal credit the government has promised cash protection to ensure that there are 'no cash losers' at the point of transition. However, this transitional protection has three key problems.
First, only current benefit claimants will be protected. New claimants will receive no protection and could lose out substantially.
Second, the level of protection will not be uprated with inflation, meaning that the protection would be eroded within just a few years.
Finally, households whose circumstances change - such as losing your job or separating from a partner may lose their protection.
Universal credit presents a unique opportunity to reform the welfare system for the better, creating a simpler system where work always pays. However, the system faces big issues in ensuring that single-parent families get the support they need.
As members of parliament debate the introduction of the new system this week, they need to make sure that universal credit is changed to ensure it really works for all children and families.