Posted: 28 August 2013

For too many families a move into work is not a move out of poverty

New statistics released today from the Office for National Statistics show a welcome fall in the number of children living in families where no adult works. The number is down by around 150,000 from last year.

For many families moving into work can be the best way to increase family income and give their children a better childhood. Unfortunately, far too often this move does not succeed in lifting children out of poverty.

As you can see in our graph, the latest child poverty statistics show that child poverty in working families is increasing at just as fast, or faster, a rate than increases in the number of children in working families. 

Moving into work doesn't mean moving out of poverty

So either many families are already working are falling into poverty, or families moving into work are ending up in poverty - meaning that many children in non-working families in poverty are becoming children in working families living in poverty.

This is not a new problem. In fact, our analysis of the Households Below Average Incomes Survey earlier this year shows that in the last 15 years, the number of children in poverty in working families has increased by quarter of a million. 

Escaping poverty through work?

Whilst the number of children in working families increased rapidly in the late '90s and early '00s, the number of children in poverty in working families remained about the same or even fell slightly – work was providing a genuine route out of poverty.

But from 2004, although the number of children in working families continued to increase, children living in poverty in working families started to rise rapidly. 

Although the numbers of children in poverty in working families fell in the late '00s- associated with a rise in workless families resulting from the recession- by the start of the new decade, as more families moved into work, numbers began to rise again.

Our graph* shows how children in working families, and children in poverty in working families have changed over time from 1996 levels.

* The 'children in working families' data is based on figures from the Labour Force Survey. The 'children in working families in poverty' data is based on figures from the Family Resources Survey. Because different methodologies are used for these studies, comparisons between the two are broadly indicative only.

How we reduce the number of children in poverty

Increases in the number of children in working families doesn’t have to be accompanied by rises in poverty amongst children in working families. National and local government have practical options available to address in-work poverty:

1. Provide additional help with childcare costs for the lowest income working families.

The government has announced extra help with childcare costs following the introduction of the new Universal Credit benefit system, meaning that working families can get up to 85% of their childcare costs covered through the benefits system. But working families on the lowest incomes (with one or more earners earning less than the income tax threshold) will not be entitled to this additional support. 

The government must not allow a two tier system for childcare to develop. The lowest-income working families must get this help too.

2. Local authorities need to make sure working families can get access to interest free loans in emergencies.

As shown in our Nowhere to Turn report, changes to eligibility criteria for financial assistance in a crisis, risks excluding some of the lowest income working families when they most need support. 

Local authorities must make sure that the lowest income working families are not excluded from support through their local welfare assistance schemes.

3. Introduce free school meals for all children living in poverty, including those in working families.

As our Fair and Square campaign highlights, many children of working parents aren’t entitled to receive free school meals, no matter how little they earn. As a result, 700,000 school-aged children living in poverty miss out on this vital support.

The government should make sure that all children in families in receipt of Universal Credit can get a free school meal. 

Tackling poverty for working families

If last decade was defined by the real progress that was made on the overall number of children living in poverty, this decade needs to be equally distinguished by making sure that similar progress in made on tackling poverty for working families.

By Sam Royston - Policy team

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