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Child poverty today

Child poverty today. Josephine Tucker. 17 January 2019. Child Poverty Action Group. Who are we? Founded 1965 Won Child Benefit Experts in social security law Instigated UK welfare rights movement Strategic litigation – test cases Won Child Poverty Act with partners

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Child poverty today

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  1. Child poverty today Josephine Tucker 17 January 2019

  2. Child Poverty Action Group • Who are we? • Founded 1965 • Won Child Benefit • Experts in social security law • Instigated UK welfare rights movement • Strategic litigation – test cases • Won Child Poverty Act with partners • Host of End Child Poverty Campaign • Offices in London and Glasgow

  3. Child poverty: An approaching crisis

  4. Child poverty* since 1960s *Measured as living in a household with <60% median income

  5. Child poverty is policy-responsive • 1.1 m children lifted out of poverty by 2010 – half way to 10% • Largest reductions in child poverty in the OECD between mid-1990s and 2008 • As a result  • Wellbeing improved on most indicators • Deprivation levels and money worries fell • Extra money led to increased spending on fruit and vegetables, children’s clothes and books; spending on alcohol and cigarettes fell.

  6. UK was on course to hit child poverty target in early 2020s

  7. But we won’t end child poverty by 2020 • Rising cost of a child – housing and childcare • Low and stagnating wages • Austerity - benefit and tax credit cuts of £37bn a year • Pensioners protected – yet children more likely to be poor • Child poverty now at 30% (4.1 million) • 37% (5.2 million) by 2021-22 • Child poverty targets and strategies scrapped

  8. Impact of cuts to benefits and tax credits, 2010-2020

  9. The big cuts families are facing • 4 year benefits freeze • Loss of first child premium in tax credits / universal credit • Two-child limit on tax credits /UC • Local housing allowances cut • Bedroom tax • Benefit cap limits help for non-working families • Loss of local welfare assistance schemes

  10. Who is most at risk of poverty? Children in single parent families 49% Children in families with 3+ kids 42% Children in families where someone is disabled 36% Children in families with an under-5 35%

  11. Poverty to soar among larger families Source: Hood and Waters (2017), Living Standards, Poverty and Inequality in the UK, Institute for Fiscal Studies.

  12. Poverty, not worklessness 67% of children in poverty have at least one parent in work 33% of children in poverty have no parent in work

  13. Many working families cannot achieve a no-frills standard of living Shortfalls from minimum income standard Hirsch, D. The cost of a child in 2018. http://cpag.org.uk/content/cost-child-2018

  14. Non-working families face huge shortfalls A single parent with one young child, who is not working, will have an income just 47% of what they need, after housing costs. By 2021 a non-working couple with three children in an inexpensive private rented home will be £396 a week short of the minimum income standard - receiving just 36% of what they need (compared with 60% and a £224/week shortfall in 2016). • Benefit cap case study • Single mother with two older children, gave birth to twins. • Had been working 16-20 hours per week, but was on a zero-hours contract and received no maternity pay. • One of the babies has health problems which have required several hospital stays. • She does not feel she can go to work while her children are so young, especially given these health problems. • She cannot downsize as she already shares her bedroom with the twins. • Has considered moving to a cheaper area but her children would lose regular contact with their father and she would lose help from family members. • This family would have received £230 per week in housing benefit towards rent for a small three-bedroom home. The benefit cap has reduced this to £30 per week – a loss of £200 a week or over £10,400 a year. • The family were initially granted Discretionary Housing Payments by the local authority but have been told that these are going to run out.

  15. Poverty is getting deeper Average shortfall of families with children below the poverty (after housing costs) Bradshaw & Keung, forthcoming

  16. Food insecurity (Food and You Survey, data from 2016) • 17 % of people aged 16-24 had worried about running out of food and not being able to buy more. • 10% of people in work had run out of food and not been able to buy more.

  17. Destitution & foodbank use • Joseph Rowntree Foundation estimates that 1.5 million people and 365,000 children went without bare essentials in 2017. (‘Destitution in the UK’, JRF 2018)Why? • Benefit delays, gaps and sanctions • Harsh debt recovery (mainly public authorities & utilities) • Financial pressures of poor health & disability • High cost of housing, fuel and essentials • Lower levels of benefits for some groups, esp young people • Ineligibility for benefits for some migrants • CPAG, Oxfam, Church of England and Trussell Trust researched causes of foodbank use: • Sudden income crises (in more than 50% of cases this was a benefits delay, sanction or reduction) against a backdrop of other difficulties (e.g. ill-health, bereavement, relationship breakdown, caring responsibilities, job loss) and ongoing low income. • Inadequate emergency support from benefits system & local authorities – loss of the national Social Fund • (‘Emergency Use Only’ report, 2014, and update)

  18. Impacts of poverty on children

  19. Money matters Children’s outcomes Financial resources • A multi-year systematic review by LSE researchers found that income has causal effects on children’s outcomes including: • health • cognitive development • school achievement • social, behavioural and emotional development. • Considered only studies from OECD countries that used credible methods to establish causal links. • Cooper & Stewart, 2013 & 2017 update, ‘Does money affect children’s outcomes? A systematic review’. Centre for Analysis of Social Exclusion Causal?

  20. Included studies: RCT example Cancian, Yang and Slack (2013) ‘Wisconsin-Works’ welfare reform: random assignment determined level of ‘pass through’ in child support to mothers in receipt of state benefits. Experimental group could keep benefits plus all child support paid; control group kept benefits and 41% of child support. Children in families keeping more child support were significantly less likely to be at risk of maltreatment. Slide from presentation by Dr Kitty Stewart to NCASC Conference, 2018, used with permission

  21. Included studies: Natural experiment example Akee, Copeland et al (2010) Opening of a casino on Eastern Cherokee reservation, rural Carolina Longitudinal study already in progress when Casino distributes profits to all adult tribal members – increase in income of around $4,000 per adult/year. Researchers tracked outcomes for children in households with and without eligible adults. Increased income increased years in education, reduced teenage crime and parental arrests, increased parental supervision and positive interactions with mother. Slide from presentation by Dr Kitty Stewart to NCASC Conference, 2018, used with permission

  22. Mechanisms • Two main mechanisms identified: • ‘Investment’ - parents’ ability to pay for things that help children e.g. healthy diet, quality housing, extracurricular activities (sports, music etc), computers, books, bicycles, trips to museums, tuition etc. • ‘Family stress’ – living on a low income causes stress for parents and raises the risk of depression and conflict. These in turn affect parenting and negatively affect children. • Family stress model also supported by other studies e.g. • - Wickham et al. 2017 showed that moving into poverty had large impacts on mothers’ mental health, which in turn raised the risk of socio-emotional and behavioural difficulties among children.

  23. Children’s voices ‘I didn't have breakfast - nothing in my house, my mum’s skint’ ‘Feel like punching the teacher… when I’m hungry’ ‘Dot gives you your lunch and says just pay it the next day if you don't have your money… sometimes I feel bad for asking though so I just don't even bother’ ‘I didnae want to pay 50 pence on Home Eccies… that takes money off my lunch money’ ‘My mum felt guilty that I couldn’t go… Last trip I missed it was just me in my class and that was rubbish, the majority of people were away on the trip’ Voices of pupils in Scotland from CPAG’s work into the Cost of a School Day • ‘I was just trying to make her laugh and she was quite stressed because she had like no money at that moment and she said, she said stuff like “Go up to your room now” and “Would you stop it please” and “I don’t like the way you joke with me most of the time” and stuff. But I was only trying to make her feel better instead of being stressed.’ Nine year old in Hooper et al, 2007, p.58

  24. Doctors’ experiences ‘Parents dilute down milk as they can’t afford formula milk’ ‘Children are not accessing services and support due to finances – such as parents can’t take them on the bus to appointments, etc.’ ‘back-to-back respiratory illnesses, living in overcrowded shared accommodation.’ ‘I think that the biggest impact of poverty on the children and parents I encounter is insecurity, inferiority and stress. Through biological and psychological factors these undoubtedly lead to poor health.’ ‘Constant concern about finances and housing conditions affects families with children with long-term health conditions; they face difficulty in dealing with treatment as they are preoccupied with other issues’. Paediatricians quoted in Poverty and child health: Views from the frontline, CPAG and RCPCH 2017

  25. Teachers’ experiences ‘I work in Early Years and the children ask every morning in they can have food, their mood and concentration picks up as soon as they eat.’ ‘A lot of the times children will have internet access through the phone of a relative, however, some activities and work are not accessible through these platforms... This then gives children less of an opportunity to develop.’ ‘None of our children in poverty access music lessons as there is no way it can be funded by parents or school - I know many who would love to.’‘Parents are in crisis and not managing their children's emotional or physical needs as they are so stressed about money. The support we need to provide for these families cannot be underestimated.’ Teachers quoted in Child Poverty and Education: A survey of the experiences of NEU members. CPAG and National Education Union, April 2018

  26. What about Universal Credit?

  27. About Universal Credit Replaces six existing benefits (income-related JSA, ESA, income support, tax credits, housing benefit). Supposed to simplify the system, reduce poverty (originally) and make work pay. Many winners and many losers financially -- but after cuts most people will now be worse off under Universal Credit. All areas are now ‘full service’ as of December 2018  (virtually) all new claims will be directed to UC. ‘Managed migration’ of existing benefit claimants to start in 2020. About 1.2 m claimants so far - 7m by 2024 - halfthe country’s children.

  28. Key features of Universal Credit • ‘Digital by default’ – people have to claim online and communicate with work coaches online. • Paid monthly (rather than weekly or fortnightly). • One payment covers money for children, housing costs, childcare subsidies, and in- or out-of-work support – ‘simple’ in theory but risky if things go wrong. • Payment to one member of the household – a risk for people in abusive relationships • Increased conditionality - parents of 3 year-olds, people awaiting disability assessment, can now be expected to look for work unless work coach tailors their requirements. • 5 week wait for first payment. Advances available but repayable. • Amounts adjust each month based on monthly assessment of people’s circumstances and income. • Administered by DWP – but same old jobcentre!

  29. Assessment periods and delay Claim 10.10.18 Assessment calculated 9.11.18 Entitlement begins on the 10.10.18 First payment 15.11.18 Payment processing period Assessment period (31 days) 1 month and 5 days before first payment

  30. Problems arising with universal credit • 5 week wait for 1st payment • Deductions for advances & other debts • Poor tailoring of ‘claimant commitments’  risk of sanctioning of vulnerable people • Self-employed lose out due to ‘minimum income floor’ – poorest 10% • People on non-monthly pay see income fluctuations – hard to budget • Upfront childcare cost payments • Errors in calculations – wrong housing costs, disability elements not included • Difficulties with challenging decisions • Difficulties managing online • Errors in right to reside decisions • Foodbank use up 52% in the year after UC roll out (Trussell Trust)

  31. In summary • More families unable to afford the basics including rent – even in inexpensive areas • Non-working families and larger families at risk of increasingly severe hardship • But even smaller families in low-paid or insecure work not immune • Transition to universal credit creates a number of new risks • BUTthere is a lot that local authorities and frontline workers can do!

  32. Income maximisation is vital! • Take up rates of means-tested benefits are between 56% (JSA) and 86% (child tax credit). • Many people at foodbanks are there because of a delay or other benefits problem e.g. sanction. • Benefits checks and welfare rights advice have huge returns: • Since 2010 CPAG advisers have restored £4.2m to clients of 1 foodbank through welfare rights advice. • Benefits advice delivered in 6 schools in Edinburgh won £350,000 for families in 1 year. • Benefits check should be a first step in early intervention with families. Source: Evaluation of CPAG advice project in First Love foodbank, Tower Hamlets

  33. Local welfare assistance best practices • Emergency support • Grants not loans wherever possible • Cash rather than in-kind or vouchers • Well-advertised • Simple & dignified application process • Sufficiently resourced • Council tax reduction • No minimum payments for the poorest (won’t increase collection anyway) • End bailiff use and aggressive debt recovery for council tax debt • Negotiate with families to keep them out of court • No ‘two-child limit’ • (See ‘Still too poor to pay’, CPAG and Zacchaeus 2000 Trust, 2017) • Discretionary housing payments • Offer as much security to families as possible on duration of payments • No worksearch requirements • LWAS are in crisis – a survey of 150 councils by Church Action of Poverty in 2018 found: • Nearly a quarter of schemes had closed altogether • A quarter had reduced spending by 85% or more

  34. Poverty and schools Breakfast, after-school & holiday clubs • Improve attainment, help working parents, include healthy food • Available to all children & non-stigmatised • Free, at least for low-income families Examine & reduce the cost of the school day • Uniform • Sports kit • Trips • Equipment • Food • Clubs • Fun activities

  35. Become a Living Wage employer Or visit https://www.livingwage.org.uk/

  36. The EARLY WARNING SYSTEM needsYOU! • www.cpag.org.uk/early-warning-system • ews@cpag.org.uk • 020 7812 5226 • The EWS gathers information about the impacts of welfare reform from frontline workers • Identifies issues and trends • Uses information to campaign, suggest good practice to mitigate impacts of welfare reform and inform the media • Please give us your case studies!

  37. Thank you!

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