Mend the safety net

When life events such as illness, unemployment or disability limit our ability to provide for ourselves, we expect the social security system to act as a safety net and protect us from poverty. The fact that 3.8 million children live in families which are below the poverty line tells us, however, that the safety net is not functioning as envisaged in the UK.

  • Adequacy of benefits. Although the government measures child poverty with reference to the poverty line, it sets the value of safety net benefits below this level. Some children will always have parents who are unable to work. Without changes to the level of out-of-work benefits, such families will always be destined to live in poverty.
  • Uprating. Although child payments have increased in recent years, adult benefits have not been uprated in line with earnings and as a result, their real value has declined over time. This erosion of benefits looks set to continue: in 2011 the government announced it will uprate benefits using the CPI rather than the more generous RPI in the future. The recent study by the IFS identified this change in uprating as the measure that will most significantly contribute to the increase in numbers of children living in poverty by 2020.
  • Take up. Lack of knowledge, complexity and stigma all impede families taking up their full benefit entitlement. Recent figures show, for example, that one in five eligible families do not receive child tax credit or housing benefit, while more than two out of every five eligible persons do not claim working tax credits.
  • Eligibility. Despite the fact that the child poverty agenda is about all children, some groups can access only low levels of support. Certain categories of migrants, for example, are specifically excluded from mainstream welfare benefits and as a result, they and their children suffer grave impoverishment. Hard-to-prove eligibility criteria also exclude many people with disabilities from vital support.

The government’s on-going programme of welfare reform is depicted as the most comprehensive overhaul of the benefits system for more than a generation. While the proposed new system will be considerably simpler and should address the issue of take up at least to some extent, questions of adequacy and eligibility remain unaddressed.

At CPAG, we believe these issues must be addressed if the safety net is to provide families with secure incomes on which they can raise their children free of poverty.