Universal credit (UC) is now the main working-age benefit in the UK. Since its inception, UC has been plagued with administrative issues and budget cuts and, as a result, its early promise to reduce poverty has yet to be realised. When the pandemic hit, swift changes were needed to make UC fit for purpose including an increase in the amount of financial support provided and a relaxation of some of its most punitive rules. However, the vast majority of these positive changes have already been reversed, or are due to be reversed in the coming months.
Our submission highlights that children who already faced a higher risk of poverty have been disproportionately impacted by the pandemic and will be particularly vulnerable during economic recession. Rising child poverty places high costs on society as a whole. It should therefore be of the utmost priority that families with children are able to easily access adequate financial support.
Financial support to low income families to pay for childcare through working tax credits is being replaced by the childcare element of universal credit. This Early Warning System report examines the impact of this change on parents and childcare providers.