Select Committee on Social Security Appendices to the Minutes of Evidence


ANNEX

Lone parents, benefits and paid work

1. Entry into the Benefits System

On separation or divorce, mothers and children usually see a substantial fall in their income of about £20 a week on average; compared to fathers who are likely to see an increase of about £10 a week.9 This, despite the fact that many will have been living on a relatively low income with their former partner. Like women in couples, lone parents find that caring for young children affects their ability to take paid employment and some prefer to be full-time mothers or work part-time. The difference is, that without a partner's income (and their help with childcare) many lone parents have to rely on state benefits to top-up their income. With the exception of widows benefits (currently under review) help for one parent families has always been through meanstested benefits paid at subsistence levels. Thus the key reason for making a benefit claim is separation (from marriage or cohabitation), divorce, widowhood or the birth of a child.

2. Lone Parents and Poverty

Poverty, debt and hardship are therefore everyday experiences for most lone parents despite trying their utmost to protect their children from its worst effects. Three in five lone parents (or 63 per cent) live in poverty (defined as having incomes below half the average income after housing costs) and as such are the group at greatest risk of poverty in the UK.10 This proportion of lone parents living in poverty has increased from 19 per cent in 1979. The number of individuals in one parent families living in poverty rose from 437,000 in 1978 to 2.8 million in 1996. Individuals living in one parent families represent 20 per cent of all those living in poverty by this measure, despite the fact that they represent only 8 per cent of the population as a whole.

Typically, lone parents, incomes are less than half those of two-parent families, with average net incomes a little over £100 a week.11 Fifty-nine per cent of lone parent families are living on gross weekly incomes of less than £150 per week compared to just 7 per cent of married couples and 18 per cent of cohabiting couples.12 Less than two-thirds of lone parents rely on Income Support (IS) as their main source of income and about one quarter (more than half of the remainder) claim Family Credit (FC).13 Just over half of all FC claimants are lone parents. Of lone parents on IS, 39 per cent leave benefit within two years and of the remainder, only 34 per cent are on IS for longer than five years.14 IS and FC are both means-tested benefits which are withdrawn as income increases and carry with them the risk of unemployment and poverty traps. There is no help with mortgage costs for lone parents working more than 16 hours a week.

3. Causes of Lone Parent Poverty

Lone parents are disproportionately affected by poverty for a number of reasons. Chief among these are the cost of having children and the loss of earning power that results. The fact that, at present, most lone parents are women is key to understanding the prevalence of poverty in one parent families. They are likely to earn significantly less than men, to be in low paid work and are more likely to be employed in the non- standard or "flexible" economy.

A series of recent studies have shown that one parent families have greater needs and experience greater hardship than two parent families with children. The need for food, heating, lighting and housing costs do not halve with the departure of one adult and the absence of a second carer for the children means that childcare, transport, food and other goods cost more as getting to cheaper supermarkets and bargain hunting is more difficult; children cannot be left at home alone and unpaid childcare is usually out of the question. In other words, children cost nearly half as much again if there is no second adult.15

Income Support provides only 70 per cent of what is actually being spent on children in poor families and children in one-parent families are much more likely to be poor and to go without than children in two—parent families irrespective of whether or not their parent is working.16 Lone mothers themselves are 14 times more likely than other mothers to go without food themselves in order to meet the needs of their children.

4. Effects of Lone Parent Poverty

Research has shown that on current benefit levels lone parents who have lived in poverty for some time cannot afford to eat healthily.17 Many experience severe hardship, poor housing, lack of access to financial services and debt.18 Recent evidence suggests that in addition to the unemployment and poverty traps, lone parents are strongly affected by a "hardship trap" where those experiencing the most severe hardship on benefit are more likely to be out of work for longer. One study showed that those in severe hardship in 1991 were less likely to have jobs even four years later in 1995.19 The importance of adequate benefit levels cannot be under estimated and although the situation was worsened by benefit cuts, the recent increases in benefit rates for children are an extremely welcome recent development.

5. Lone Parents and Paid Work

Taking paid work is one way of finding a route out of poverty and towards a better standard of living for lone parents and their children. However, the move into employment means trying to earn enough to compensate for the lack of a potential second wage-earner, to cover the costs of children, childcare and other work-related expenses from one wage. It means compensating for the associated reduction or loss of certain benefits (such as free school meals, Housing Benefit or mortgage interest payments in IS) as well as coping with an increase in work-related expenses (such as travel, clothes, meals and childcare). It also means trying to carry the sole responsibility for parenting along with holding down a paid job.

6. Deciding to take Paid Work

It is important to look at the decision-making process that lone parents go through before deciding to work, whether full or part-time. Caring for children alone is a demanding job, the more so if you are also trying to hold down a paid job. As sole carers and responsible parents—lone parents have to balance the needs of their children with the demands of paid work. In this respect they are no different from any other mothers and in putting the welfare of their children first many judge it necessary to be full-time parents, at least for a while. For example, many need to spend considerable time with their children following the trauma of separation and three in ten non-working lone parents state that their own ill-health or disability makes it difficult for them to take paid work. A quarter of lone parents say that a child has a long-term illness or disability of some kind. For these and many other reasons, part-time working is often the preferred first option when considering joining the labour market.

In Britain rates of employment for lone parents are far below most other European countries 40 per cent are in work here compared with over 70 per cent or 82 per cent in Sweden or France respectively.20 However, lone parents in the UK have very high childcare costs compared to other countries because of the low level of public subsidies. International research into lone parent employment in 20 countries identified the high costs of childcare as the primary reason, along with housing costs, for our low rates of lone parent employment.21 However, although 90 per cent of lone parents say they would like to work at some point, this does not mean that they are "work-ready" straight away. It is estimated that about 3 in 10 already working nearly full-time, three in ten are ready to work, three in ten will work one day and 1 in 10 will never be able to work. The key point is that there are enormous problems faced by lone parents who wish to take paid work when caring for children alone. It should be noted that nearly 40 per cent of lone mothers has a child under the age of five years, a figure which rises to just over 50 per cent of lone parents on Income Support.22

The barriers to paid work include:

  • The attitudes of employers;
  • The organisation of work;
  • Scarcity of jobs;
  • Lack of transport;
  • Lack of skills;
  • Existing financial hardship and the constraints it imposes;
  • Lack of access to childcare, both formal and informal;
  • Lack of confidence and work experience;
  • Low pay and insecure jobs;
  • Concern about meeting housing costs;
  • The complexity of the benefit system, particularly in respect of moving from out of work to in-work benefits alongside changes in maintenance payments.

7. Education and Training

Although most lone parents want to work, many have been out of the labour market for some time and they lack confidence and self esteem, as well as marketable employment skills and recent work experience. Nationally, some 40 per cent of lone parents have no educational qualifications at all.23 Rowntree research on lone parents and work confirms that lone mothers with higher educational qualifications not only find it easier to get and keep a job, but are also more able to move on from part-time to full-time work.24 The recent study found that those lone parents with post-school and university qualifications earned between 30 and 50 per cent more a week than those who were unqualified. The study showed that lone mothers and academic qualifications saw their earnings once in work rise more quickly than others. This research underlines the need to facilitate access to education and training for lone parents. It is worrying in this light that going into higher education can be very tough struggle for lone parents financially, an issue which is addressed below.

The promotion of staff development and training on the part of employers is also vital, and should be an essential component in strategies to promote lifelong learning. For lone parents who will very often enter employment at the bottom end of the labour market it is important that there are prospects for progression and development.

One in five lone parents who participated in our own Employment Project were found to be in employment six months later at follow-up. This is a considerable achievement. But even more increasing is the very high numbers who went into education and training following the project—proportions varying from 50 to over 70 per cent in some areas. This indicates the very high importance lone parents themselves attach to increasing their skills and qualifications—so many of those we work with recognise that if they are to become effective breadwinners for their families and move off benefits then education and training must be the route.

8. Student Finance

Lone parents wishing to enter education or training at present face a number of barriers. A study of student finances by the Policy Studies Institute provided evidence of acute financial strain for lone parent students who often had to borrow large sums to complete their course. No other group of students stood out so consistently in terms of financial strain. Full-time students find that their benefit income drops dramatically because the student loan (even if not taken out) and any maintenance awards are treated as income against which their benefits are means-tested. Most students end their courses with a significant overdraft which they pay off when in work, in addition to the official student loan.

Another key problem for lone parent students is childcare. There is a marked lack of childcare provision for student parents in most universities and colleges, with many having long waiting lists for nurseries. Lone parents cannot afford to pay for childcare out of their grant/loan income as it would simply not leave them with enough to feed their families.

National Council for One Parent Families.

April 1999


 
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Prepared 27 July 1999