Memorandum submitted the by Child Poverty
Action Group (SF40)
SUMMARY
1. The existing social fund fails to meet
need because payments are made from a cash limited budget, the
bulk of payments are loans and the payments are discretionary.
This creates a conflict between standards of consistency in decision
making and a desire to make the system flexible.
2. The social fund should be assessed in
the context of the need for an adequate minimum income standard.
Grants are a necessary supplement to weekly allowances because
weekly benefit levels cannot in practice cover lumpy expenses.
Research supports the case for increased weekly allowances and
grants.
3. Specific circumstances can make the need
for lump sum payments even greater, for example where there is
long term dependency and in the case of larger families.
4. This is an appropriate time for government
to reassess the social fund and introduce a new system. The introduction
of the integrated child credit may overcome the traditional objection
that lump sum payments are a deterrent to claimants to return
to work. Reorganisation of the services delivering financial support
to claimants and the introduction of personal advisers with potentially
wide ranging duties may facilitate the payments.
5. The payment of grants is a necessary
part of an overall solution to deal with financial and social
exclusion. Reforming credit is not on its own sufficient to deal
with existing hardship and need.
6. CPAG's proposals include a package of
grants either paid on a regular basis or event related. They should
be paid as of right provided certain conditions are met—ie
regulation based. There may be a need for additional grants to
meet clearly defined needs and discretion should be retained to
allow the payment of higher awards for those families in greatest
need.
7. Most of the grants proposed should be
viewed as an interim measure of support only until the government
has achieved its objective of abolishing child poverty.
1. What is wrong with the budget related
social fund?
1.1 Emphasis on loans, not grants.
The budget limited Social Fund allocates most
of its resources in the form of loans rather than grants. In the
year 1999-2000 almost two million loans (both budgeting and crisis)
were made, but only 219,000 grants were awarded. Claimants must
repay loans within 78 weeks. Money is deducted from income support/income
based JSA at 15 per cent, 10 per cent or 5 per cent of the person's
weekly "applicable amount" (the amount that the person/family
is expected to live on each week). At no stage since the social
fund was established has it ever been said that the income support
rate includes an element for the repayment of loans—(see
paragraph 2.3 Effective cut in benefit levels 1988).
1.2 Emphasis on discretion, not clear
conditions.
Because decisions are based on discretion in
the case of community care grants (CCGs) and crisis loans (CLs),
there is ample scope for the exercise of discrimination, differential
treatment and judgmental behaviour. The extent of discretion is
indirectly increased by the imprecise wording of the directions;
in particular the phrase "exceptional pressures" in
direction 4 (CCGs). This may explain the relatively high proportion
of CCGs rejected where the claimant does not meet the eligibility
criteria. Richard Berthoud describes this direction as requiring
an "essentially discretionary judgment" even before
the exercise of deciding priorities. [6]
Discretion in decision making also decreases
the level of accountability of officials for their decisions.
1.3 Problem of hidden discretion.
The operation of the new Budgeting loan scheme
does not depend on the operation of discretion in individual cases—it
does depend on the size of the budget at any one time in a particular
office. This figure is calculated by feeding into the computer
a combination of facts and guestimates. For example the manager
of the office must take into account the likely number of future
demands on the loans budget for both crisis and budgeting loans
(the former are paid out on a purely discretionary basis) and
the number of likely loans that will be made as a result of reviews.
To this extent the state of the budget is a moveable feast but
is vital in calculating the size of the budgeting loan offered,
and in some cases may result in a refusal. The basic criteria
for awarding budgeting loans are the length of time on benefit
and the size of the family unit. Any time on benefit over three
years is discounted. A previous budgeting loan debt not yet paid
off will also affect the calculation.
1.4 The social fund budget is a means
of controlling expenditure at the expense of claimants.
The social fund budget for grants was set at
a level which was approximately a sixth of the expenditure on
single payments before these were pared back in 1987. One of the
stated objectives of the social fund was to "curtail and
control expenditure on special needs payments".[7]
In so far as the budget for grants has only increased broadly
in line with inflation between 1988 and 2000 (£60 million
to £100 million) and the budget for loans is now almost entirely
financed by claimants through the repayment of loans monies this
particular objective has been successful. It is not an objective
which serves the interests of claimants and it appears to conflict
with the current government objectives to tackle social exclusion
and abolish child poverty.
It is worth noting that since the Labour Government
came to power in 1997 the grants budget has increased by less
than the rate of inflation—by around 2 per cent. The government
retained the social fund budget set by the previous Conservative
administration which included a grants budget of £97 million,
increased the allocation to £98 million in the following
year to allow for a new category of need to be covered. In the
year 2000 the grants budget was increased to £100 million.
1.5 The Social Fund is financed by the
poor.
The poor are subsidising the poor. Money from
the repaid loans money goes to finance the future year's budget
and to increase allocations during the course of the year. Additional
allocations to the Fund which are from repaid loans money may
also go to increase the grants budget.
1.6 The social fund fails to meet need.
The directions make it clear that need will
not always be met quite apart from the issue of priorities. Certain
needs are excluded, there is a severe capital test and the exclusive
nature of the terms of eligibility under direction four limit
the help available. A person who is likely to be unable to repay
a loan is also not eligible however great the need. This provision
is in direct conflict with one of the stated objectives of the
Fund when it was first established—that it should target
resources on those in greatest need. Moreover the new budgeting
loan scheme limits access according to the amount of debt still
owed on the previous loan rather than giving consideration to
the extent of the need that has caused the application.
Case: Lone parent unable to move into tenancy
from homelessness accommodation because she has no household equipment
or furniture. No support from child's father who has made violent
threats against the family. There is no general provision to cover
the cost of obtaining furniture for newly offered accommodation.
The mother is on anti-depressants which is likely to continue
while she is in this situation. (The NHS in this case picks up
the cost of the inadequacy of the Social Fund.)
1.7 There is a conflict between consistency
and flexibility.
The budget and priorities result in inconsistency
in decision making—between officers in the same office,
between decisions made at different times of the year and inconsistency
between offices. When the Social Fund was established one of the
stated objectives was to encourage flexibility in assessments.
This principle is overturned by the operation of the new budgeting
loan scheme which as far as possible except for the budget element
is operating a uniform system. One of the reasons given by the
government for the new scheme was the desire to move to more consistent
decision making. In April 1999 the base figure[8]
was in most areas around £399.60 but by the summer of the
same year the base figure ranged from £199.80 to £285.43.
In an attempt to deal with the resulting area lottery the government
reallocated monies between offices.
The lottery which results from flexibility in
decision making and the operation of the budget in the case of
community care grants and crisis loans remains unchanged.
The different and conflicting principles of
flexibility and consistency operate alongside each other.
1.8 Disbelief of the genuine nature of
claimants' needs.
The take up of single payments had increased
year by year between 1980 and 1986 (when single payment rules
were subject to substantial change). It is likely that two of
the main reasons for increased demand were the result of:
— gradual awareness of the provisions
of the scheme—a similar increase in take up occurred as
knowledge of the social fund spread; and
— the dramatic increase in poverty
in the 1980s.
The fact that demand grew did not however mean
that claimants were necessarily attempting to mislead officials.
Under the single payments scheme claimants were required to satisfy
a test of "need" in order to be awarded a payment.
Under the social fund the suspicion about the
validity of applications continues. An adviser to young people,
who often require urgent help, finds that their needs are "simply
not believed". She writes:
With our nearest Benefits Agency about 10
miles away it is no joke for a young person to walk all that way
because they have to apply in person only to be told "no,
you are not entitled to a crisis loan". They then have to
face the walk back, often not having eaten or drunk anything for
several hours if not since the day before because they have no
money. Bus fares are not reimbursed for unsuccessful claims.
1.9 Access to the fund is difficult—applications
are not made to the Fund as a whole.
Applicants must make separate applications for
each type of payment. There is no scope to consider an application
for a BL as also an application for a CCG.
This has a detrimental affect on some claimants.
There is some degree of overlap between the provision under direction
4 (CCGs) in particular the "exceptional pressures" test
in paragraph (a)(iii) of the direction and the items for which
a BL may be paid under direction 2. Thus the cost of furnishing
a home with basic essentials depending on the circumstances of
the case could be met by either a CCG or a BL. However, CPAG has
been told of cases where claimants are being advised to claim
a BL rather than a CCG even though they may qualify for the latter.
This dilemma is further complicated by the fact that the BLs are
processed rather more quickly than CCGs and once the former has
been awarded it may be more difficult to get a CCG because the
need has been met (despite the fact that the BL will have to
be repaid).
Case: Mr H needed to obtain furniture
when he was offered permanent accommodation together with his
family. He was born physically disabled, needed to use an oxygen
bottle at all times—without this his heart would fail—and
he required a respirator throughout the night. He was sleeping
on the floor with his family and trying to save for beds and bedding.
The advice agency obtained the items he needed most urgently via
an application for a BL and the remainder via a CCG but only after
more than two months' wait while the application went through
the review procedure.
2. The Social Fund in the context of benefit
levels and adequacy measures
2.1 Need for lump sum payments to supplement
benefit levels.
There is a need for some kind of lump sum provision
to supplement benefit levels. This is supported by recent research
examining the extent to which people are forced to do without
commonly agreed necessities. It is also consistent with the development
of concepts of minimum income standards which attempt to set or
measure adequacy of income levels.
2.2 Lump sum payments since 1935.
The need to top up weekly means tested benefits
has been recognised since the thirties. Prior to 1979 the lump
sum payments were made on a discretionary basis but not subject
to a cash limit. From November 1980 until April 1988 the payments
were made in accordance with regulations. Claimants who satisfied
the conditions were therefore entitled to the payments.
2.3 Effective cut in benefit levels in
1988.
The move from supplementary benefit (SB) to
income support in 1988 marked a significant change in benefit
provision. The basic weekly SB allowance was not intended to meet
large household expenses. The regulations listed what the benefit
should cover including "normal travel costs" and "small
household goods (for example crockery, cutlery, cooking utensils,
light bulbs)". [9]
In addition there were single payments for,
for example, essential furniture and housing equipment, expenses
on starting work, and clothing and footwear.
With the introduction of income support and
the budget limited social fund claimants were therefore meant
to meet all expenses, large and small, regular and unforeseen
from their weekly benefit allowance. This was in effect a reduction
in the level of support for most claimants. Benefit levels were
reduced still further once claimants took out loans and deductions
were made to income support to repay the loans.
Other changes in 1988-89 also had the effect
of reducing the value of benefit levels. For example water rates
which had been met in full were now the responsibility of the
claimant. A notional element was included in the new income support
applicable amount towards water rates. This change was all the
more important once water supply was privatised and costs dramatically
increased. Benefit levels however, only went up in line with the
Rossi index (RPI excluding housing costs). In addition many claimants
had to meet increasing amounts of housing costs (whether as home
owners or tenants) from their weekly benefit. These costs were
not met in full by either housing benefit or the housing costs
element of income support.
2.4 Benefit levels are reduced further
by the level of deductions from benefit. [10]
The total number of deductions made from income
support in August 2000 was 1,634,000 of which 746,000 were made
for social fund repayments. The deduction figures for social fund
repayments has been steadily rising—531,000 in August 1996,
586,000 in August 1998 and 671,000 in August 1999. There are also
considerable numbers of deductions made from income based JSA
to repay social fund loans. In February 2000 the figure was 160,000.
Of the social fund deductions made to income
support 32 per cent were made to benefit paid to those classified
as disabled, and 51 per cent to those classed as lone parents.
The size of the deductions is also considerable.
In the case of income support the average deduction made for social
fund repayments is £9.60. This is equal to 36 per cent (or
just over a third) of the allowance for a child under 16 (August
2000 rate).
Effectively the annually agreed rates of benefit
voted by parliament are therefore not the levels of benefit on
which claimants actually depend in practice for their living expenses.
2.5 Conflicting demands of weekly/everyday
costs and lump sum expenditure.
There are broadly three types of lump sum costs:
— large expenses associated with the
home which may be predictable or unforeseen; and
— smaller expenses which if benefits
were at a higher level could arguably be met from weekly benefit—they
may be predictable or sudden and include in particular clothing
and travel costs.
The difficulty of budgeting for larger items
of expenditure even if they are foreseen is demonstrated by recent
findings showing that 25 per cent of adults were unable to save
£10 a week on a regular basis. [11]
Usually these larger costs are home furniture
and equipment including electrical and gas appliances. The Family
Budget Unit in 1988[12]
listed and costed all the essential items of furniture. For example,
a child's bed was £179, an amount which most families on
benefit would not be able to meet without taking out a loan of
some kind.
In the case of fuel costs some families attempt
to budget by paying by prepayment meters, a system which both
spreads the cost but which also hides the levels of hidden disconnection.
They do not then have the opportunity to benefit from the discounts
available to customers paying by other means.
Whether or not they are predictable these larger
expenses will be impossible to meet without turning to other forms
of credit or the Social Fund for assistance. Where claimants do
apply for budgeting loans successfully they use the loan to pay
for essential items such as beds and bedding and to pay household
bills. [13]
Lack of access to social fund grants and budgeting
and crisis loans because of existing debt or inability to repay,
or ineligibility mean that some will choose to go without or make
do or turn to the private sector for a loan at exorbitant interest
rates. DSS research found that credit unions were not an option
for those living on income support or income based JSA—those
who used the Social fund were generally more financially disadvantaged
than those who were members of credit unions. [14]
Smaller lump sum expenses such as paying for
replacement clothing and meeting travel costs may in the longer
term be expenses that can be met from weekly benefits as rates
are increased. However difficulties arise for families where costs
are bunched together, for example where growth spurts require
the replacement of several items of clothing and footwear at one
go. This problem will be exacerbated or likely to occur more frequently
where families are larger. Research in 2000[15]
found that a significant proportion of children were without basic
essentials such as "new properly fitted shoes", a "warm
waterproof coat" or the "required school uniform".
These were items described by parent participants in the survey
as necessities, (96 per cent, 95 per cent, and 88 per cent respectively).
The study found that where there were three
or more children they were more likely to be without two or more
of the recognised necessities.
It is worth noting that even under the single
payments scheme that existed prior to 1988, parents were expected
to pay for clothing out of weekly benefits in most cases but some
grants were available in limited circumstances. Even this proved
problematic for families and many turned for example to the Family
Welfare Association to seek assistance.
In contrast the Supplementary Benefits Commission
(pre-1980) recognised the inability of claimants to save for both
larger and smaller lump sum expenses and therefore made provision
for exceptional needs payments. Officials of the DHSS were advised,
for example, to take into account the fact that a claimant had
lived on supplementary benefit for some years or that there were
children particularly if there was only one parent. [16]
2.6 Adequacy measures.
The government has recognised that a budget
standard is required when establishing benefit levels and would
be in accordance with their declared objective of abolishing child
poverty by 2019. There have been a variety of budget standards.
The Family Budget Unit has developed a series of minimum income
standards over the last decade. [17]
More recently in 1998 a Low Cost but Acceptable
minimum income standard was established. The report identified:
— standard costs including food, clothing,
household goods and services; and
— core variable costs including housing,
fuel, transport, job related costs, debts and maintenance and
lifestyle variables including leisure costs.
There was a considerable difference between
the level of benefit payable and the FBU standard. For a couple
with two children under 11 in January 1998 the FBU estimated a
shortfall of £39.07. By July 2000 the shortfall had dropped
to £11.42. In the case of a lone parent with two children
under 11 the shortfall in 1998 was £26.83. Because of the
withdrawal of the higher rate family premium from lone parents
they have not benefited to the same extent from the increases
in benefit since 1998—their shortfall in July 2000 was £10.58.
Assuming the government closes the gap between the FBU standard
and benefit rates within the year the way the figures are compiled
still make it clear that it would be quite impossible to pay for
expensive lumpy items. Some of the families involved in this budget
standard notably criticised the figures as mean although some
adjustments were made to the figures.
To establish the weekly minimum income standard,
amounts were included for all types of expenditure including clothing
and furniture etc. The weekly figure for an item of furniture
was its total value divided by its expected life and the final
figure divided by 52. The gas cooker was priced at £312 which
translates into a weekly figure of 50p. In reality no family can
take out credit and repay at the rate of 50p a week; nor can a
family on benefit without savings buy the cooker outright. Effectively
this puts the cooker beyond the reach of the family unless they
can obtain a loan whether from the private or public sector with
all the disadvantages which accrue to both.
2.7 Methods of measuring adequacy.
A minimum income standard is a "defensible
standard of adequacy for minimally acceptable levels of living
or income needs".[18]
3. Specific issues demonstrating the need
for lump sum payments/not addressed by weekly payments
(The following are issues also addressed
by the Family Welfare Association in their submission to the committee.)
3.1 Long term dependency.
There is no allowance for the additional costs
that arise after having been on benefit for a long period. Inevitably
expenses will arise that a family cannot meet after being reliant
on a low income for many years. In some cases there will be no
chance of the adult(s) returning to work because of long term
disability and the income from benefits will be the only source
from which to save—an impossibility in practice. This situation
will equally apply to the elderly and disabled living alone. In
contrast under the supplementary benefits scheme administered
by the Supplementary Benefits Commission there was a recognition
that claimants dependent on benefit for a long period such as
the disabled would need access to lump sum payments.
Case: Disabled woman suffering from rheumatoid
arthritis and with severe mobility problems—suffers pain
when walking.
— Has no TV, unable to afford to replace
the previous set.
— No telephone—unable to pay
bills.
— Has a microwave only, but needs a
basic cooker.
— Has a Raeburn fire which is broken
and cannot afford to replace—it gives off fumes and is a
health hazard.
3.2 Larger families.
The benefit structure does not adequately reflect
the additional costs of larger families. For example the family
premium is paid at a standard rate, and assistance with child
care costs only differentiates between those with one child and
those with two or more children. There is an argument for relating
the family premium to family size in addition to re-examining
policies on awarding grants.
3.3 Disability and health needs.
These create additional costs which may not
be covered by disability benefits or the disability related premiums
to means tested benefits. Moreover in the case of children with
chronic illnesses there may be no entitlement to DLA and therefore
the disabled child premium will not be payable. In contrast adults
who do not qualify for DLA may be paid the disability premium
because they have been incapable of work for 52 weeks.
3.4 Inflexibility of the weekly benefit
system.
Moving in and out of work, in and out of sickness,
in and out of study and the break up of family relationships can
involve additional expenditure or changes in entitlement to benefit
which may create budgeting problems. The government has begun
to recognise the need to take account of the costs of moving into
work with the payment of the back to work bonus, and the lone
parent run on but the rules associated with these benefits are
very complicated. Claimants can easily lose out as a result.
4. Other Policy Contexts—Why Change
Now
4.1 Appropriate time to make changes.
There are policy and organisational changes
currently taking place which arguably will assist reform of the
social fund.
4.2 Integrated Child Credit.
Currently eligibility for budget related social
fund payments depend on receipt of income support or income based
jobseeker's allowance. The one exception to this rule are crisis
loans which in restricted circumstances can be made to any one
in need regardless of the benefit they receive (if any). The proposal
to introduce a new integrated child credit (ICC) payable to people
both in and out of paid work and which will replace the elements
for children in income support/income based JSA and working families
tax credit, raises new possibilities about eligibility for social
fund payments. Receipt of the ICC could become the trigger for
eligibility for a lump sum payment overcoming the difficulty that
these are now only made to those out of work. The introduction
of the ICC is an opportunity to rethink how families with children
can be helped to meet "lumpy" expenses.
4.3 Reorganisation of the delivery of
benefits/establishment of a Working Age Agency.
The restructuring of the system of benefit delivery
brings the work of the Employment Service JobCentres and Benefit
Agency closer together. It is not yet clear how the new Working
Age Agency will develop. Current programmes involve the development
of an important role for personal advisers based in Job Centres
advising both those on JSA and those claiming income support.
CPAG views with some concern the expansion of programmes of compulsory
interviews but welcomes the wide ranging potential role of the
new personal advisers. Could these new style workers within organisations
crucial to benefit delivery also deal with issues relating to
lump sum payments? Where personal advisers are concerned with
the operation of New Deal and advising lone parents through the
new compulsory work-focused interviews they are already addressing
work related lump sum payments—for example the need to consider
recommend payment of one of the grants helping with the costs
of looking for work or returning to work. However these grants
are discretionary and there is a need to know more about the circumstances
in which these grants would be awarded.
CPAG's proposals for lump sum payments (see
below) are concerned with the needs that are not necessarily work
related. It may therefore not be appropriate for these needs to
be met by officers working within an environment which is primarily
concerned about encouraging people back to work. The personal
adviser may be an appropriate model to extend to other offices
of the DfEE/DSS/Inland Revenue in which people, whether in or
out of work, need financial support and therefore need to claim
tax credits or social security benefits. In general it is probably
wise to keep the financial support separate from other types of
activites. For example it could be argued that a health visitor
or a person based in new style community health clinic or centre
could be ideally placed for delivering certain types of benefits
including one off payments. However it is likely that these workers
would not want to participate in a process that could lend a negative
aspect to their work—if they were the worker to respond
negatively to a request for financial assistance. The same would
be likely to be true of housing workers and other support workers
based in the community.
Without knowing how the new model Working Age
Agency is to evolve, it is difficult to make precise recommendations.
In principle, it would be desirable for those who deliver financial
support to decide entitlement to lump sum payments and not those
providing other services.
5. Possible Solutions
5.1 Current ideas.
These include:
— Schemes based on asset based welfare.
— Reforming credit schemes so that
they take account of the interests of those on low incomes including
those on benefits.
— Extending the system of grants based
on regulations with rights of appeal.
— Introducing automatic or regular
grants.
— Creating or retaining a discretionary
top up scheme.
None of these schemes should be seen as adequate
in isolation. They should be seen as part of an overall package
of reform. The basic principle that must underlie any change however
is the recognition that low income families need more money and
that in the short term that may be delivered through a variety
of one off payments. Simply improving the system of credit although
desirable in its own right will not be a solution.
A major criticism of one off payments in the
past and which applies equally to the existing CCG's is that they
are complex, time consuming and expensive to administer. This
is an important consideration. However in CPAG's view the first
objective must be to find a solution that assists poor families.
A partial solution to this problem is to increase the number of
grants that may be easy to administer that is event related or
automatic. This would reduce the demand for those payments that
may be more complex to consider.
It is also important to view the payment of
most grants as an interim solution until the Government has been
able to raise the living standards of all those reliant on social
security benefits to a level where children no longer live in
poverty. There may nevertheless need to be some grant provision
retained even then.
6. A New System of Grants-CPAG's Proposals
6.1 Annual child development grants.
(regulation based/regular or automatic)
The frequency, size and scope of the grant are
matters for debate. They should have a health and educational
bias. Arguably they could be designed to contribute towards a
variety of costs:
— Replacement of clothing and shoes.
— School uniform costs (alternatively
this might be dealt with separately).
— Educational needs including a basic
allowance for books—if the Sainsbury scheme is not continued.
Should there also be an element towards the
cost of school educational trips, and a contribution towards IT
expenses? Currently children from poor homes are often excluded
from school activities because of the costs involved.
Ideally a grant should be paid each year, in
particular for the first five years of the child's life. This
would be consistent with other social security policies, for example
the compulsory interviews only apply to lone parents who have
children aged at least five years and three months.
In addition parents are faced with the extra
costs when a child moves school. Should the grants only be made
in these "special years" or be paid annually/biannually
until the young person reaches the age of 16. The justification
for such regular payments is that the fact that there will inevitably
be a bunching of costs associated with growth spurts, plus the
education costs mentioned above. The size of the grant will inevitably
depend on its scope. It might also need to increase to reflect
the additional costs of clothing for older children.
The timing of the grant may be a matter for
consultation with parents. However CPAG's initial view is that
it might be most appropriate to pay it at the start of the school
year.
6.2 Event related grants.
(regulation based)
(a) Pregnancy grant
A payment to the mother, available from the
24th week of pregancy (arguably the high rate of miscarriages
before that means it would be hard to justify from the date the
pregnancy is confirmed). This would go to meet the additional
requirements and costs of pregnancy, in particular, extra dietary
needs and maternity clothing. Such a payment could be made in
more that one instalment. The additional support would be consistent
with the Acheson Report recommendations and the Government's desires
to encourage contact with health professionals.
(An alternative would be to pay a pregnancy
premium as the Maternity Alliance has recommended, and which CPAG
would support).
(b) Home establishment grant
These might be paid in the following circumstances:
— Coming out of an institution to live
in the community—this could be from hospital, prison or
nursing home.
(None of these are every day events and they
are expensive. They are also easy to define.)
There is moreover a wealth of evidence that
many families live without basic essentials or their move is delayed
because they are unable to afford the most basic of furniture
and household equipment.
6.3 Core items grant.
(regulation based)
A set group of essential items, such as bed(s),
fire, cooker to which anyone on benefit should have an entitlement.
This would cover the supply of new or replacement items.
Matters for debate might include:
— Should the core items vary accordingly
to the size and nature of the family?
— Should disability or social isolation
be grounds for adding TV and a telephone to the list?
— Should there by any limitation on
the number of grants awarded in a specific time span or should
it depend merely on need.
6.4 Household safety grant.
(regulation based)
To some extent this overlaps with the idea of
a core items grant.
This would be a lump sum award to enable families
who have been on benefit for six months or more to replace electrical/gas
appliances in the home. A payment might be made before the person
was on benefit for six months if the need was particularly urgent.
The justification for such a payment is that
claimants should have access to electrical and gas appliances
that are safe and of good quality. Unsafe gas and electrical items
puts all members of the household at risk.
It may be appropriate for claimants to demonstrate
need in such cases.
6.5 Household assets payment.
There is now some discussion about other methods
of providing assistance to families to meet broadly identified
needs through "assets welfare". It may be appropriate
for this to be considered as an alternative (or additional?) system
of assistance to lower income families in relation to meeting
the costs of furnishing a home.
However it is difficult to identify at what
point the payment might be made—would the family have to
be reliant on benefits for a considerable period of time first
before qualifying? Could the payment be made into a bank account
or some other type of account and amounts drawn out at particular
times to assist with these household costs? Such a payment might
be made partly to meet immediate costs but also on the condition
that a portion is set aside for savings to meet replacement costs.
CPAG has some doubts about the viability of
asset based welfare but alternative mechanisms for providing for
these more expensive necessities may be worth considering.
6.6 Discretionary grants.
There will be occasions when the grants described
above would not meet the needs of some families. Larger payments
might be needed to top up the other grants on a discretionary
basis. Discretionary payments should not however be subject to
a cash limit as under the current social fund.
7. Longer Term
As levels of social security benefits and tax
credits increase so the need for some of these payments will disappear—they
should be seen as an interim measure until benefits are sufficient
to allow people to save to meet sudden demands on their income.
However there may be an argument for saying
that some kind of home assets payment might be required on the
basis that these costs are too high for those on lowest incomes
to meet. The assets payment together with a reformed system of
credit might then be sufficient to provide adequately for families.
Policy changes which would result in the reduction
of the incomes of those on lowest incomes should only be made
after careful analysis of the evidence.
How lower income families do or do not meet
these expensive costs should be kept under review.
Beth Lakhani
January 2001
6 The Social Fund-is it working? Richard Berthoud,
Policy Studies Institute. Back
7
The Social Fund-is it working? Richard Berthoud, Policy Studies
Institute. Back
8
The base figure is the amount that can be awarded in a particular
office for a single person who has been on benefit for six months. Back
9
Regulation 4 Normal requirements, Supplementary Benefit (Requirements)
Regulations 1980. Back
10
Annual Report Secretary of State for Social Security on the Social
Fund 1999-2000 and Income Support quarterly Statistical Enquiry,
August 2000. Back
11
Poverty and Social Exclusion in Britain, Joseph Rowntree Foundation,
September 2000. Back
12
Low Cost but Acceptable-A minimum income standard for the UK:
families with young children, The Family Budget Unit, published
by Zacchaeus 2000 Trust. Back
13
Saving and Borrowing. Use of Social Fund Budgeting Loans and Community
Credit Unions, DSS Report No 125. Back
14
Saving and Borrowing. Use of Social Fund Budgeting Loans and Community
Credit Unions, DSS Report No 125. Back
15
Poverty and Social Exclusion in Britain, Joseph Rowntree Foundation. Back
16
A Code Supplementary Benefits Commission, par 2881. Back
17
The Cost of a Child. Living Standards for the 1990s. This established
the Modest but Adequate budget standard and the more meagre Low
Cost Budget. Back
18
Setting adequacy standards, John Veit-Wilson. Back
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