Memorandum submitted by Contact a Family
INTRODUCTION
1. Contact a Family is a charity providing
advice, information and support to families with disabled children
across the UK. Each year we advise over 18,000 families through
our helpline and information services. We draw on the experiences
of these families in submitting our evidence.
SUMMARY
2. Families with disabled children experience
disproportionate levels of poverty and debt. They often lack access
to affordable credit and to mainstream providers of free money
advice and financial advice. The Social Fund fails to meet the
needs of families with disabled children.
3. Recommendations. Government measures
to increase financial inclusion, though welcome, will not in themselves
ameliorate the situation of families with disabled children unless
they are combined with an anti-poverty programme which specifically
addresses the needs of these families—for example by enabling
work through increasing the amounts allowed for childcare in Tax
Credits. However, families with disabled children certainly need
increased access to debt advice, preferably through home visiting
projects. The Government needs to increase the provision of free
Independent Financial Advice through partnerships with the voluntary
sector. The Government needs to increase the amount of grants
(not loans) from the Social Fund and extend the criteria to include
working families on low incomes.
POVERTY, DEBT
AND FINANCIAL
EXCLUSION AMONGST
FAMILIES WITH
DISABLED CHILDREN
4. There is widely accepted evidence that
families with disabled children live in poverty. It is estimated
that up to 55% of disabled children grow up in or on the margins
of poverty. Bringing up a disabled child cost three times as much
as a non-disabled child as there are additional expenses such
as extra heating, special diets, equipment to buy and so forth.
It is much harder for parents to enter or retain employment. Only
16% of mothers of disabled children work full or part time, compared
with 61% of other mothers. Research by Contact a Family and the
Family Fund with 1,843 respondents found that families with disabled
children were much more likely to be in debt than other families.
We found that families with disabled children were four times
as likely to owe in excess of £10,000. 14% had mortgage or
rent arrears, and 15.7% had Council Tax or utility bill arrears.
Over 60% of families agreed that "Some of my debts are due
to having additional expenses arising from my disabled child".
"My daughter has an undiagnosed disability
and we have been refused Disability Living Allowance. Two months
ago I was involved in a road traffic accident and have not been
able to work since. I can't keep up the repayments on my loans"—mother.
Contact a Family, in common with other charities
has recently also seen a huge rise in enquiries about debt arising
from tax credit overpayments
"I owe the Inland Revenue over £4,000
which they are taking at £60 a week. I just can't manage
on what is left from my wages".
5. Families were asked whether they agreed
or disagreed with the statement, "It is hard to get advice
about dealing with debt in my area". The responses indicate
that about 45% of families have possibly sought advice or considered
doing so. Only one in five families disagreed with this statement.
Possibly the most disturbing feature of these responses is that
54.6% of families don't know whether it is hard to get advice
in their area, indicating that they either feel that they do not
need advice, or that they haven't sought advice. This is significant,
given that 84.35% of the sample reported being in debt and 52.3%
describe their family financial situation as on one of the following—"Scraping
by and robbing Peter to pay Paul", "Struggling and having
debts that are beginning to worry them", or as having "very
serious financial difficulties".
| Count | %
|
| Agree | 483 | 26.2
|
| Disagree | 353 | 19.2
|
| Don't know | 1,007 | 54.6
|
| 1,843 |
|
ACCESS TO
FINANCIAL ADVICE
ABOUT DEBT
6. Families report to the Contact a Family helpline that
it is very difficult for them to get access to any mainstream
services. This might be because they are effectively housebound
because their child is ill. Or, their child may have a condition
such as autism and not be able to tolerate the long queues which
are found in many advice services.
7. Improving access to telephone advice services and
financing advice services which provide a significant ability
to carry out advice by home visit are both essential components
of ensuring that families are able to access both welfare rights
advice to increase their income and money advice to assist them
with any debt problems.
ACCESSING FINANCIAL
ADVICE ABOUT
SAVINGS PRODUCTS
8. Contact a Family is allowed to give advice on most
topics, being Community Legal Service approved for advice at general
help level; registered with the Office of the Immigration Service
Commissioner and shortly to be covered by Advice UK's group licence
for money advice/debt counselling. However, we are not allowed
to give financial advice which involves recommending a particular
savings product type or identifying a specific product to buy,
since these are regarded as forms of advice regulated by the Financial
Services Authority. Such advice is provided by financial advisers
under the full and basic advice regimes.
Early indications are that less than half of parents invest
the Child Trust Fund vouchers that each newborn is entitled to.
Our experience with parents of disabled children suggests they
are finding it difficult to decide which product would be best
for them. Like most people faced with a bewildering choice full
of technical terms that they do not understand, they simply put
the paperwork behind the clock and do nothing. This may well not
be in their best interests. Most Independent Financial Advisers
are not going to be very interested in providing financial advice
on an investment of £250-£500, since they will not make
much if any commission on this and it would not be worth the parents'
while paying a fee for advice on such a small sum. This might
explain why a scheme to provide incentives to the poorest families
to start saving has in practice only been taken up by the educated
and well off.
9. We believe that the Government should give consideration
to pilot schemes to fund IFAs to be based in voluntary organisations
such as local advice centres or national voluntary organisations
such as Contact a Family's national freephone helpline. This would
help parents to make the best choice from the available products
and open up access to financial advice to low income families.
That way there would be no question of fees or commission to put
people off and families already trust organisations such as Citizens
Advice Bureaux and Contact a Family to give them good advice on
all other areas of their lives.
10. Separate research from the Family Fund suggests that
families with disabled children are less likely to be paying into
pensions. Pension payments account for, on average, £21.20
of weekly UK family expenditure. Amongst the Family Fund research's
sample group, this falls to £6.02, £15.18 below the
UK average. Indeed, the samples expenditure on pensions is the
lowest of the ONS comparable expenditures. This suggests that
families are not only poor now, but they are storing up poverty
for old age. Getting Independent Financial Advice about pension
provision is essential in order to avoid future poverty.
ACCESSING THE
SOCIAL FUND
11. The Social Fund was launched in 1988 to replace a
system of grants which were available as of right. The Fund is
largely discretionary, cash-limited and consists of a combination
of grants and interest-free loans. As a principle, Contact a Family
believes that Community Care Grants should be mandatory and not
limited by budget. Grants should be provided to individuals who—
(a) fit into objectively defined priority criteria, including
those caring for a child in receipt of Disability Living Allowance;
(b) have need of items which may be defined as basic
essentials such as beds, bedding, cookers, travelling costs for
urgent purposes and so on; and
(c) meet a test of financial resources.
12. Grants should have objectively defined criteria in
relation to age or health or serving a particular length of prison
sentence. This would stop the current practice of having to demonstrate
that you or your child will be admitted to care if a grant is
not made. For many families having to state in writing that they
are unable to cope and feel that their child will have to be admitted
to care is the very last thing that they would want to do. There
are some items that any decent society, which agrees a relative
definition of poverty, would agree are necessary. It is clearly
unconscionable that a well off society can tolerate vulnerable
people living without beds, bedding, and the means to cook a meal,
or store food. We further believe that grants should not be restricted
merely to those in receipt of Income Support or Income Based Job
Seekers Allowance but more generally available to low income groups.
With the introduction of the new tax credits regime and the different
ways that families are supported, many families will not qualify
for Income Support, particularly those who also receive Incapacity
Benefits or who maintain some form of part time employment.
"I have lost all the extra I got on the tax credit through
having to take a loan from a loan shark after I was burgled. The
Social Fund said they couldn't help at all"—father.
"My son has talipes and is constantly wearing his shoes
out. We can't afford to buy him any more and it is winter. As
we are on Working Tax Credit we can't get the Social Fund. Are
there any charities that will help with shoes?"
"Since going on tax credits we cannot get access to social
fund grants any more, which is unfair as we are only a little
bit better off and still cannot afford the big things"
13. We support the government's view that the natural
way out of poverty is access to work, whilst recognising that
this will never be a possibility or indeed a choice for some of
our families. However, work for those that can is clearly right.
Yet those who are at work are currently denied access to grants
from the Social Fund, whilst having similar needs to workless
families and often, only slightly greater financial resources.
Those in unskilled, insecure positions of work may be driven to
accept door to door credit at extortionate interest rates, which
can leave them with less income than those out of work. This clearly
does not dovetail with the overall priority of giving incentives
to families to work.
We do appreciate that the one advantage of the Social Fund
over its predecessor is the ability to be flexible and responsive
to the more unusual, but no less valid needs. These needs may
occur more frequently in our families, many of whose children
are affected by rare medical conditions. We would recommend retaining
a small discretionary element in addition to the mandatory scheme
described above to allow the fund to retain some elements of flexibility.
LOANS
14. We feel that there is some merit to the retention
of a loan scheme for those in non-priority groups or for non-essential
items for priority groups. Allowing families access to interest
free loans for items, which are considered important in a modern
society- for example a computer to help with homework, stay in
touch with family abroad by e-mail or search for work, is very
worthwhile. It also prevents people from having to use more expensive
forms of credit. Again, we would wish to see access extended to
those on low incomes.
FUNERAL GRANTS
15. We understand that Social Fund funeral grants average
£866. Given that an average funeral will cost over £1,500
we would call for an urgent review of the upper limits.
Of particular concern is the plight of parents who tell us
that they cannot afford a headstone for their child's grave. We
have spoken to parents on our helpline who have acquired a large
debt that they cannot hope to repay in order to cover these kinds
of costs. Complicated rules on absent partners and close relatives
amount to an inflexible and insensitive set of exclusions which
lead to emotional and practical difficulties.
MATERNITY GRANTS
16. We welcome the increase of the Sure Start Maternity
Grant to £500. We have had reports of the following difficulty
with the present scheme.
Some women will only qualify for a Maternity Grant once the
child is born (particularly if it is a first child and she is
not currently on a qualifying benefit). This means that they are
unable to shop in advance for the things the baby will need. For
single parents particularly this is problematic—having just
had a baby is the worst time to be having to shop on your own
for essentials like a pram or cot. We should like to propose that
a woman might be given the option of an anticipatory award on
condition that the grant should be repayable should she not subsequently
be awarded a qualifying benefit.
NEW GRANTS
17. We would also like consideration given to new grants
in relation to children at various trigger points. We do feel
that a grant should be paid on starting school for the first time,
the amount to vary depending on whether the school has a compulsory
uniform or not. We feel that this would be preferable to the system
of discretionary grants currently operated by Local Education
Authorities, which can lead to a postcode lottery. Grants could
be triggered at each change of school. If necessary similar factors
could be brought to bear as in the maternity grant—for example
that grants could be payable if there is a satisfactory attendance
record or on advice being sought on behaviour management if children
have been excluded.
We would also like to see a "back to work grant for
parents". This could complement other initiatives such as
the lone parent benefit run on, designed to help with living costs
until the first wage is paid. This grant might help towards initial
extra childcare and travelling costs until the first wage is paid.
A higher rate could be considered where a child is disabled.
November 2005
| 
