Unequal impact? Coronavirus and the gendered economic impact Contents

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3Benefits and Social Security

32.In this Chapter we consider the gendered impacts of the changes to the benefits and social security system during the pandemic.

Pre-pandemic trends

33.Pre-pandemic research showed that women were more likely than men to claim benefits at some point in their lives,50 and thus were more affected by its design and overall generosity. Witnesses told us that the timeliness and structure of benefit payments could give rise to gendered economic effects. In April 2020, Professor Fran Bennett of the University of Oxford wrote that “outdated assumptions about family life” still remained as cornerstones of Universal Credit design.51

Situation during the pandemic

34.The pandemic has caused a large increase in the number of people claiming benefits. There was a 90% increase in the number of people on Universal Credit between 12 March and 8 October.52 Over 700,00 people who applied for Universal Credit during the first month of lockdown remain on the system.53 Claims for other working age benefits also increased: the Department for Work and Pensions received over 250,000 claims for Jobseekers’ Allowance and over 20,000 claims for Employment and Support Allowance.54

35.Dr Monica Costa Dias from the IFS warned that those losing their job at this time faced long-term unemployment and a prolonged period relying on government support. She emphasised the need to carefully consider the longer-term support required by people.55

The Adequacy of the Safety Net

Universal Credit

36.On 20 March, a number of changes to the welfare system were made to “strengthen the safety net”.56 The basic Universal Credit (UC) award was raised by £20 per week (£1,040 per year), the maximum amount that claimants could receive to help with housing costs was increased, and the “minimum income floor”57 was suspended. These temporary expansions are due to end in April 2021 and have not been extended to legacy benefits. The benefit cap58 on the total value of benefits claimants can receive has remained in place, as has the two-child limit.59

37.The Minister for Employment, Mims Davis MP, called the £20 a week increase to Universal Credit “a really important intervention for families most in need”.60

38.Witnesses broadly welcomed these changes, although concern was expressed about the overall generosity of the welfare system. The pandemic had exacerbated perceived weaknesses in the Universal Credit system: for example, the requirement for a five-week wait for the first payment; single household payments; and joint household assessments and incentives.61

39.After submitting a claim for UC, some applicants may have to wait at least five weeks before receiving their first payment. We heard that the five-week wait can cause particular difficulties for women in abusive relationships, especially during the pandemic, as other opportunities for support have been restricted.62

40.Evidence has shown that single household payments as a default can make it easier for perpetrators of abuse to control their victims.63 The WBG argued that the ability to request alternative payment arrangements has been insufficient to alleviate these risks over the pandemic (and is also problematic in “normal” times).64

41.Eligibility for UC is assessed at the household level. Both partners earnings and savings are assessed for eligibility and both partners must agree an individual claimant commitment. There is only one work allowance (earnings disregard) for a couple. 45% of unsuccessful UC claimants over the pandemic were ineligible because they/their partner was earning too much money.65 The Child Poverty Action Group concluded that such findings were “clearly hugely problematic when considered alongside women’s financial inequality”.66

42.The design of Universal Credit creates risks for women’s financial independence, which can have severe consequences for women in abusive relationships. These risks have been heightened over the pandemic as other opportunities for economic support have been limited. They now also affect many more households given the rise in claimant numbers.

43.The Department for Work and Pensions must urgently conduct or commission research to develop its understanding of the gendered impact of Universal Credit design, including the wait for the first payment; the single household payment structure; joint eligibility assessment; and the single earnings disregard. We recommend this research be commenced within two months of publication of this Report.

Legacy Benefits

44.Benefits which existed before UC (known as ‘legacy benefits’), which include benefits for disabled people, have not been increased since the start of the pandemic. Many stakeholders called on the Government to apply the increase to legacy benefits.67 There is evidence that more women than men receive legacy benefits and thus the exemption of legacy benefits from the £20 per week is likely to have had a greater impact on women.68

45.Mims Davis MP told us that “It is very difficult to upgrade and support people as quickly. We simply could not do it operationally.” She said those on legacy benefits could check their eligibility to apply for Universal Credit online, or apply for the hardship allowance fund from their local council.69

46.We recommend the Department for Work and Pensions commit to maintaining the increases in support that have been provided during the pandemic until the end of the pandemic, including the £20 increase in standard allowance for Universal Credit.

47.We find it implausible that it is operationally impossible to increase the rates of legacy benefits by the equivalent amount of the increase in Universal Credit. We recommend the Government immediately increase legacy benefit rates by the equivalent amount.

Benefit Conditionality and Job Search Support

48.Many benefit claimants are subject to work-related conditions. Failure to meet these can result in sanctions. Claimant responsibilities to look for work vary by the age of the youngest child for single parents and lead carers.70 The requirement for people receiving Universal Credit to prove that they are looking for work (claimant conditionality) was suspended for 3 months until 1 July 2020. On 29 June, the Secretary of State for Work and Pensions announced that benefits sanctions and conditionality would be reintroduced from 1 July.71

49.Many witnesses expressed concern about the reintroduction of claimant conditionality on working mothers given disruption to childcare availability. For example, Gingerbread had asked the Government not to reimpose conditionality, given many single parents without childcare simply could not look for work.72 While there is Government support available to cover the cost of 30 hours of childcare per week,73 Professor Jill Rubery and Dr Monica Costa Dias highlighted that this is only available to parents who are in work or about to start work (rather than job-seeking) and is usually only available once children have reached the age of three.74

50.As discussed in Chapter 2, traditionally female-dominated sectors have been hit harder during this recession and vacancies in service sector jobs remain depressed. Witnesses argued that this could affect women’s ability to quickly find new forms of employment, especially given increased caring responsibilities.75 In the light of this, Professor Jill Rubery argued that conditionality needed reconsideration and urged a “change in mindset”,76 with targeted support for women including re-training provisions.

51.Mims Davis MP argued that the reintroduction of conditionality was “really important to help understand [claimants], support them and know what they need for the next stage of their career”77 and that it was “right that we looked to reinstate it”.78 While the Minister stated that DWP conducted an Equality Impact Assessment for the reintroduction of conditionality, she said this would not be published and “we concluded that no benefit recipient with a protected characteristic would be adversely affected by the reinstatement of conditionality, because there was no disproportionate negative impact.” She said “sanctions have never been lower” and that DWP would “always look for good cause and any reason that [a claimant] cannot adhere to their claimant commitment.”79

52.Whilst this Report was in preparation, we noted that the Equality Impact Analysis (EIA) had in fact been published as part of a response to a Freedom of Information request in July 2020.80 We found the EIA to be insufficient and not fit for purpose. Under the heading “evidence and analysis”, the analysis of sex as a protected characteristic amounted to tabular data showing Universal Credit caseloads by females and males. Despite those figures showing more ‘benefit units’ with an adult female, the analysis amounts to this statement:

The reinstatement of conditionality will be equally applied to all claimants. We consider these changes will not have a disproportionate impact on the basis of gender.81

53.There is no mention of childcare or any recognition that women continue to bear the burden of this. In a separate section, under “family formation”, the EIA states:

We can expect that many claimants with children will have much altered childcare arrangements and may have difficulty adjusting or making new childcare arrangements. This will be taken into account using existing flexibilities, both in setting reasonable expectations of availability and work search, and including availability for interview and work start. Application of existing easements to switch off work related requirements for additional childcare responsibilities and other situations will continue to be applied where appropriate.82

54.90% of single parents are women.83 There is failure to recognise that as women make up the majority of single parent households, and carry out most of the childcare in two parent families, this policy will inevitably impact women more negatively than men.

55.In discussing specific safeguards for carers who cannot work or search for work due to caring disruptions, Mims Davis MP pointed to the “emergency childcare easement” available when schools and childcare become “inaccessible”.84 The Minister also stressed that work coaches have been “very receptive” to the needs of lead carers and those with clinically extremely vulnerable children.85

56.Appropriate and clear guidance to Jobcentre Plus work coaches is vital, given pre-pandemic research which found that mothers subject to Universal Credit conditionality felt that their caring responsibilities were disregarded. We were unable to find specific guidance to work coaches on emergency childcare easements, beyond the very general guidance in the entirely inadequate Equality Impact Assessment of the decision to reinstate conditionality. We recommend the DWP provide such guidance to us in response to this Report and to work coaches as a matter of urgency.

57.Job vacancies remain depressed and women with caring responsibilities require targeted job search support. Maintaining mothers’ attachment to the labour market and increasing the opportunities to retrain for jobs in viable sectors is critical. DWP must expand and tailor its offer for mothers seeking employment, so that it encompasses retraining and re-skilling for jobs in the most viable sectors. This should be maintained for the duration of the pandemic as a minimum.

Statutory Sick Pay

58.The March 2020 Budget extended Statutory Sick Pay (SSP) to being available from ‘day one’ for people who were ill or self-isolating as a result of covid-19. For other illnesses, SSP is available from the fourth day an eligible worker is off sick. The level for SSP is set at £95.85 per week, payable for 28 weeks. To qualify for SSP, an individual must be classed as an employee and earn at least £120 per week on average. People have been required by law to self-isolate since 28 September, supported by payment of £500 for those on lower incomes who cannot work from home and have lost income as a result.86 However, take-up of these payments has been very low.87

59.Many of those who submitted evidence to the Committee’s umbrella inquiry as well as this sub-inquiry, argued for a change to the eligibility criteria and an increase to the level of SSP.88

60.The Minister, Mims Davis MP, did not agree that there was need for a change. She told us that “statutory sick pay is part of a broader welfare safety net. Those on low incomes who need SSP may qualify for other benefits.”89 However, as discussed above, the wait for the first UC payment is five weeks, and those applying for “New Style” Employment Support Allowance have been advised that their first payment should be made in “around two weeks”.90

61.Mims Davis MP also pointed out that “employers have occupational sick pay policies that can also support people.”91

62.However, research92 and evidence to the inquiry93 has shown that women are less likely to have access to occupational sick pay policies beyond the statutory minimum through their jobs. Professor Jill Rubery cautioned against a reliance on voluntary provision by employers:

I worry that, in a crisis, employers may step away from that kind of support and provision… It would not surprise me to see employers stepping away from providing the sick pay that most of the middle classes in the public sector have got used to.94

Gendered differences in eligibility

63.Research by the WBG shows that women are less likely to qualify for SSP because of “low or intermittent pay, zero-hours contracts and not enough regular hours/earnings due to caring responsibilities”.95 The TUC concludes that women would be the main beneficiaries of removing the qualifying earnings rule for SSP; 70% of those benefiting from the change would be women.96 Dr Duncan Brown argued that “[t]here is just no logic for the lower earnings limit. Clearly, that discriminates heavily against women in being able to claim it.”97 In response to this evidence, Kemi Badenoch MP, Exchequer Secretary to the Treasury, told the Committee:

I have not heard those criticisms. I can find out and ask officials to look into what our response is on that. I do not know of the gendered impact on statutory sick pay. Again, we look at these things mostly in the round.98

64.While changes to the availability for Statutory Sick Pay (SSP) have benefited many, it has also thrown into sharp relief the demographics of those who are not eligible, and for whom the level of SSP provides an inadequate safety net. Women are over-represented in this demographic, and we are concerned that the Treasury seems both unaware and uninterested in the evidence showing this.

65.We urge the Government to conduct a study to examine the adequacy of, and eligibility for, Statutory Sick Pay. Such a study should be published within three months, alongside an equality impact analysis. This should be done alongside our recommendation for all workers on zero-hour contracts to be able to claim SSP, as set out in our Report on Unequal impact? Coronavirus and BAME people.