Single parents to be hit hardest by welfare shake-up
Neil Puffett
Wednesday, January 12, 2011
Single parents will be among the hardest hit through the introduction of a universal credit as part of a shake-up to the welfare system, a report by the Institute for Fiscal Studies has found.
The report predicts that:
- Universal credit will benefit poorer families more than richer ones, on average. The bottom six-tenths of the income distribution will gain on average, while the richest four-tenths will lose out slightly in the long-run
- On average, couples with children will gain more than couples without children, who will in turn gain more than single adults without children
- 2.5 million families will gain, and, in the long-run, 1.4 million families will lose and 2.5 million families will see no change in benefit and tax credit entitlement
Mike Brewer, deputy director of the Institute for Fiscal Studies and an author of the report, said although the universal credit has the potential to simplify the complicated overlap between benefits and tax credits, the study illustrates the constraints all governments face when contemplating radical welfare reform.
He added: "Work incentives will be strengthened for some but weakened for others, and the reform will lead to both winners and losers in the long run."
Fiona Weir, chief executive of Gingerbread, said: "We already know that single parents will be worst hit by government spending cuts, and it is a bitter blow to learn that they will also be the biggest losers from universal credit.
"The government should be doing all it can to support single-parent families who are doing the right thing by working harder to improve their family’s circumstances."
Alison Garnham, chief executive of the Child Poverty Action Group, added: "Children in lone-parent households already face one of the highest risks of poverty and it's wrong for these children to be hit by a systemic penalty in the universal credit."
The universal credit is the lynchpin of government plans to simplify the welfare system and strengthen incentives to work.
Further details will be outlined later this month in the Welfare Reform Bill.