UK welfare policy: impact on families with children

4. Emerging short-term evidence of the impact of welfare policies

The main analysis of this paper is based on hypothetical case studies, which is the only way to show the full impact of welfare policies by 2020/21. This is because of the gradual nature of the rollout of these policies, some of which have only been in force since April 2017 (such as the 2 Child Limit) or only affect new claimants. As such the impact of these policies on real case studies is somewhat limited.

As part of preparation for this report, the Scottish Government approached the Child Poverty Action Group ( CPAG) to gain insight into the impacts of policies on real families in Scotland being affected by some of the reforms outlined in section 2.2. CPAG provided the following examples, taken from case studies submitted to CPAG in Scotland's Early Warning System ^[13] by frontline workers who have direct contact with families affected by welfare reform.

4.1 The impact of the lower Benefit Cap

The lower Benefit Cap was introduced from November 2016, and as of February 2017 there were 3,705 households affected by the benefit cap losing an average of £57 per week ^[14] . The following cases indicate the real impact that the Benefit Cap is having on the quality of life for children in these families.

• Case A – A lone parent with four children

  A lone parent with four children under the age of 10 has had her housing benefit reduced from £96.88 to 50p per week following the implementation of the lower Benefit Cap. She has been awarded a Discretionary Housing Payment but only until the end of the financial year after which she does not know if she will need to make a new application. Client already struggles to buy fresh and healthy food for her children and has had to cancel her internet subscription which has limited the children's access to information for school projects.

• Case B – A couple with three children

  A family containing two adults and three children are affected by the Benefit Cap. They live in a rural area and struggle with a higher cost of living, as the cost of basics are already more expensive including heating and food. The family run a car to allow the family to get about. The family are quite isolated in the area and the house is very poor. The children attend clubs to give them a social life and make friends. The Benefit Cap means that the children either need to stop attending the clubs or the rent will not get paid.

4.2 The impact of the 2 child limit (Tax Credits and Universal Credit)

The 2 child limit in Tax Credits and Universal Credit has been in place since April 2017. Whilst very few families are currently affected ^[15] , as the policy applies to new births and new UC claims, CPAG are already receiving some cases where the limit has been applied.

• Case C – A couple living with 2 children and expecting a third child

  A client has two children and is pregnant with her third child. She wanted to start a family with her new partner and believed that she would be exempt from the two child limit because her first child was born when she was 15 and would therefore be classed as statutory rape. However the exemption for children conceived without consent does not apply to the child that is about to be born and therefore the family will be subject to the two child limit.

• Case D – A kinship carer with 2 children and looking after a further 2 children

  A kinship carer with two children of her own provides kinship care for one child and has recently taken on kinship care of another child, who was born after 6 April 2017. This situation is not covered by the two child limit exemption and therefore child tax credit is not payable for the fourth child on the household.