Lone parents face the biggest financial shock waves due to coronavirus. In April alone, an additional 216,000 single parent families were found to be living on extremely low incomes, with less than £500 to see them through the month, according to Turn2us.
In a just and compassionate society, our social security system should anchor people when the financial impacts of coronavirus crash down upon them. Unfortunately for many, the help on offer falls short.
The benefit cap is a limit on the total amount of benefit you can get each year. It currently affects 79,000 families, and is set to impact many of the 1.8 million new Universal Credit claimants too. This means they will not receive extra money from the Government’s cash injections to Universal Credit that are intended to help people in poverty stay afloat during the outbreak.
The benefit cap
The benefit cap is set at £20,000 for families (with children) living outside of London and £23,000 a year for those in London.
The families most likely to be affected by the cap live in high-rent areas and typically have two or more children. On average, they lose out on between £48 and £53 a week because of the cap - money they cannot afford to lose. Of those that replied to CAP’s recent Facebook poll, more than half (55%) of people affected by the benefit cap said it meant that their family always went without.*
Lone parents going under
Following a relationship breakdown, Megan**, contacted CAP for help with debt. Now a lone parent to her three children, aged 7, 9 and 17, she relies on Universal Credit to support her family. She is entitled to £1,893 a month, but her payments are reduced by £604 because of the benefit cap and Local Housing Allowance limits.
In April, when the Government increased Universal Credit and Local Housing Allowance limits, it promised an extra £203 a month for the family. Yet the cap means that they see none of this, leaving the family of four (after paying their rent) just £358 a month to live on.
Seven in ten households affected by the benefit cap are headed by lone parents like Megan.
Last month, one such parent told the cross-party group of MPs who scrutinise the work of the Department of Work and Pensions that the benefit cap meant she struggled to pay basic bills. She said “My children are my priority. If that means I don't eat, I won't.”
Breakdown of social security
Economists refer to social security benefits as ‘automatic stabilisers’ - payments that kick in to steady households and the economy when storms hit. The reality is that the benefit cap stops lone parent families receiving all the vital support they need.
The cap was brought in to incentivise people to find paid work or move to cheaper housing, yet in a recent blog, the Institute for Fiscal Studies highlighted that there is little evidence that the policy is successful in economically stable times. At a time like we are currently facing, finding work or moving home is even more difficult.
CAP is calling on the Government to suspend the benefits cap during the outbreak, in order to help households who are already pushed to the brink. We joined with Shelter and other anti-poverty charities to send this message to the Chancellor. The government needs to know that people across the UK want to see more support for families living in poverty during coronavirus.
Your voice can make a difference, email your MP here.
*There were 40 respondents to the poll which ran on CAP’s Facebook page 10 May 2020.
**Name has been changed.