William Eichler 13 May 2019

Welfare reforms put pressure on struggling families, report warns

A new study looking at the impact of welfare reforms on child vulnerability has found that a quarter of children in low income families are unable to make ends meet.

The Children’s Commission found that Universal Credit ‘broadly benefits’ families with children, with 56% of households better off by £172 per month.

However, the commissioner warned that the Government’s flagship welfare reform will also leave 40% worse off as they lose £181 per month on average.

The commissioner’s report, entitled ‘The impact of welfare reform on child vulnerability’, also found that the five week wait for the first UC payment would push 70% of families currently facing a cash surplus into cash shortfall.

Around 73% of families with savings would see them completely exhausted at some point during those first five weeks.

The UC advance payment provides a short-term boost to cashflow, according to the report. However, it also increases the percentage of households who would face a cash shortfall from 11.6% under UC, to 18.9% once the advance payment is deducted from UC awards.

Under the two child limit, 32.1% of children living in a cash shortfall would find their families in surplus were the policy removed. The policy is placing 15.6% of children who are already facing a cash shortfall further at risk.

The cumulative impact of welfare reforms leads to 48% of households losing £3,441 per annum on average, the commissioner found.

When the effects of Universal Credit, the two child limit and the Benefit Cap are combined, 25% of children in low income families would be unable to make ends meet, doubling the number from 13% if these reforms were not in place.

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