Working lone parents 'face drastic and growing income shortfalls'

By agency reporter
September 5, 2019

Working lone parents on reasonable pay cannot reach a minimum acceptable living standard – as defined by the public – even if they work full time, new research for Child Poverty Action Group (CPAG) shows.  

The research, The Cost of A Child in 2019, by Loughborough university for CPAG, uncovers drastic and growing income shortfalls for working lone parents whether they earn the so-called  ‘national living wage’ or have median earnings. While anti-lone parent rhetoric may have abated in recent years, CPAG warns that social security policies have created disproportionately stark losses for these families, and left them falling further and further below a living standard that the public considers acceptable.

A combination of the freeze on working age benefits, cuts to tax credits and universal credit, stagnant wages and sharp rises in the cost of some essential foods, public transport, domestic fuel, council tax and childcare, have left all families on the ‘national living wage' short of what they need for a basic, socially acceptable living standard – but single parents have fared worst, the research finds.

In 2019 the overall cost of a child up to age 18 years (including rent and childcare) is £185,000 for lone parents (up 19 per cent since 2012) and £151,000 for couples (up 5.5 per cent since 2012).

Childcare costs, for those requiring childcare, now comprise nearly half of all the costs of a child reported in The Cost of a Child 2019.

The gap between lone parents’ actual income and what they need to meet family needs has grown sharply:  

  • Lone parents working full time for the so-called national living wage (NLW) are 21 per cent (£80 a week) short of what they need – after paying for rent, childcare and council tax – a gap that has more than doubled from 10 per cent since 2012.
  • For those working half-time for the NLW, the income gap has jumped from 12 per cent to 24 per cent since 2012, and is now £92 a week.
  • Even lone parents working full time on median earnings can’t reach a decent minimum living standard, falling £60 a week short: for them the shortfall has risen to 16 per cent from six per cent in 2012. 
  • Lone parents with young children who are not working fall over 40 per cent short of a decent minimum living standard: they have £158 less than they need.

Chief Executive of Child Poverty Action Group Alison Garnham said: “Back in the early noughties politicians declared that the war on lone parents was over. But the evidence suggests that it isn’t.  Lone parents have taken particularly big losses following cuts to universal credit and tax credits and the freeze on family benefits - such that a decent, no-frills living standard is out of reach even on a reasonable wage. That’s a divisive economy, not one which works for everyone.

“In the UK we believe that every family should have a living standard that at least meets people’s needs, but after years of social security cuts, families on the so-called National Living Wage can’t achieve a decent minimum living standard, even if they work full time – and lone parents are suffering the most.   For them, trying to reach a decent minimum living standard is like chasing a moving target. 

“Our new Prime Minister wants to unite the country.  Will he then commit to restoring the value of family benefits for working and non-working households and make sure that they once again rise with inflation?   That would begin to close the income gaps that austerity caused – and is still causing – to the families least able to withstand them.”  

The costs of a child are calculated according to a minimum standard of income that covers the costs of essentials such as food, clothes and shelter as well as other costs necessary to participate in society. It looks at the needs of different family types and is informed by what ordinary members of the public feel is necessary for both couples and lone parents bringing up children. The Cost of a Child in 2019 from Loughborough University’s Donald Hirsch, is the eighth report in an annual series.

Adequacy of children's benefits

The Cost of a Child 2019 finds that with no increase in cash terms in child benefit since 2015, (but a return of inflation since 2016) child benefit now covers less than a sixth of the cost of a child for a lone parent and barely a fifth for a couple.  

For families receiving maximum  child tax credit and child benefit (ie those either not working or working low hours)  the overall benefit package for children now falls 30 per cent short of covering the additional cost associated with having a child for lone parents (up from 22 per cent in 2012). For a child living with both parents, it falls less than five per cent short, less than in 2012, influenced by a more modest assessment of minimum costs made by parents in the wake of years of austerity.  

Adequacy of overall incomes for couples with children

  • Parents in a couple who both work full time for the NLW are 10 per cent (£47 a week) short of a socially acceptable minimum living standard
  • Where one parent works half time and the other full time (both on NLW), the shortfall is 14 per cent (£64 a week).
  • Single-earner couples (on NLW) are 24 per cent (£113 a week) short
  • Like lone parents, couple-families who don’t work are over 40 per cent (£203 a week) short of the budget they need for a socially acceptable minimum lifestyle.

Author of the report Professor Donald Hirsch said: “We have now seen a full decade in which family costs such as childcare, transport and food have seen substantial rises, whereas the incomes of many families have largely stood still. For some families this has hurt more than others, but an unfortunate aspect of this period of austerity is that it has tended to hit hardest among families who face the greatest challenges. Those supported only by a single parent, those with more children to support and those with fewer working hours have tended to see their living standards fall the most.  This is the opposite of the principle that people with the broadest shoulders should take on more of the burden of austerity. A lot of work needs to be done to restore a social security system designed to protect the worst off.”

* Read The Cost of a Child 2019 here

* Child Poverty Action Group https://cpag.org.uk/

[Ekk/6]

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.