The Universal Credit small print that could hit part-time working mums

Working is no longer enough to receive in-work benefits. Universal Credit claimants will have to show they're angling for a pay rise. 

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Imagine the kind of hardworking, just-about-managing, two parent family the Daily Mail loves. Like many other mothers in a country where childcare is expensive, the woman in the couple works part-time. Although her husband is working, because it’s low paid work, they also receive tax credits. Apart from receiving this top up, they have hardly any interaction with the welfare state.

These are the kinds of families that will find themselves affected by Universal Credit.

The controversial new benefit, which is being rolled out across the country, is replacing not just unemployment benefits, but in-work benefits like tax credits and housing benefit. But it comes with some changes as well. 

One of these affects people already in work. Under Universal Credit, anyone earning beneath a certain threshold will be required to show that they are trying to boost their income. In other words, if they can’t show the Department for Work and Pensions that they are looking for extra hours, or a better-paid job, they could end up not just low paid, but also losing their benefits as well. 

In-work conditionality applies to everyone, although single parents in particularly are likely to find it hard to comply, since they have to juggle hours around their childcare responsibilities. But it will also affect second earners – often part-time working mums. 

“It’s a big shift in the role of the state,” says David Finch, a senior economic analyst at the Resolution Foundation. The threshold is defined as 35 hours at minimum wage (some exceptions apply for families with very young or disabled children). Although couples can combine their hours and pay, for those who still don’t meet the threshold, it will mean a pressure on second earners that hasn’t been felt before. They will be expected to attend Jobcentre meetings, and could receive sanctions if judged not to be trying hard enough. 

Those part-time earners are also likely to be women. A 2012 report by the Resolution Foundation estimated that 1.2 million people will be affected by the in-work conditionality rules. Roughly 90 per cent of single parents are women, and 41 per cent of women work part time, compared to 12 per cent of men. 

The problem is, as MPs on the Work and Pensions select committee noted back in May 2016, the vast majority of claimants working 30 hours a week already want to increase their income or hours. The committee concluded: “There is strong evidence that their barriers to earning more tend to be structural or due to personal circumstances, rather than motivational.”

“There is only so much you can do through asking your employer for extra hours,” says Finch. “Then you could be in the position of having to apply for an additional job.” Of course, the chances of finding another job (and balancing it with childcare) vary hugely depending on where the claimant lives. The unemployment rate in the North East of England, for example, is almost twice that of the South East.

This may explain why, so far, the DWP seems wary of imposing sanctions on working mums who just can’t get a pay rise, and why, too, Jobcentres are given some discretion over how the threshold is applied. So far, there has been little use of sanctions. 

However, Finch points out that without more guidance or training for Jobcentre staff, discretion itself could lead to unfairness.  “You could have two people with similar circumstances, but who find themselves with different work requirements.”

If the government was offering to give low-paid part-timers the career advice they need to progress in careers, or it was stimulating the economy in a way that opened up new jobs, no doubt many would welcome in-work conditionality. But instead, the rule seems likely to just remind the working mums of the world that they are not good enough, at least in the eyes of the DWP. Another reason to stop the roll out of Universal Credit.

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.