An extra £420m on benefits would be money well spent

Stormont should spend almost £150m per year topping up social security, according to a new report.

For the next three years, a wide package of targeted measures should be put in place to help struggling people and families deal with the skyrocketing cost of living.

Welfare payments come from the Department of Work and Pensions (DWP) at Westminster but Northern Ireland is free to supplement these payments if it wants to – and, in recent years, that has been policy. A year ago, the Department for Communities commissioned an independent panel to investigate how welfare mitigations could be changed or extended.

The panel’s report was released this week, and its recommendations include:

• Offsetting DWP’s two-child limit on social security payments including Universal Credit, Child Tax Credit and Housing Benefit.
• Introducing a Better Start Grant payment for low-income families “entailing a pregnancy and baby payment of £606 on the birth of a first child replacing the Sure Start Maternity Grant of £500 and a payment of £303 for maternity needs of subsequently children, an early learning payment of £252 when aged between two years and three and a half years on starting nursery, a school age payment of £252 when starting primary school, a school transition payment of £252 at aged 11 and a similar staying on payment at aged 16 for those remaining in education or training.”
• More support for carers, including “carer recognition payments” to supplement the existing carers allowance, and an increase in the earnings allowance before carers allowance is withdrawn.
• A cost-of-work allowance providing an annual lump sum payment to working claimants whose earnings fall within a specific threshold (with those set at three levels – one for households without dependent children, a higher rate for households with dependent children, and an additional payment for those on certain disability support).

The report also outlines a suite of other recommended supports including winter fuel payments, interim payments to alleviate the standard five-week waiting period for any first claim, targeted support for some people living in the private rental sector, and copperbottomed financial support for the independent advice sector.

Child poverty

In total, the independent panel believes Stormont should spend over £420m in the next three years on these new measures, beginning with £132.6m this financial year, rising to £149.5m in 2024-25.

Most of that money would go to offsetting the two-child policy (£138.4m over three years), carers recognition payments (£73.7m) and the cost of work allowance (£105m).

The panel described offsetting the two-child limit as the “centrepiece of our recommendations”, adding that: “As a society, we would never contemplate restricting health care or schooling to only the first two children yet currently do so through certain social security benefits. This cannot be right.

“Our analysis shows that the two-child limit bears particularly hardest on the poorest families and, unchecked, would lead to a further damaging rise in child poverty. By preventing this, our proposals will ensure that thousands of Northern Irish children are shielded from the most damaging impacts of this policy.”

If recent work by local organisations is anything to go by, this would be a crucial move.

Save the Children

A fortnight ago, Save the Children Northern Ireland released a new report on social security and the cost of living.

“It’s hard to survive...” Families’ experiences of the welfare system and the cost of living in Northern Ireland centred on focused discussions with different families around NI to get “a snapshot of the 1 in 2 families with children [in NI] that use the welfare system.”

The organisation says: “One of our key priorities is to reduce the level of child poverty in Northern Ireland. We know that the social security system is a key mechanism in giving families the income they need to give their children the best start in life.”

The report covered a lot of ground but Save the Children identified four “overarching” themes from its discussions with local families about the current state of social security:

It isn’t enough - Families’ expenditure is increasing across almost all fronts, while their incomes have been hit by inflation and years of welfare cuts. Payments need to be higher.

One size (doesn’t) fit all - An impersonal, inflexible, and complicated system contributed to delays, mistakes, and miscalculations that had a knock-on effect on families’ finances.

Harming rather than helping? - Many parents also felt that the system was complicated and exacerbated families’ already challenging financial circumstances, rather than helping them meet their needs.

Passing responsibility – Overall the discussions beg the question of whether the social security system is fulfilling its original aims of providing support to people who need it – and instead is hard to navigate, unsympathetic and reluctant to offer the help it is supposed to guarantee.

In particular, Save the Children identified the two-child limit as an issue that needs to be addressed.

“The stress and hardship that rules like the two-child limit and the five-week wait create for some families are an effect of the rules working as they were intended to. The UK government has responsibility for the welfare system as a whole, but the Northern Ireland Executive also has a responsibility to ensure that the system responds to the circumstances of children here.

“In Northern Ireland, comparatively lower wages, higher unemployment, and higher levels of economic inactivity compared to elsewhere in the UK, and the legacy of the conflict on both physical and mental health, mean that children here are deeply exposed to the stress and hardship that some of the rules in the system create.

“The Executive can do far more to ensure that all children are benefiting from the system in Northern Ireland.”

Save the Children’s report sounds like a rallying cry, aimed at Stormont, asking for more and better support. In that sense, it is of a piece with the independent panel’s recommendations to DfC. And Save the Children is not the only organisation making these points.

Parenting NI

Last week was Parenting Week and, coinciding with that, Parenting NI published results from a recent survey on the cost of living.

The Parent Mental Health, Wellbeing and Cost of Living report found that: “Two in three parents (67%) believed that money was one of their top three biggest challenges as a parent in 2022. This has risen from 30% in 2021.

“Mental health (59%) and technology (48%) were the next biggest challenges for parent. Money and mental health are the only categories that have seen a rise since 2021.”

Respondents were asked to rank their top three concerns from the past six months and the four most common responses all involved financial worries: food prices, home energy costs, fuel and travel expenses, and housing costs.

Almost 70% of respondents said their household’s financial situation had deteriorated over the past six months, 42% said there was at least one point when they were unable to provide something for their children because they couldn’t afford it, while 99% said they were concerned about the impact inflation would have on their family.

“Overwhelmingly, reduction in utility bills was the top government intervention that parents said would help their financial situation the most with 51% choosing this option. This was followed by affordable childcare (19%) and direct payment from government (12%). 8% of parents answered with 'Other' and were given space to elaborate on their response. The most common answer in this section was ‘all of the above’.”

Future

The good news for parents is that there is a willingness at Stormont to make these sorts of moves.

Communities Minister Deirdre Hargey welcomed the publication of the independent panel’s report, saying: “I am particularly pleased the independent panel has recognised the importance of providing financial support for children through a range of measures including offsetting the two-child policy.

The bad news is that, according to the minister, significant changes to welfare mitigations will require Executive approval and, right now, there is no sign of an Executive coming together.