Work allowances for families with children
This analysis looks at the impact on poverty of increasing the work allowances in Universal Credit back to their original level for families with children.
This provides a breakdown of the total number of individuals that would benefit from the change, how many of the beneficiaries are in poverty, and how many would be able to escape poverty as a result. It looks at the impact of the change next year and in the last year of this parliament.
| 2019/20 | 2022/23 | |
|---|---|---|
| Cost* | £1.98bn | £2.04bn |
| Change in poverty total for people in families with children** | -300,000 | -200,000 |
| Change in child poverty** | -100,000 | -100,000 |
| Number of people in families with children who benefit | 9,600,000 | 9,200,000 |
| Number of people in families with children who benefit but remain in poverty | 4,600,000 | 4,700,000 |
* costings figures rounded to nearest £10million
** poverty figures rounded to nearest 100,000
Methods
Analysis was completed using version v01_57 of the IPPR Tax-Benefit Model which takes a sample of 19,380 households (source: FRS 2016/17) and measures, through micro-simulation, the impact that specific policy changes have on household income and poverty rates, and the associated national costs or savings of the policy change.
Increased work allowances for families with children
The work allowance sets the maximum a family (Benefit Unit) can earn before the amount of benefit they receive starts to be cut. For this analysis, the work allowances for families with children were increased to their 2015/16 levels (before the reduction and freeze). This means families with children can earn more before their benefit payments are reduced. The result is that families with children, who receive benefits, will receive their full benefit for longer, and a higher number of families with children will be eligible for some benefit.
Links
Department of Work and Pensions. Family Resources Survey [Online] Available at: https://www.gov.uk/government/collections/family-resources-survey--2 [Accessed 9 September 2018]
Universal Credit web content. York: Joseph Rowntree Foundation [Online] Available at: https://www.jrf.org.uk/income-benefits/universal-credit [Accessed 6 September 2018]
In-work poverty content. York: Joseph Rowntree Foundation [Online] Available at: https://www.jrf.org.uk/work/in-work-poverty [Accessed 6 September 2018]
This briefing is part of the child poverty topic.
Find out more about our work in this area.