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Families left without enough money for basic needs after welfare reforms

News | Published:

WELFARE reforms introduced last year have left more than 100 families living on an income that means they will struggle to avoid an intolerable level of poverty, Employment & Social Security president Michelle Le Clerc said.

Deputy Michelle Le Clerc. (26023037)

The information was revealed as ESS announced its plans to increase non-contributory benefits by 1.9% for 2020, in line with inflation.

These cover benefits that are funded by taxation, including income support, family allowance, severe disability benefit and carer’s allowance. These benefits are routinely increased in line with RPIX each year.

The June 2019 RPIX figure was 1.9%. A committee spokesperson said they were proposing that all non-contributory benefits are uprated by this amount for 2020, with the exception of family allowance.

The exception was due to the committee reviewing whether some of the family allowance budget could be redirected to fund services specifically aimed at children. This responds to an outstanding resolution of the States.

In a bid to tackle the problem, the committee is proposing to increase the income support benefit limitation from £750 to £850 per week.

'In most cases the combination of net earnings and income support top-up is enough to meet a household’s requirements,' a committee spokesperson said. 'However if their needs are in excess of £750 per week, their income will be capped at that amount. There are 130 families, including over 470 children, who do not have enough income to meet their weekly needs, as they are restricted by the current benefit limitation cap. This is partly due to the amalgamation of the former supplementary benefit system and rent rebate scheme, which means that social housing tenants are now charged the full standard weekly rent, and therefore require more income to meet their needs. With larger properties, where the rent is higher, it is inevitable that more families are reaching the cap.'

Employment & Social Security president Michelle Le Clerc said they knew when they introduced welfare reforms in 2018 that there would be some families outside the benefit limitation cap.

'We will do everything we can to reduce this number as we believe it cannot be right that families are forced to live on an income that is below what the States considers to be the minimum to avoid an intolerable level of poverty,' she said.

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'Increasing the benefit limitation to £850 will ensure that at least families with two or three children will not be limited by the cap, but there will still be 25 families with four or more children affected by this limitation.'

The committee’s proposals are in line with the policy direction set by the States through the Policy & Resource Plan, and other work streams, such as those resulting from the debate on the In-work Poverty Review.

The policy letter will be debated at the same meeting as the States’ budget in November.

Juliet Pouteaux

By Juliet Pouteaux
News reporter

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