Money matters in low moderate income families and the gender implications of uk welfare reform

DEPARTMENT OF SOCIAL POLICY AND INTERVENTION

Money matters in low/moderate
income families and the gender
implications of UK welfare reform

Fran Bennett
Senior Research Fellow, Department of Social Policy
and Intervention, University of Oxford

Sirin Sung,
University Lecturer, Queens University Belfast

26-27 May 2011, Qualitative Research For Policy Making

May 26, 2011

Outline

Welfare reform in the UK: proposals for universal credit and
potential gender issues

Equality impact assessments of policy proposals

Gender implications for welfare reform of findings from
qualitative research on low/moderate income couples/families

Discussion: reflections on policy influencing

Conclusions:
- value of qualitative research for policy on welfare reform;
- essential components of gender analysis of welfare reform

Presentation title, edit in May 26, 2011
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Welfare reform in the UK: proposals for
universal credit
Context: focus on ‘welfare to work’, increased means testing

Recent history:
- benefit simplification seen as key, including ‘single working
age benefit’ (proposed by think tanks + Labour government)
- activation of partners + joint claims for jobseeker’s allowance

White Paper: Universal Credit: Welfare that Works (2010) +
Welfare Reform Bill: universal (sic) credit phased in from
2013; abolishes distinction in/out of work; ‘all work rewarded’

Means-tested, bringing together benefits in and out of work
and housing benefit etc. (not non-means-tested benefits)

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Potential gender issues in relation to
universal credit
Joint claims; + (as now) joint assessment of income & assets;
both partners to fulfil (work-related) conditions if appropriate

Focus on getting one person in household into paid work: as
now, couple disregard, not individual; many ‘2nd earners’’
incentives worse; government not concerned about 2nd earners
giving up work, but sees this as improving work/life balance

Couples choose which partner is payee – payment not split
(eg child + childcare elements to main carer) as now

Payment likely to be monthly (not weekly/fortnightly, as now)
and single taper (withdrawal rate) applied as income rises

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Equality impact assessments: current
position in UK
Government must show due regard, when developing new
policies/processes, to their impact on race, disability and
gender; Equality Act 2010 (April 2011) adds new categories

Processes should be in place to help ensure that :
- strategies/policies/services are free from discrimination;
- departments comply with equalities legislation;
- due regard is given to equality in decision making etc.; + -
opportunities for promoting equality are identified.

Equality Impact Assessments: show impact on protected
groups (including women) of proposed policy changes, to
ensure that policies do what is intended and for everybody

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Qualitative research on low/moderate
income couples
Within Household Inequalities and Public Policy research:
part of Gender Equality Network (www.genet.ac.uk), funded by
Economic and Social Research Council

Aim: to take account of gender inequalities within household in
assessing impacts of welfare reforms and associated policies

Qualitative research: semi-structured interviews (with men
and women separately) in low/moderate income couples in GB

Relevant findings: loyalty to coupledom, but women more
aware of autonomy issues; women often responsible for spend-
ing on children + day to day items, managing family budget etc.

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Findings: importance of independent
income
Togetherness: ‘all in one pot’ was catchphrase, with both men
and women talking about their ‘team’, ‘no yours and mine’ etc.

BUT ‘choice’ exercised by couple is gendered choice – both
may believe in togetherness, but joint decisions can still have
unequal impact (couples’ choice is not same as individuals’)

And receipt of independent income means someone is more
likely to have a say/be able to maintain separate finances/not
have to ask for money/not have to justify personal spending

Joint accounts common, but women were more likely to have
individual account (with benefits/tax credits often paid into it)

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‘I think you’ve got to have a little bit of your own … I wouldn’t
say security … but I’ve never been used to being totally hand in
hand with somebody with finances’ (Case 27, woman)

‘If I wasn’t [making that contribution via wages] then I’d be
dependent on him. I don’t like being dependent on people.
Although [my wages] are, like, family money, they’re like, my
wages.’ (Case 1, woman)

‘I used to [justify my personal spending], but I think not now I’m
earning my own money. Because he was the main
breadwinner. I suppose I felt I had to ask for money if I wanted
it for my clothes and things.’ (Case 18, woman)

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Evidence from other qualitative
research
Recent study of 30 BME women in low-income families in
north-east England found that some women had so little access
to income that their husbands were in control of virtually all
aspects of their lives (Warburton Brown, 2011)

Even couples with joint account, described as having financial
equality, turned out to be less equal on further questioning –
but those saying they had more ‘say’ had own earnings

Independent income can give more ‘say’ (Goode et al, 1998) –
and this can be from non-means-tested benefit as well

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Gender implications for welfare reform

Importance of access to independent income (wage/benefit)
which is not dependent on presence/activities of partner

But Institute for Fiscal Studies confirms ‘2nd earners’ in many
couples to face much higher losses from each £ than now
under universal credit

Help with childcare costs: unchanged total spending, despite
extension to those working under 16 hours – possibility of
earning likely to be even more compromised for ‘2nd earners’

Child benefit and carer’s allowance continuing outside
universal credit (at least for now)

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Findings: responsibility for spending
and managing
Continuity of traditional gendered patterns in our sample
(largely long-standing couples)

Men often responsible for monthly bills, women for more
frequent items (eg weekly shopping) – including in some
cases daily pocket money for man

This could change with frequency of pay – but in one example,
traditional patterns were so strong couple swopped wages

In most cases, women were more responsible for ensuring
children’s needs met

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‘I’m bills, she’s food etc.’ (Case 17, man). ‘I am mostly respons-
ible for, like, the food shopping and household things, and [he]
deals with rent, bills, like electric, gas and that sort of thing.’
(Case 17, woman)

‘My wages go into [her] bank and [her] wages go into my bank
… the simple reason being because [she] is paid monthly and
that pays the bills, that stops in the bank and pays all the direct
debits. I get paid weekly and [she] does the shopping, and we
find it works a lot better like that.’ (Case 13, man)

[Who had main responsibility for spending on children?]: ‘Me …
Me I would think really … I think because the mother tends to
be a bit more with it …’ (Case 9, woman)
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Evidence from other qualitative
research
Women are ‘shock absorbers’ of poverty (Lister, in WBG, 2006)

Women tend to manage household budget in low-income
families (source of stress, not power) (Goode et al, 1998)

Budgeting can involve ‘juggling’ payments and bills (IPPR)

Women responsible for ensuring children’s needs met
(Warburton Brown, 2011); Rake and Jayalatika, 2002)

Women also more likely to be responsible for managing
household debts (research cited in WBG, 2006)

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Gender implications for welfare reform

Daily/weekly items are easier to cut with financial pressures, so
monthly payment of universal credit would have more impact
on women

Income likely to change more rapidly from month to month (+
more localised discretionary extras): harder to budget

Payment all in one gives less space for juggling budget

Payment all in one gives financial power to one partner

Payment not labelled as money for children: less likely to be
spent on them? (with consequences for women)

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Discussion: reflections on policy
influencing
Involvement to date has included:

- Assistance with preliminary gender assessment of consultation
document on welfare reform (by Janet Veitch, for Oxfam)

- Help with evidence for Fawcett Society judicial review of gov-
ernment for not doing gender impact assessment of Budget

- Women’s Budget Group: briefings, meetings and seminar for
civil servants; evidence to Public Bill Committee

- Written evidence to Work and Pensions Select Committee

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Obstacles to influencing:

- government had clear idea of objectives and favoured system

- financial constraints (government response to credit crunch etc)

- administrative imperative – but failure to learn from experience
of previous systems (e.g. importance of financial security)

- officials’ lack of knowledge of lives of low-income families

- our research not framed around policy makers’ concerns/plans
+ couples interviewed not matching relevant demographic

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Assumptions apparently being made in policy making:

- ‘you can’t (and shouldn’t) affect how families deal with money’
- but research shows who gets income can influence how used

- ‘different households budget and handle their finances in
different ways’; but research shows common gendered
patterns in doing so - and policy already intervenes in this

- ‘joint accounts mean it doesn’t matter who gets the income’
- symbol of togetherness, yes; but don’t guarantee equal access

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Despite danger of undermining government’s own aims:

Worse incentives for ‘2nd earners’ could work against:
- aims of individualised conditionality for partners
- government support for shared parenting
- maternity provisions helping women with rights to return
- reduction of workless households and tackling child poverty in
the longer term (e.g. if couples with only one earner separate)

- ‘All or nothing’ universal credit may work against goal of
encouraging committed couples (because of greater risk)
- (eg) for virtually all women in one small study, ‘the security of
some financial independence was described ... as providing the
necessary security for the relationship to flourish’ (Lewis, 2006)
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Conclusions: value of qualitative
research
Government proposals on universal credit have been much
influenced by (particular form of) economic modelling;
participation tax rates, incentives, dynamic effects seen as key

But many other factors are important in real lives:
- e.g. how systems work in ‘real time’; how households operate
as financial units; and how money has social meaning:
‘... the significance of the source of income, its recipient, and
the way it is “labelled”, for shaping both perceptions and
allocation of financial resources’ (Goode et al, 1999: 11)

Models may assume economic rationality + equal sharing etc -
qualitative research explores significant roles, relationships

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Proposals for universal credit also very influenced by
ideology (unitary view of family + equal sharing/male
breadwinner household): uses out-of-date model of households
and concern about ‘dependency’ on state, not within families

But how best to deliver welfare to all within household and take
account of social meanings of money?

Government has undertaken to monitor distribution of
income within household under universal credit

Key: how to combine qualitative with other forms of research?
(eg to untangle necessary simplifications of economic models?)

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Conclusions: essential components of
gender analysis of welfare reform
Gender impact assessment of Welfare Reform Bill examined
effects on single men and women - and on couples

We argue proposals should be judged not only on number of
men and women affected and amounts involved, but also:
- make-up + labelling of payments changing balance of resour-
ces between women/men + impact on roles and relationships
- effects on autonomy and financial security of men and
women; on their caring responsibilities; and on inequalities
within the household, at point of change and over lifetime

These principles were cited by government in equality impact
assessment of White Paper - but not fully taken on board

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Money matters in low moderate income families and the gender implications of uk welfare reform

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