This blog is based on an article in Social Policy and Society. Click here to access the article.
The Scotland Act 2016 devolved powers over 11 social security benefits, including Carer’s Allowance (CA) which provided Scotland with an opportunity, albeit limited, to differentiate itself in terms of welfare policy progressivity. The Carers (Scotland) Act 2016 set out the strategy for supporting those who limit their employment or educational enrolment due to the responsibility of caring for an adult or child with a health condition.
Using a microsimulation of Scottish data from the Family Resource Survey we explore the impact on income and poverty rates for carer households of raising the level of CA by various amounts and by changing the eligibility criteria. We conclude that while the Scottish Government’s ambitions are too modest to match their progressive rhetoric, or to change the overall income inequality landscape, the reforms do make a substantial difference to the lived experience of the carers in poverty and, by extension, to recipients of care.
While Scotland voted against independence in September 2014, there are still strong pressures for Scottish social policy to diverge from the rest of the UK. Scotland has long claimed to be ‘different’. Scottish parties have prominently employed the rhetoric of social justice and the Scottish Government stated its wish to radically depart from a social security system which has failed to recognise the ‘priceless’ contribution carers make to society.
An Expert Working Group on Welfare described the level of CA as an ‘unacceptable anomaly,’ recommending that the weekly rate be raised to the level of JSA for those aged 25 and over. When the Scottish Executive pledged to raise CA in line with JSA, with the aim of providing some support and recognition, it was estimated that it would give carers an additional £600 a year. The main Scottish political parties all supported the increase, although the Greens proposed a larger rise.
Care work and the ‘care economy’ are major topics of national and global policy concern with talk of a ‘care crisis’ relating to both the implications of aging populations alongside increasing female labour market participation and the concomitant retrenchment of welfare states. Social care is also under increasing pressure. Without major investment in social care, much care work will have to be provided informally.
A carer’s benefit was instituted in 1976, but is only now approaching a level of parity with benefits provided to people unemployed but actively seeking work. Society currently relies upon undervalued and under-supported informal care to prop up an increasingly austere yet in-demand social security system. Many carers are near breaking point, lacking ‘sufficient and affordable care services to back families up and enable them to have a life of their own alongside caring’. Among those providing high levels of care, approximately half reported that they are struggling to make ends meet.
Official estimates suggest that there are 759,000 adult carers (aged 16 or over) in Scotland and a further 29,000 carers under the age of 16. Only 116,081 unpaid Scottish carers are entitled to CA, while only 71,585 people currently receive the benefit. It is thought that many providing informal care fall foul of ‘overlapping benefits’ rules under which a person may have an ‘underlying entitlement’ to CA but cannot receive more than one income-replacement benefit at a time, which mostly affects pensioners. Of 36,850 people aged 65 and over who have an entitlement to CA only 960 are receiving the benefit.
While CA is a non-means tested benefit, to be eligible individuals must currently meet several criteria and must spend at least 35 hours a week caring for another person, must not be in full-time education and cannot earn more than £116 a week after tax and certain expenses. In terms of the opportunity for divergence from UK policy our microsimulation model examines six reform scenarios using Scotland only data drawn from the Family Resources Survey.
The Scottish Government committed in 2016 to increasing the CA in line with JSA. However the single adult JSA has both been frozen from 2016-2020 and falls short- at around 54%- of the government’s poverty line for single adults, and 36% of the ‘Minimum Income standard’ as estimated by the Joseph Rowntree Foundation. For these reasons we proposed increases of £20 and £40 a week with the latter in line with the CA proposal made by the Scottish Green Party.
We also widened eligibility to include pensioners with significant caring duties and made allowances for Income support (IS); non-contributory Employment and Support Allowance (ESA) and housing benefit (HB). Merely raising CA in line with JSA would see little real change to the levels of poverty among the poorest households providing care if there are not also attendant changes to overlapping benefits. Even uplifting the rate of CA by £40 a week would have a relatively low impact on the overall household poverty rate. More substantial inroads into the poverty rate would involve the £40 uplift ‘plus’ scenario which includes corresponding increases in premiums associated with IS, ESA and HB.
The reason that both the distributional impact and the changes in the poverty rate of the reforms across the whole population is small is because only a relatively small proportion of families receive CA. However, the distributional impact of the proposed changes for those who are in receipt of CA and for those in receipt of both CA and CB show much higher average gains. In particular, the results indicated a significant impact on the numbers in poverty when the focus is solely on those receiving CA and those receiving both CA and Child Benefit.
We suggest that the opportunities for social security changes should not be judged against macro distributional data alone but against the impact for the actual and potential recipients of well-targeted policies – the poverty suffered by segments of society providing informal care. In honouring their pledge to improve support for carers, their quality of life and in beginning to rectify an historical undervaluing of informal care, the Scottish Government might consider aiming the changes in CA at those most in need of support.
About the authors
Sara Cantillon is Professor of Gender and Economics at Glasgow Caledonian University.
Eleanor Kirk is Research Associate at the University of Glasgow.