Without a radical change in policy direction, the financial situation for low-income families is likely to get worse before it gets better

As the Government’s COVID-19 emergency support schemes are tapered away, more help will be needed for struggling families who have lost jobs or taken income drops, says CPAG and the Church of England

Without a radical change in policy direction, the financial situation for low-income families is likely to get worse before it gets better, according to a new report from the Child Poverty Action Group (CPAG) and the Church of England that looks at the impact of coronavirus on low-income families and children

In Poverty in the pandemic, based on a survey of 285 low-income families, CPAG and the Church of England highlight that coronavirus has turned the lives of families with children upside down, with many parents having lost jobs or been furloughed and many schools and childcare facilities having largely been closed, leaving those still in work facing the impossible task of balancing work with childcare and home schooling. These challenges, the report says, have been particularly acute for low-income families.

However, while 8 in 10 hard-up families said they were financially worse off as a result of the pandemic, and almost half have had physical or mental health problems because of coronavirus, the report says the situation is likely to get worse before it gets better.

For example, the winding down of the Coronavirus Job Retention Scheme in October 2020 and rising unemployment will leave many more families reliant on a much less generous social security system than the temporary schemes put in place during lockdown. And further down the line, the planned removal of the £20 uplift to universal credit and working tax credit in April 2021 will make the safety net even less adequate, tipping many more families into, or deeper into, poverty.

As a result, the report calls for a series of changes based on the support that families have said they would value the most at this time, including -

• Increased children’s benefits: child benefit should be increased by at least £10 as the best way to get money to families quickly via existing government infrastructure. £10 should also be added to the universal credit child element and child tax credit, to provide an extra financial boost to thosefamilies on the lowest incomes.
• Expansion of free school meals eligibility: in the short term, free school meals should be provided to all families who are in receipt of universal credit or tax credits. In the long term, the government should introduce universal free school meals for all school-age children, starting with primary school children.
• Abolition of the benefit cap: the benefit cap should be abolished, or at least suspended for the duration of the pandemic. Families affected by the benefit cap are being driven into poverty, with very little way of remedying their situation as working more or moving into cheaper housing - the two ways to escape the cap - are much more difficult as a result of the pandemic.

Commenting on the findings, CPAG Chief Executive Alison Garnham said:

'We all want to protect children and families from the effects of the coronavirus recession and to prevent a growth in poverty following the pandemic. But the support we offer low-income parents just doesn’t meet the additional costs of raising children and there was nothing in the Government’s emergency support schemes to correct this shortfall. Child benefit alone has lost £5 of its value since 2010 because of sub-inflationary uprating and freezes. Re -investing in children’s benefits and widening access to free school meals should be the priorities now to protect family incomes and to support children’s life chances. As the Government’s Covid-19 emergency support schemes are tapered away in the coming months, more help will be needed for struggling families who have lost jobs or taken income drops. Otherwise they will have only more hardship on their horizon.'

For more information, see Poverty in the pandemic: The impact of coronavirus on low-income families and children from the CPAG website.