Life set to get harder for families with care responsibilities, struggling to make ends meet

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1st October 2015

Care-giving parents, whether it’s mum or dad at home busy with the daily work of looking after children, will find it a lot more difficult from next year when predicted cuts in tax credits start changing the shape of family life  and childhood as we know it – and not for the better.

But it’s not only about the care-giving parent,  it’s also about the wellbeing of the entire family,  including whoever is bringing in the daily bread.   

Mothers and fathers up and down the country share work and care responsibilities between them in whatever way suits the family best.  But more time poverty, less support for family life, a punitive family tax system, pressures to work longer hours and ongoing financial worries (especially with high rents and cost of housing in the UK generally) affects each and every member of the family. 

We already know that families in the UK often pay more tax than in other OECD countries. This is because caring for dependents is not factored into the equation, unlike in other cultures.  It’s particularly hard for parents when trying to cope on one main income in order that someone is freed up to take care of the baby, the toddlers. poorly family members,  or children with additional needs. 

And increasingly it’s important for someone to be available to take care of the elderly particularly view recent cuts to community budgets.  Likewise cuts to services for teenagers and young people mean they often depend even more on parents for conversation and support during what can be a challenging period in school and when venturing into the world of work and training post 16 years old.

But let’s first focus on the much talked about ‘early years’. 

Many working families are set to lose £2000 or more due to tax credit cuts –  and will be under enormous amount of pressure even when their babies are tiny.  It’s clear that increasing numbers of families will find it challenging to cope with typical work and care responsibilities and balancing the household budget.  

Only the better-off or better paid will be able to start a family.  

We already know that few people believe that family life is respected, valued and properly supported in the UK, as was shown by the Modern Families report by Britain Thinks back in 2011.   Few thought things would get even worse……….

When tax credit cuts start to bite parents will understandably assume that the only option is for the family to find yet more paid work and additional hours if available.  But they probably don’t realise that the Government may take back, in one way or another, most of any extra money they can earn. How much will depend on their precise circumstances. 

If the family are claiming housing benefit the mother will only be able to keep 35% of her earnings as the family would lose housing benefit support. 

If the parent who is already in work tries to fill the hole in the family budget by working overtime the family would keep even less. If the family income is say below £25,000 and the family have been getting tax credits, then according to fiscal experts consulted by MAHM*,  the marginal rate would be 80% .  If housing benefit is involved the marginal rate would be even higher, so there will be no improvement in family circumstances. 

If, following the July budget,  the family lose all their tax credits and are not claiming housing benefit a non earning mother returning to paid work could be slightly better off on some counts, if on high hourly rate of pay or grandparents can step in to help out. But it’s unlikely most will see improvements in household income, view the nature of our tax system.  

It also presumes that family friendly work can be found in the area, that she has transport to travel to work and someone to replace her work caring for children, especially in the school holidays.   It presumes that children have no additional needs, that there are no other elderly relatives being cared for and that she will perform well at interview and beat all the other candidates to the post.   With dozens of applicants  – if not hundreds-  for each teaching assistant job –  she may be looking for a very long time.    There will also be childcare costs to cover, even though there are already generous childcare subsidies costing the Government around £7 billion.   Many second earners returning to work find themselves earning barely enough to reach the tax threshold even with full time hours, as family friendly jobs are hard to come by.  

Low earnings and stretched household budgets means zero possibility of buying in help to do the tasks needed to be done at home –  unlike the highest earning couples or well- off families who are accustomed to outsourcing jobs in order to keep  things in some semblance of order at home!

A mother may decide to become a self-employed childminder and take care of other people’ children too  (if she has space at home),   but she will now have to prove her earnings are viable and of course childcare work is not very well paid work in the UK, no matter what level of qualifications you may have.  She will be working twice as hard with very little return for her work and her hours will be long,  to cover other parents’ commuting times and their full days at the office  (they too are working longer to pay their hefty mortgages).  

In short what is already very difficult situation for families across the income scales becomes ever- more difficult, if  not unsustainable. 

The combination of pressure to juggle two jobs, loss of income support for lower earners and the demands of bringing up a family will likely lead to other problems, including elevated stress and mental health issues.  

Many children already find it difficult to cope in long hours of childcare, particularly in the pre-school years.  The EPPE study of 3 and 4 year olds showed no particular advantage of full days over part time days with a nap at home in the afternoon and mum close by for reassurance, and a cuddle or story-time or trip to visit friends and relatives.

Are we really unable to allow a mother or father to care for children in the pre-school years in the UK?    It’s worth considering that between 17  and 67  (or between 22 and 67 if they’ve been to university)  there are 45/50 years of potential working life.   Are we now expecting both mothers and fathers to work without a break for a total of 100 years between them before retirement, with no time to devote to family care?

Marie Peacock

* some figures on marginal tax rates obtained from Don Draper, fiscal consultant

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