Universal Credit: Effect of Child Element on Separated Parents

The report went on to highlight that the current system does not meet those principles, pointing to the presumption that there is one main carer, despite the range of shared care arrangements in place within separated families. The report stated that, as a result, some parents without main caring responsibilities are being pushed into hardship, may face poor work incentives and are unable to share care of their child, which may not be in the best interests of the child’s welfare. I have to ask the Minister, what is the merit of the state deciding who is the main carer in situations where children are shared equally between two parents?

The committee pointed to Scotland as an example of best practice, given that the Scottish Parliament has established a cross-party working group looking at separated parents. It was recommended that the Department for Work and Pensions should join up with that group to ensure a joined-up approach and to learn lessons from the progress made so far. Chesterfield Borough Council has enabled Mr Waterhouse to have a discretionary housing benefit allowance payment that can be used in cases where the Government’s unfair bedroom tax applies. However, the Government are specific that it is a transitional payment to allow claimants to make arrangements to move into more appropriately sized housing. In this case, Mr Waterhouse’s property is exactly the right size when his children are with him. Although we have managed to get Chesterfield to extend the discretionary housing benefit, relying on that means that the Government have outsourced responsibility for the fairness of welfare policy on to Chesterfield Borough Council rather than the Department for Work and Pensions taking the responsibility, which is where it should reside.

In addition to having the bedroom tax imposed upon him, Mr Waterhouse is unable to receive the housing portion of child benefit, given that his children live with him on what is seen as a part-time basis, albeit 50% of the time. Given that my constituent is unable to work owing to a long-term mental health condition, he is now struggling to make ends meet. That is without the additional stresses placed on him by the current benefits system. He does not qualify for any child benefit entitlement. Again, as he has his children on a half-time basis, despite the lack of funds, my constituent is expected to care for his children when they stay with him. From what he has put on social media and from reading the evidence from many other parents in a similar situation, it is clear that his situation is not unique. He is often forced to go without to prevent his children going hungry.

It is difficult to quantify the scale of the situation as there is currently poor quality data available in relation to parents without main caring responsibility. The family resources survey in 2017-18 estimated that as many as 30,000 young non-resident parents were likely to be affected by the housing benefit shared accommodation rate policy. I understand that the situation is a difficult one, particularly in circumstances where parents are in a dispute over custody or child maintenance payments.

In the Social Security Advisory Committee report that I referred to earlier, the committee believed that a cross-departmental working group should be set up to instigate urgent action on these issues. It suggested that such a working group should consider the impact of policy on the living standards of both parents and the net impact of that policy on children’s welfare. It should consider how the social security system could better reflect modern shared care relationships that are not detrimental to the parent without main caring responsibility. What actions have the Government taken as a result of the Social Security Advisory Committee report and has the cross-departmental working group been set up to instigate urgent action on the issues that the committee raised?

The committee went on to say that the group should also consider how to ensure that the benefits system and interactions with the child maintenance formula do not unduly result in poor work incentives or push one parent into hardship, with all the impact that that would have on the children, and it should consider how to ensure separated parents can easily access the right information and support from the social security system. The Government’s sorting out separation website was a welcome step, but much more needs to be done to help both parents effectively navigate the complexity of the system. The committee also suggested that the social security system and interactions with the child maintenance system affect the hardship of both parents, including those not classified as having main caring responsibility, while also affecting and creating hardship for children.

When examining the housing element of universal credit, the committee recommended that the system should be reformed to enable young parents under 35, who share custody of their children, to have them to stay overnight without imposing a financial penalty. Another key recommendation of the committee was that the Department for Work and Pensions should consider options for the system to support all non-residential parents with more than one child to stay with them overnight.

I do not underestimate the challenge, given that it is difficult to design a system that takes into account every personal circumstance, but I do say that there should be safeguards in place to ensure that any social security system is not open to abuse and does not work against the interests of separated parents when one parent has decided not to support a collective approach. We also need to make sure that children are protected in the eventuality that one parent is negligent in carrying out their responsibilities, and I recognise that striking a balance is a difficult matter, but it is incredibly important. It is clear that the social security system is currently not fit for purpose to reflect the complexities of modern family life and that reform is necessary.

In summary, it cannot be right that the benefits system forces parents already in dispute to fight it out between themselves as to who receives the money needed to support their children. Nor can it be right that parents who do the right thing and want to care for their children are hit with the bedroom tax for having their child’s bedroom empty for half the week. In addition to the Minister telling us what the Government have done in response to the Social Security Advisory Committee report, will he tell us what steps they are planning or can take to ensure the equity of payments in these situations? Is the gender of the parent a factor that the state considers when deciding who should be regarded as the main carer? Does the Minister think that the Government do enough to support separated fathers to continue to be there for their children? Will he explain why it is not appropriate for benefit payments to be shared as a matter of course when parents are sharing responsibilities rather than relying on parents coming to some mutual arrangement? I do not underestimate the difficulty in finding arrangements that work fairly and equitably for all sides but will the Minister tell us whether there are any specific concerns about an assumption towards shared payment?

Protecting children who have suffered the trauma of a divorce is something that we should all feel passionately about. Supporting their parents when they are suffering ill health is one of the most tangible ways that we can deliver on that. The report has exposed the failures in the system so I hope that this debate and the Minister’s response can be a step towards getting greater fairness and security for many of the 3.9 million children who will look to us to act.

The hon. Member for Chesterfield spoke about who receives the child element of universal credit when separated parents share custody, including arrangements where it is shared 50:50. Where a separated couple have joint custody for their children, the parent who receives the child element is the one the child normally lives with, but if the child normally lives with both, it is the parent who has the main responsibility for the child who receives it. That is decided by the parents, or by a Department for Work and Pensions decision maker if the parents cannot agree or the decision maker does not think that the nomination accurately reflects the arrangement. It is important to stress that similar rules apply to child tax credit and to child benefit, both of which are administered by Her Majesty's Revenue and Customs.

I appreciate the points the hon. Gentleman made and I have huge sympathy with some of them. This is a hugely complex situation and there are no simple or easy options, as he said. There are many different kinds of childcare arrangements that families can come to; that is why our policy is to pay the child element to one parent, and then leave it to families to decide how it is shared between different parties who care for the child or children. Our view is that separated families are able to make their own private arrangements regarding the sharing of resources for children without state intervention.

It might assist and add some important context if I set out some details of how universal credit awards are calculated. Universal credit is a unitary benefit made up of different elements. There is a standard allowance, plus additions to help with additional expenses; for example, the cost of raising children comes via the child element. These elements are all subject to prescribed maximum amounts and paid as a single monthly award, which is calculated at the end of a claimant’s assessment period. Consequently, certain elements, such as the child element, cannot be ring-fenced or separated from the monthly award. Attempting to ring-fence individual components or extract them from the calculation would ignore the all-important interaction between the different stages of the calculation and would not correctly reflect how universal credit is designed in legislation and how it operates in practice.

I understand the case the hon. Gentleman made for his constituent, and we have corresponded on it. There is a 50:50 shared care arrangement, but the ex-partner receives the child element for both children. I understand that that means the constituent does not receive housing support for the additional bedroom that he has. As I have pointed out in correspondence with the hon. Gentleman, we have provided resources to local authorities so that additional financial support for those facing a shortfall in meeting their rental housing costs can be given through discretionary housing payments. We have provided about £1 billion in discretionary housing payments to local authorities since 2011, and they are designed to help the most vulnerable and disadvantaged to meet their housing costs.