Fran Bennett is a Senior Research Fellow at the Department of Social Policy and Intervention, University of Oxford, and a Visiting Fellow at the University of Bath Institute for Policy Research (IPR). She is a member of the team working on the ESRC-funded IPR research project on Universal Credit and couples, and a member of the Policy Advisory Group of the Women’s Budget Group. Marilyn Howard is an Honorary Research Associate at the Law School and doctoral student in the School for Policy Studies, University of Bristol, and a member of the Policy Advisory Group of the Women’s Budget Group.
On 9 March, the House of Lords Economic Affairs Committee and the Commons Work and Pensions Committee held a joint oral evidence session. The Committees wanted to question the Government about its responses to the reports they had both published recently (see: Economic Affairs Committee report and Commons Work and Pensions Committee report) about Universal Credit (UC). Such a joint session is unprecedented, to our knowledge.
The witnesses were Will Quince MP, Minister for Welfare Delivery, and Neil Couling, Senior Responsible Owner for UC in the Department for Work and Pensions (DWP). One question was about the potential for separate payments of UC to each partner in couples, to replace the single payment to one account that is currently the default arrangement. This had been favoured by witnesses giving evidence to the Economic Affairs Committee, including both academics and nongovernmental organisations (and including Rita Griffiths from the ESRC-funded Universal Credit and Couples research project based at the University of Bath). But the Government has reiterated that it is unnecessary to introduce such separate payments.
These issues have been raised previously and discussion of them tends to reflect ongoing confusion about how couples manage their money; who currently receives UC in couples; and the Scottish Government’s intention to introduce separate payments. In order to try to clarify these topics, we draw here on our joint article and on our engagement and writing as active members of the Women’s Budget Group, which has carried out gender analysis of UC since it was first mooted.
Couples managing their money
Split payments may be available to partners in couples, but only in very exceptional circumstances in which one partner discloses domestic abuse (including financial coercion) and/or financial mismanagement. But these split payments are discretionary and usually temporary. In November 2020, 173 payments were split (fewer than one couple per 5,000), two-thirds of these being cases in which children were present.[1]
Ministers and officials tend to say that most couples can and want to manage their finances jointly. The Government has also frequently stated that only 2 per cent of married couples and 7 per cent of cohabiting couples have completely separate finances. In fact, these statistics come from the Families and Children Study (FACS) carried out in 2008, and thus refer to couples with children, rather than to all couples. Those with children have been found to be more likely to pool their incomes than childless couples. For example, the EU Survey of Income and Living Conditions study ran a special module in 2010 exploring pooling of income, and some 30% did not do so fully.
Pooling resources is not the same as management of the household budget, anyway. The Work and Pensions Committee has noted that the 2008 FACS showed only about half of couples with children sharing and managing their finances completely jointly. The 2012 Poverty and Social Exclusion survey found that 49% of couples pooled and managed finances jointly, with a further 15% pooling some money and keeping the rest separate. In addition, a more recent Scottish Social Attitudes Survey found that in 2019/20 two-fifths of those living with a partner in Scotland put all their income into a joint pool, whilst a fifth kept all or almost all their own income themselves.
Couples use different arrangements to cope with the complexities of modern family life (for example, when living in 'blended' families); and younger couples in particular are more likely to have more independent finances today.
In any case, the introduction of separate UC payments by default (potentially with a choice to opt out of this) would not adversely affect couples' ability to pool their incomes. Many do so currently whilst having separate incomes (including from wages) and often separate accounts. Deciding whether to pool income and how to organise it is different from each partner’s access to income in the first place. The payment to one account is potentially more momentous for UC, too, because it has integrated different benefits which might previously have been paid to each member of the couple. In its equality impact assessment for the UC White Paper, the Government said it would consider the impact of paying UC to one partner, with evidence about how families share their income and how money intended for children is spent; it is not clear that it has done so.
Receipt of Universal Credit in couples
The statement was also made during the hearing that some 60 per cent of UC payments in couples are currently made to the woman. But it is important to recognise the current data limitations in this area.
This statistic appears to be taken from the ad hoc research carried out by the DWP in 2018 (published in January 2019) on its own payments system data. The research was based on identifying the sex of the bank account holder by the person’s name. From data on 120,000 couples, such identification was only possible in some three-fifths of cases. In 59 per cent of these (around 42,480), UC was identified as being paid to an account held by a female, and in 41 per cent (about 29,52) to a male held account. Detail is missing for two out of five couples in the data set (around 48,000). So it would be more accurate to say that, where the sex of the account holder is known, 59 per cent of these are female. Joint accounts were omitted where this was obvious; but this may not always have been clear.
The 'nudge' to couples to nominate the main carer for payment in the online claim form, which was proposed by Amber Rudd when Secretary of State, was welcome. But this is only a 'nudge', only covers claimants with children, and in any case leaves all the payment still going to one person (or a joint account).
Scottish Government intention to make separate payments to partners
There was also discussion in the hearing on 9 March about the Scottish Government's intention to make separate payments of UC to partners in couples more routine - very different from the current exceptional arrangements for split payments - and the challenges faced in implementing this. Responsibility in this area is shared with the UK Government, as a joint programme, rather than being entirely devolved to Scotland. And, whilst discretionary split payments are currently delivered manually, the idea for wider separate payments is to automate these - to integrate them into the IT system. As the DWP is responsible for the IT system that delivers UC, it is not possible for the Scottish Government to implement separate payments in the broader way envisaged without collaboration with the DWP.
Indeed, in a recent evidence session of the Scottish Affairs Committee, the Scottish Cabinet Secretary referred to ‘awaiting movement’ from the DWP on split payments (and the bedroom tax). This is not to deny that, with an integrated payment such as UC, there are significant challenges in introducing separate payments in practice.
The Government defends the current system as fitting with not only what couples do but also what they want to do. But the evidence to support this is weak. Research on managing money within households shows how complex this is, and a few survey questions cannot really do this justice. There is also continuing confusion about the difference between temporary, discretionary split payments as exceptional arrangements for a few claimants on the one hand and separate payments as an option available to all couples on the other. The ‘nudge’ to pay all of UC to the ‘main carer’ in couples does not provide a full solution. The Government should carry out the promised investigation of the impact of paying UC to one partner and explore possible options for giving access to income for both partners in couples on UC.
[1] Where child element payable - https://stat-xplore.dwp.gov.uk/webapi/jsf/login.xhtml. In Northern Ireland there are wider grounds for split payments, but very few are awarded.
All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.
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