Welfare Reform Bill

Baroness Pitkeathley Excerpts

Monday 12th December 2011 Lords Chamber

[Baroness Bakewell]

My Lords, this amendment seeks to make the lot of carers in our society, whose lives are often already difficult and sometimes miserable, less miserable than it would be if the Bill went ahead as proposed.

There are 6.4 million carers in the UK contributing an estimated £119 billion to the UK for the unpaid care that they provide. I reiterate those figures: 6.4 million carers saving the country £119 billion. What kind of lives do these people have? What kind of situation are they in that they are able to be so generous with their time and their care? They have a rough time. They face a precarious financial situation, with 72 per cent finding themselves worse off when becoming carers due to the combined pressures of reduced earnings, a low level of benefits and the costs associated with living with someone with a disability. A Carers UK survey of over 1,700 carers found that 74 per cent were struggling to pay essential utility bills, 52 per cent were cutting back on their own food to cope, 66 per cent were using their own income earned from very modest jobs to pay for care for the person they were caring for, and 54 per cent were in debt as a result. It is worth saying that people do not choose to be carers; somewhere along the line life has been unkind to them and they are making the very best of it in the interests of us all.

The amendment seeks to help those carers who wish to make their income more secure by taking part in some paid work. It would ensure that when universal credit was calculated, carers would be allowed to keep more of their earnings than those without such responsibilities in recognition of the additional barriers that they face in combining work and care. It is welcome that the Government have decided to keep the carers’ allowance out of the universal credit. That is to the good. It is also welcome that the additional support given to those in short-hours jobs under the universal credit scheme will help to make work pay for some carers. However, it is not clear why the Government do not recognise, with a specific disregard within universal credit, the particular difficulties for carers in holding down a job.

Currently, individuals in receipt of income support are eligible for a £20 a week earnings disregard. That is not a fortune. They are allowed to earn £20 a week before their benefit starts to be withdrawn. The Government have announced that there will be specific disregards for couples, single people, lone parents and disabled people, and they have stated that, taken together with the universal credit taper, these will leave those four groups in low-paying jobs significantly better off than under the current system. However, for some reason this does not apply to single carers, who currently have access to a £20 disregard in income support through the receipt of the carer premium but would be able to access only the basic single person disregard of around £13.50 a week under universal credit. This could leave carers who are juggling work and care over £200 a year worse off because their benefits would be withdrawn earlier.

It does not sound much, does it—£200 a year? What difference could that make? Let me tell your Lordships what difference that would make, and let me repeat that this difference could affect a large number of the 6.4 million carers who are saving the country £119 billion a year in unpaid care. They are the ones who will suffer worse than they already do—carers living on their own, those who do not have children and those who are caring for a disabled parent who is not considered part of their household for the purposes of universal credit. All those groups would be made deliberately worse off than they already are. This group includes those who look after a disabled or elderly friend or poor relative who does not live with them and those who look after, for example, an adult disabled child who lives with them but, because of the rules of universal credit, is not seen as part of their household.

Carers UK estimates that this is likely to affect up to 50,000 carers, leaving them worse off in work and breaking the promise of universal credit to make work pay. These carers did not choose the life that has rolled out before them. They did not make choices about jobs and opportunities. They did not make choices; they were faced with someone they love in a disabled and needful situation. Out of the love they bear them they have made the sacrifice of careers and opportunities to earn as other people earn, in order to give free of their love and to provide care to those in their family. As Carers UK put it, nearly three-quarters of carers on benefits are women. On top of the additional likelihood of childcare responsibilities and difficulties in accessing replacement social care, thereby reducing the financial return of work for women who are able to work for only a few hours alongside caring, this will act to further distance female carers from the workplace.

Carers UK gives the following case study of someone who would be affected by these measures. This is an example. Janet is 55, single and cares for her son Michael, who is 30. Michael is severely autistic, has multiple health conditions and needs constant support. He receives disability living allowance and Janet receives the carer premium to income support for caring for him. Several years ago Michael started going to a specialist day centre for one day a week. Janet has been able to start working for a few hours, earning £20 a week as a cleaner, while Michael is at the day centre. With the income support earnings disregard Janet’s benefits are unaffected by her earnings. However, under universal credit, because she would be eligible only for the basic single person’s earnings disregard, as Michael is not considered to be in the same benefit household as Janet even though they live together, this would mean that after the first £13.50 of earnings, Janet’s earnings would be tapered away at the 65 per cent taper. For £20 of earnings she would be £15.78 better off. Compared to her situation on income support, Janet would be £4.22 a week—£219.44 a year—worse off in work. Is this a situation that people can be proud of—that we should be penalising someone who is giving so much free labour to the country? Janet is unable to increase her working hours because additional day centres are not available and buying replacement specialist domiciliary care costs over £15 an hour, so that would actually leave Janet worse off.

Janet is trapped. She does not have any options—oh, but she does have an option: she could give up doing her caring and put the person for whom she cares into care. She could say, “This is enough. My contribution is not recognised. I am worn out and finding the stress of looking after someone disabled too much. I am going to give up, and someone else can cope. I am going to get a job and make my way of life more comfortable”. What percentage of 6.4 million carers might make such a decision? What would it cost the state if they all abandoned their role as carers? They already do not believe that they get much sympathy from society at large, but moves like this would alienate them still further. The Government should estimate what the cost would be if even a small percentage of 6.4 million carers gave up their role. I beg to move.

[Baroness Pitkeathley]

My Lords, I support this amendment, to which my name is also attached. Because of the scheduling of business in your Lordships’ House this is the first opportunity I have had to speak on the Welfare Reform Bill, but I know that many, indeed most, in the carers’ movement owe a huge debt of gratitude to the noble Baronesses and noble Lords who have been speaking throughout Committee stage.

The amendment proposed so ably and passionately by my noble friend seeks to ensure that the universal credit does not put up a further barrier for those people who want to combine caring with work. Given that the aim of the universal credit is to support people into work, it seems wrong to reduce the work incentives for one of the groups for which that support is most needed.

I agree with the Minister’s aim to encourage carers to combine paid work with their caring. Let us think of the reasons why we want to do that. First, it would increase their income; we have already heard that caring takes place in poverty. Secondly, if carers are not in work, they build up poverty for themselves in future through the reduction in their pension contributions. Thirdly, and perhaps most significantly, being in a paid job helps carers with the stress, which is often very great, of their caring role. It enables them to maintain social contact and skills and to have a bit of respite from the caring situation. So we want to help carers stay in work as long as possible.

We know, however, that carers already face significant barriers to work. According to research commissioned by Carers UK and the DWP for carers’ rights day in 2009, some 1 million carers—that is around one in six of the figure that we have heard of 6 million carers—have given up work or reduced their working hours in order to remain as carers. A major barrier is the availability of suitable replacement care. In a separate survey, over 40 per cent of carers who gave up work did so due to a lack of sufficiently reliable or flexible services. A similar number, 41 per cent, said that they would rather be in paid work but services available do not make a job possible. In addition to that, for those who are able to juggle work and care, stress and poor health are common. Nearly half of the respondents to a survey of working carers for Employers for Carers and Carers UK indicated that their work had been negatively affected by caring and that they felt tired, stressed and anxious. Employees with heavy caring responsibilities are two to three times more likely than those without caring responsibilities to be in poor health. For these reasons, carers are just the sort of claimants to be working a few hours a week in low-paid work. We estimate that 50,000 of them might be affected by this change.

I know that the Minister wants to encourage carers to start working more than a few hours, but because of the other issues I have mentioned, for many carers a small or even a tiny increase in working hours is impossible. Because the Government argue elsewhere in the Bill that increasing earnings disregards will incentivise work, it seems inconsistent here to suggest that reducing the carers disregard will encourage additional work. I hope the Minister will agree that there is no logic to discouraging carers from juggling paid work with caring as long as they can and leaving them worse off than they are. I very much support the amendment.

[Baroness Lister of Burtersett]

My Lords, I am not going to add to the very powerful case that has already been made by my noble friends Lady Bakewell and Lady Pitkeathley. I simply wanted to seek some clarification of what was said in Committee, when a number of us put the case for a carers disregard, and the Minister said in his reply:

“Rather than going through the complexity of the separate disregard route, we have provided an additional element that is included in the gross amount of the universal credit for carers. That is a change from carer’s allowance”.—[Official Report, 1/11/11; col. GC 443.]

I am rather confused by this, because it seemed to me that it was muddling up carer’s allowance—a very important benefit, which some of us would like to see higher than it is at present—and the support provided to carers through means tested benefits such as income support.

Because I worry about my memory for the intricacies of social security I did not challenge the Minister at that point, but afterwards I sought guidance from Carers UK. It, too, was very confused by what the Minister said, and wondered whether or not the Minister—I hate to say this—was perhaps confusing carer’s allowance and means tested support for carers. Because the position is not changing, I do not see how the removal of a disregard can be justified on the basis of what happens with carer’s allowance. Universal credit is not replacing carer’s allowance. There is an element in means tested benefits for carers that will continue, but it is nothing to do with whether there is a disregard or not. It wondered whether the Minister is promising a higher premium for carers under universal credit. That would be excellent news if it were the case, but I rather doubt it. Could the Minister perhaps clarify what he meant in Committee, because it did not seem to me that it was answering the kind of case that has been made by my noble friends; namely, why is it that carers are the only group to lose the disregard that they currently have?