UK welfare policy: impact on families with children

Report focusing on the financial impacts of UK welfare policy on families with children.

This document is part of 2 collections


1. Scottish Government (June 2017) ' Welfare Reform (Further Provision) (Scotland) Act 2012: Annual Report 2017'.

2. Graham, H. et al. (June 2016) 'The Impact of Welfare Reform in Scotland - Tracking Study - Sweep 4 Report'.

3. For more information on Experience Panels see the following link:

4. Note – for more information see section 3 of the Welfare Reform (Further Provision) (Scotland) Act 2012: Annual Report 2017'.

5. A number of exemptions to the 2 child limit exist, for more information see page 60 of the Welfare Reform Report 2017.

6. Excludes those qualifying for ESA in the 'Support group'.

7. See

8. Office for Budget Responsibility (March 2017) ' Economic and Fiscal Outlook' (see supplementary economic table 1.19)

9. Resolution Foundation (May 2017) 'Still just about managing? Pre-election briefing on the main political parties' welfare policies'. Available here:

10. Figures calculated in £ per year in 2017–18 prices.

11. This analysis includes a larger range of welfare and tax changes. For a full list of modelled policies refer to Appendix A in the link below.

12. Hood, A. & Waters, T. (April 2017) 'The impact of tax and benefit reforms on household incomes', IFS. Available at:

13. The Early Warning System monitors the impact of changes to the social security system on children, their families and the communities that support them.

14. Source - DWP Stat-Xplore

15. HMRC have not published any statistics showing the number of families affected. Once fully rolled out the policy could affect up to 50,000 households.

16. To note - the decision of the Scottish Government to freeze the higher threshold is applied in both scenarios, but does not affect the overall financial position of case study families.

17. This is based on an average LHA rate across all Broad Rental Market Areas. Therefore, in some areas the assumed rate may be slightly above the relevant LHA rate.

18. Note – for more information on Transitional Protection Payments see the following link (

19. This is the latest data available for Income Support (Source DWP Stat-Xplore). Around 1,200 lone parents households claimed UC in February 2017 in Scotland. DWP data on the number of children in these families is not published, although the number with 3 children is likely to be small. In August 2014 (before UC rollout), around 20% of households claiming Income Support (5,200 in total) had three or more children.

20. If Ms P was in receipt of legacy benefits currently, her benefit income would be subject to the cap.

21. £23,286 – £20,055 = £3,230

22. DWP (July 2015) ' Welfare Reform and Work Bill: Impact Assessment of the change in conditionality for responsible carers on Universal Credit'

23. On 22 June a High Court judge ruled that the Benefit Cap on lone parents of children under two was unlawful and discriminatory. DWP have indicated they will seek to appeal the decision.

24. Note – HMRC statistics do not show family types (couple/lone parent) by the number of children at a Scotland level. At a GB level 41% of in-work couples with children claiming Tax Credits have two children.

25. £526 is 63% of the £834 increase in household earnings.

26. HMRC statistics do not show family types (couple/lone parent) by the number of children for Scotland. GB level statistics show that 83% of in-work households with 4 or more children claiming Tax Credits are couples, rather than lone parents.

27. Due to the uprating of the Personal Allowance to £12,500 by 2020/21 (compared to assumed £11,000 in the no change scenario), part of the increase in net earnings is due to a lower amount of Income Tax paid by the household.

28. Uprated to take account of the higher National Living Wage of £8.75 which is assumed in 2020/21.

29. It should be noted that Mr C would have up to 39 weeks to find alternative employment before being subject to the Benefit Cap.

30. £37,275 - £25,530 = £11,745

31. Scottish Government (March 2017) 'Poverty and Income Inequality in Scotland: 2015/16'. Available at:

32. Institute of Fiscal Studies (March 2017) 'Living standards, poverty and inequality in the UK: 2016–17 to 2021–22'. Available at:


Email: Philip Duffy,

Phone: 0300 244 4000 – Central Enquiry Unit

The Scottish Government
St Andrew's House
Regent Road

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