4 – Perceived impacts of Scottish Child Payment on family finances
- Parents and third sector organisations described SCP as having made a significant financial difference to families on low incomes. There was a clear belief among parents that receiving SCP had reduced their risk of falling into debt to in order to pay bills or afford other essentials. There was evidence to that SCP was helping to reduce food poverty.
- However, at the same time there was a perception that SCP was not a large enough sum of money to have a completely transformative impact on participants' financial situation.
- There was a clear sense that family budgets remained very tight, particularly in the context of the additional financial pressures created by rising living costs and the cancellation of the Universal Credit uplift. This latter UK Government policy change was described both as potentially 'cancelling out' the impact of SCP, and as meaning SCP was even more important to families.
- There were a small number of main carers who felt that receiving SCP themselves had improved their financial position within the household, giving them more independence.
- There was relatively little discussion of SCP impacting on education or labour market outcomes for parents. However, there were examples where parents felt SCP had helped remove barriers to education or work.
SCP is intended to improve outcomes for children and families in Scotland primarily by helping to mitigate some of the financial challenges faced by low-income households. This chapter examines the perceived financial impacts of SCP, including evidence for whether and how SCP might help families escape poverty and material deprivation.
Impact on household budgets
In order to understand the impact of SCP on household budgets, interviews first explored participants' current financial situation in general, in order to contextualise the impact of SCP. When asked about their current financial situation, participants generally described having to be mindful of money and having to budget very carefully. Interviewees included families who were in currently or regularly in debt, borrowing from friends and family, using bank overdraft facilities, or falling behind on bills. Some felt they were really struggling to afford basic expenses such as food and utilities. Others said that they were managing currently but felt they might struggle to afford any unexpected expenses.
"We're living hand to mouth […] living with a baby is very expensive."
(Parent 3, age 35+, single parent)
"Current financial situation is okay. Not massively bad. We're on the bread line. It's not great. I can just get by. If anything did crop up it might not be great."
(Parent 23, age 25-34, single parent, has a disabled child)
In the context of these challenging family circumstances, SCP was seen by parents as making a big difference. It was described as having a 'huge' impact and being a 'lifesaver' at the end of the month when there is extra pressure on budgets. Parents referred to SCP as a relatively small amount of money, but that nevertheless 'goes a long way', particularly when it enabled families to afford essentials like food or utilities.
"[SCP] is a big help. It seems nothing, but it do [sic] matter a lot."
(Parent 26, age 35+, Male)
"Although it's just like ten pounds, it means a lot me. When you have children with disabilities, one happy meal can make them happy [...] in my household every penny counts."
(Parent 8, age 25-34, has a disabled child)
Third sector organisations also felt that that although SCP might seem modest, it still has the potential to make a big difference for low-income families and that any extra money is positive.
"People are really struggling, COVID's exacerbated that, having a cushion is massive for those families living in poverty. Anything that helps ease that is massive."
(Third sector organisation 2)
It was suggested that SCP was particularly helpful for kinship carers, who were seen as likely to become worse off when they start looking after a child for whom they had not expected to be responsible.
Impact on deprivation and debt
There was a clear belief among parents that receiving SCP had reduced their risk of falling into debt. As discussed in the previous chapter, there were families who described using SCP directly to avoid falling into debt to cover essentials for their household – such as paying a bill or buying food. Parents credited SCP with directly reducing their need to borrow, either formally (for example, using their bank overdraft) or informally (from family or friends).
INTERVIEWER: "You mentioned that you had used it for milk and snacks particularly. If you hadn't had the Scottish Child Payment, what would you have done about covering those costs?"
PARENT: "I would take money out of my bill money, so they had everything they needed before paying anything else … I would be behind on bills and would have to ask my mum to borrow money to be able to pay the bills."
(Parent 34, age 18-24, single parent, care-experienced)
Even when participants said they allocated SCP exclusively to items for their children, this had wider benefits for their overall household budget by reducing the need for parents to go without other essentials themselves, or to fall into debt in order to afford things for their children.
"I only use [SCP] for (son), but having that stops me having to get behind on bills."
(Parent 23, age 25-34, single parent, has a disabled child)
There was evidence to suggest that SCP has contributed to reducing food poverty – for example, one parent said they had relied on food parcels before receiving SCP, while another described having to skip meals themselves in the past when they were really struggling financially. Other participants thought that without SCP, they might be forced to cut back on their food budget or make use of food banks.
INTERVIEWER: "When you've spent SCP on food, what would you have done about that if you hadn't received the forty pounds?"
PARENT: "I'd have probably gone to a food bank or borrowed money off friends or family."
(Parent 24, age 18-24, single parent, 3+ children)
Parents felt that they relied on SCP financially to varying degrees. Among those who used it to buy basic expenses such as food or to pay bills, there was a strong sense that they depended on SCP to be able to buy these things or to avoid getting into debt in order to do so. Others, who reported that they could afford household essentials without SCP, were less likely to say they relied on it. However, even among these parents there was a recognition that they relied on the payment to fund trips or treats that they felt improved their children's quality of life, and which they would otherwise miss out on.
"I completely rely on them [SCP payments]. I don't know how the bills would end up, how the food would be on the table, how we'd survive with the child. It makes me stressed to think about these things."
(Parent 26, age 35+, Male)
"Yeah [I do rely on SCP] […] I don't rely on it in terms of it would cause an issue food-wise or housing-wise, but it would have an impact on [my son]'s happiness."
(Parent 38, age 25-34, single parent, 3+ children)
Case study 4, below, illustrates the significant financial impacts that one parent of disabled children felt SCP had for them. This highlights that the financial impacts of SCP may be particularly pronounced for families with disabled children, who often incur more additional expenses than other families.
One view from a parent with a disabled child was that this additional expense ought to be reflected in a higher rate of SCP for disabled children. However, it is worth noting that most interviews for this research took place prior to the introduction of Scottish Child Disability Payment, which replaces the Disability Living Allowance for Children, previously administered by DWP. This payment is intended to cover the additional costs families with disabled children may incur and may be a more appropriate vehicle for providing any additional support.
Case study 4: Laura
Laura is a single parent to her three children, Tom, Stuart, and Euan. She receives SCP for her youngest child, Tom, who has autism and physical disabilities. Laura is studying for a pre-university access course. She wants to apply for university in the future, but as childcare takes up so much of her time, that will depend on whether she can get childcare.
Her family faces extra costs due to her children's additional support needs. For example sensory issues mean she often has to buy more expensive clothes for Tom and Stuart (who also has autism). Costs have increased since Tom started school, as he needed a new uniform. Laura paid for a taxi to make the transition easier for him, as he is too anxious to go on the bus.
Laura feels SCP has made a 'huge' difference to her family's financial situation, as it meant she could cover these extra expenses and prevent her from using her bank's overdraft facility.
"I don't think without borrowing I would have managed it, especially the first six weeks of him starting school."
Laura has also noticed benefits for her children, as she can now buy them the occasional treat. This also means that she is more likely to take them out now that she doesn't have to worry as much about saying no to them every time they want something. This has been particularly helpful for Tom, who struggles to understand when she can't afford things and can get very upset. Laura believes has this has improved her wellbeing too, as she feels less guilt about not being able to buy things for the children and she feels a lot less stressed about money.
"[SCP] definitely reduced stress a lot, that little bit extra. It takes that edge off. It doesn't solve all problems, I still have bills and it's still stressful, but [we] have that bit extra."
Although Laura has not used SCP to help her access work or education, she thinks it could be useful in the future to contribute towards the costs of childcare to enable her to go to university.
External constraints on the financial impact of SCP
Overall, there was a consensus among the parents interviewed for this research that SCP had a positive impact on family finances. They cited examples of how the payment had reduced their reliance on debt, allowed parents to afford essentials that they or their children might otherwise have gone without, and generally relieved some of the pressure on family budgets. However, at the same time there was also a perception that SCP was not a large enough sum of money to have a completely transformative impact on participants' financial situation. For some families, SCP was seen as just a 'wee bit extra' which helped to alleviate some of the financial pressure they were under. This did not change the fact that their household budgets remained very tight, and that spending required very careful planning from week to week to ensure they had enough for everything they and their children needed.
This view was supported by third sector organisations, who were clear that the level SCP was currently set at (£10 a week at the time of writing – although as noted, it is scheduled to double in April 2022) was not currently enough to bring people out of poverty.
"I wouldn't say it's changed [my financial situation], I would say it's helped out."
(Parent 17, age 25-34, single parent, large family)
"Ten pounds a week isn't a high enough level of benefit to take somebody out of poverty. The clients that I've seen – many of them are in poverty and experience material deprivation. While it's improved their wellbeing it certainly hasn't taken them out of poverty. […] It would take a significant amount of money to take people out of poverty because the gap's getting wider between income and expenditure."
(Third sector organisation 1)
The financial impact of SCP was discussed by both parents and third sector organisations within the wider context of additional financial pressures for families which were seen as limiting its potential impact – specifically, the sharp increases in the costs of living experienced in 2021 and continuing into 2022, and the cancellation of the Universal Credit uplift.
Parents who were interviewed for this research in the second half of 2021 reported that increased prices were already reducing the spending power of SCP and limiting its impact on their overall household budgets. Third sector organisations highlighted the fact that – notwithstanding the planned increase in the actual value of SCP – the 'real' value of the payment will continue to decrease over time as living costs continue to rise. The cancellation of the Universal Credit uplift was also seen as limiting the impact of SCP by effectively 'cancelling it out' (since the uplift was worth £20 a week – matching the £20 a week that SCP will increase to in April 2022). At the same time, there was a perception that this major change to people's Universal Credit income increased the importance of SCP.
"Everything has become more expensive. It's very difficult. Everything has become more limited. The EU thing happened. The pandemic thing happened. Utilities going high. Benefits are cutting […] it's a day-to-day struggle."
(Parent 26, age 35+, Male)
"The value is eroding over time and it's not providing as much as it could. When the [Universal Credit] uplift ends, the ten pounds isn't going to make as significant difference as it was intended to."
(Third sector organisation 1)
"[SCP] definitely does help. I think I would be lost without it, especially with the reduction in Universal Credit, so it will help a lot more [even] than it did before."
(Parent 7, age 25-34, single parent, care-experienced)
Parents interviewed for this research were occasionally aware of proposals (which became firm plans during fieldwork, in November 2021) to double SCP and felt this would be very welcome. It was suggested that, for some families, this doubling might enable them to do something beyond the 'every day', such as occasional days out.
Impacts on the financial position of main carers
SCP is, ideally, intended to go to the main carer of an eligible child, as there is evidence that the main carer, typically the mother, is more likely to spend the money on the child. However, depending on which parent applies for SCP, there is a chance that that it may not always reach the main carer as intended.
Most of the parents interviewed for this research received SCP themselves. In the small number of cases where their partner (who was not the main carer) received the payment, participants did not think this had made any difference to how their family used it in practice.
However, the research team did hear from a small number of main carers who felt that receiving SCP themselves had benefited their financial position within the household. For example, one mother said that her husband received their Universal Credit payments, but she had applied for SCP as the main carer. She felt that receiving it gave her a level of independence, as it was the only source of household income that came directly to her. Another described having had to ask her husband (who was the sole income earner in their household) for money for nappies, prior to receiving SCP.
"As a joint claimer it's definitely given me that bit of independence, that's my only income."
(Parent 20, age 25-34, with care experience)
Impacts on parental education and labour market outcomes
There was relatively little discussion among parents interviewed for this research of any potential impacts from SCP on education or labour market outcomes for parents. In part, this reflects the fact that many of parents in the sample were full time carers for their young children and were not currently looking for work. At the same time, as discussed in Chapter 3, it also likely reflects the fact that some parents viewed SCP as 'allocated' specifically to their children, so would not use it directly to help with their own access to education or work.
However, there were some examples where parents felt SCP had helped remove barriers to education or work. Parents had used it towards childcare to enable studying, used it directly for travel to interviews or (initially) travel to a new job, and been able to pay for a bus to college without worrying about whether they would then have enough money for snacks for their children. One interviewee said it helped her to stay in university by providing additional income security so that she did not have to worry about not being able to take on a full-time job while studying:
"I do think if it wasn't for that help, I would have considered leaving university and just getting a full-time job somewhere. It really helped. It was one thing in a lot of contributing factors."
(Parent 32, age 18-24)
Third sector organisations interviewed for this research expressed differing views on whether SCP had or could have a significant impact on parental participation in education and the labour market. One view was that this was a much wider issue that would require a lot more support in many different areas. However, it was also suggested that because SCP is not included in Universal Credit calculations, it might help encourage parents to stay in work as they would not be at risk of losing this support.
"I would imagine it would have because the SCP is disregarded in UC calculations […] if they're moving into work and that extra money is going one hundred percent to them, that is going to help them see that staying in work is advantageous to them."
(Third sector organisation 1)
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