Severe Poverty in Scotland

This report investigates the extent of severe and extreme poverty and how it has changed over time for different population groups, in the context of a decade when relative poverty has been falling in Scotland.






5. KPMG Living Wage Research 201 3

6. See for example and


8. Analysis assumes employment at national minimum wage. Housing benefit is a means tested benefit so the contribution to income is dependent on actual earnings and local housing allowance. Analysis based on tax and benefits in 2012/13.

9. Other changes to tax credits and benefits affecting families with children were freezing the basic element if working tax credits, increasing the minimum number of hours worked to qualify for tax credits for couple families, freezing the income threshold for child tax credits, abolishing the second income threshold for child tax credits, and the introduction of the income disregard for tax credits

10. In 2012 the employment rate amongst female lone parents, aged 16 to 64, stood at 54.9 per cent, compared to 74.8 per cent amongst all other female parents and 66.8 per cent for all women in Scotland. There has been a steady increase in the lone parent employment rate from 42 per cent in 1998, 48 per cent in 2000, 53 per cent in 2002, and 56 per cent in 2006. Labour market statistics are available at:


12. For a single parent with two children working full time on national minimum wage, earned income makes up around two thirds of the household income required to raise income to the poverty threshold. Increasing the hourly rate of pay means only small increases in household income, as increases in earnings are matched by decreases in benefit income (assuming no childcare costs).

13. Assuming no childcare costs.


15. Households Below Average Income: An analysis of the income distribution 1994/95 - 2010/11




For example see ;;;

20. One factor not directly included below is parental qualifications. This is an individual characteristic, and so difficult to categorise as a household characteristic. While low educational qualifications are linked to a higher poverty risk, this is also reflected in the economic status of a household and the income from employment. Note that other factors are known to affect the risk of poverty, such as parental mental health.

21. 52 per cent of working age adults in poverty were living in a working household in 2012/13, as were 59 per cent of children living in poverty.

22. Working households are defined as households where at least one person is in employment, either full-time, part-time, or self-employment.

23. The DWP research report Parents' work entry, progression and retention and child poverty

24. The risk of severe and extreme poverty for households with all adults in full time employment and those with one adult in full time employment and the other in part time employment are largely the same. This may reflect the contribution of benefits and tax credits for households with a second adult in part-time employment (especially households with children) in increasing household income.

25. The majority of self-employed households in Scotland are working age households without children. Although there were self-employed people in extreme poverty, the majority are in low income rather than extreme poverty. There are data issues in reporting the income of self-employed people. For detailed analysis on the link between hardship and income see

26. Monitoring Poverty and Social Exclusion in Scotland 2013

27. Minimum Income Standards 2014

28. In Scotland in 2012, the employment rate amongst female lone parents, aged 16 to 64, stood at 54.9%. This compares to 74.8% amongst all other female parents and 66.8% for all women in Scotland. The rate of females in Scotland not in employment and not seeking employment in 2013 was 27.9%. Of these 28.6% were not seeking employment because they were "looking after family/home". This compares with 6.6% of economically inactive men in Scotland.

29. Despite accounting for just under 30 per cent of all jobs, part-time workers held over 60 per cent of minimum wage jobs. Around 11 per cent of part-time jobs were minimum wage jobs compared with 3 per cent of full-time jobs.


31. OECD 2011 Doing Better for Families: United Kingdom

32. GUS analysis showed amongst unemployed parents, 55% reported that they would prefer to work or study if they were able to afford good quality, reliable and convenient childcare; similarly 62% of non-working parents and 53% of working parents in a separate Scottish Government report identified childcare as a major factor in their decision to work.

33. Child Poverty in Scotland: a brief overview of the evidence


35. The FRS defines disabled people are identified as those who report any physical or mental health condition(s) or illness(es) that last or are expected to last 12 months or more, and which limit their ability to carry out day-to-day activities a little, or a lot.

36. 'Work-limiting disability' is a LFS classification and comprises those people who stated that they have had health problems for more than a year and that these problems affect either the kind or amount of work that they can do. LFS also records whether or not someone is disabled in terms of the Disability Discrimination Act (DDA). Those who are disabled according to the Disability Discrimination Act but not according to the work-limiting definition have work rates which are similar to those who are not disabled under either definition. Note that there is a high overlap between the two groups and that both are of similar size.

37. At the UK level, accounting for 8.1 per cent of total employee jobs, disabled workers held 10.2 per cent of all minimum wage jobs. Around 10.9 per cent of jobs held by disabled workers were minimum wage jobs compared with 7.8 per cent for non-disabled workers. National Minimum Wage Low Pay commission Report 2014.

38. Disability benefits include Disability Living Allowance; Armed Forces Compensation Scheme; Attendance allowance (for those over 65 years); Industrial Injuries Disablement Benefit.

39. HBAI: UK analysis shows in 2012/13 the rate of low income (BHC) for working-age adults living in families containing one or more disabled member and not receiving disability benefits was 23 per cent compared 17 per cent for those in receipt of disability benefits.

40. The FRS Age analysis includes only benefit units with children (families, not households). Where there were two adults in the benefit unit and one was female, age of the female is used. Where it was a single parent family or there was no female adult for whatever reason the age of the parent was used regardless of gender. Around 3% of households with children had no female adult.

41. 72% of the couple households with dependent children with household income below the 60% income threshold had at least one adult in work, 67% for couples without children. SG analysis.

42. Annual population Survey. Data extract from NOMIS

43. National Minimum Wage Low Pay commission Report 2014

44. Joseph Rowntree Foundation Report Poverty among ethnic Groups: How and Why does it differ? 2007


46. Many unpaid carers of working age disabled people will potentially lose Carers Allowance (if the disabled adult loses eligibility for DLA/PIP).

47. See DWP working Paper 115 for further detail.

48. See Brewer et al ;

49. For further detail see DWP Research report 557 The Living Standards of Families with Children Reporting Low incomes

50. For example see


Email: Stephen Smith

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