First principle: Do no harm

Posted on June 27, 2015 by Tom Healy

Tom Healy, Director NERI
Tom Healy, Director NERI

On Thursday of this week just as half a million children at primary school begin their summer holidays many thousands of children in families with one parent face a drop in family income - a sharp drop in some cases by as much as €140 per week.  Just at a time when working parents are under severe pressure to find chilcare for their children after school their incomes will be cut sharply.  The end of austerity in Ireland has been greatly exaggerated. Parenting can be a challenging undertaking. Parenting alone or mainly alone – for whatever reason – can be particularly challenging. A living income, social support and access to help are vital to help parents and children avoid poverty.  Economists and statisticians need to be careful when describing the nature of work and household composition.

References to ‘jobless households’ or ‘activation measures’ betray an underlying set of assumptions or values about (a) the nature of work and (b) value of different kinds of work. Add to this a widespread (but by no means universal) prejudice that lone parents (typically mothers) are in some way to blame and need to be 'encouraged' to enter the workforce and avoid 'welfare dependency'.  In Ireland due to the restraints of political correctness such prejudices are rarely articulated explicitly. In the UK such restraints have been thrown to the winds under the general heading of 'welfare reform'.

To care for someone – a child, an elderly person or someone in particular need is an extremely important part of total economic activity. It may not be paid for in the market place but it provides a crucial benefit to individuals and society.

challenging terminology and concepts around 'work' and 'activity'...

To regard someone who devotes most of their waking time to caring as ‘inactive’ because they are not paid for their work whether as an employee or a self-employed person reflects a prejudice and distorted value system. Yet, to undertake paid work is a choice and vital necessity for most adults and it makes for good social policy to encourage men and women to work in what economists call the ‘workforce’. Sustaining adequate levels of employment at between 70 and 85% of the adult working population is a good policy goal especially when such work is adequately remunerated and is undertaken in conditions that match workers’ rights. Parenting, caring and working in the paid labour market need not necessarly be in conflict.

A balance needs to be struck between different facets of life and at different stages in the lifecycle. Many of us spend too much time at paid work even though obituaries focus on other aspects of people’s lives. Many have too little paid work because of lack of jobs or inadequate skills. A high proportion of part-time workers would like more paid work if they had the opportunity because the working hours they currently have are inadequate to pay a living wage. For many, holding down a full-time job (and sometimes more than one job) is a fact of existence driven by economic necessity in spite of people’s family circumstances.

A feature of Irish social policy is heavy lip-service to ‘the family’ coupled with poor supports for parents and children including ‘lone parents’. Thankfully, times have changed and attitudes have shifted compared to an era of harsh judgment and treatment of mothers and their children by church and state. Still, residues of prejudice remain. This can be seen in the way the public debate about social protection payments for lone parents takes place. Lone parents are among the most vulnerable and poorest groups in society. Deprivation rates for the population as a whole have soared from 14% in 2008 to 31% in 2013 (and probably higher again in 2015). Deprivation is measured by the incidence of households who lack two more of a list of basic needs such as 2 pairs of shoes, a strong overcoat, meat or fish meal every second day, going without heating. In the case of lone parents (single adults with one or more children) deprivation rates increased from 50% in 2012 to 63% in 2013.

Seen in this context the continuing measures to reduce the income of lone parents with children over 7 years of age are of concern. Later this week, lone parents will be transferred to job seekers allowances with cuts in social payments varying from zero up to €140 per week in some cases. This will be catastrophic for some parents and children. It is no longer possible to blame the Troika for these measures. Neither is it possible to seek refuge under the pretext of there being no fiscal space. The Government plans to ‘give back’ €750 in income tax cuts in spite of a crisis in social services, health, education and childcare provision. The only remaining pretext is the ‘activation’ argument. But how well does this argument stand up? And is penalising parents in this way a wise and effective move?  A first principle of public policy must be ‘do no harm’.

How well thought out are these measures? How well coordinated are they with other social policies including, especially, childcare and training provision? Has a thorough poverty assessment been undertaken? Even if the majority of 30,000 lone parents will not be adversely affected many will and the impact could be disastrous in terms of human conditions for those involved.

And what is the situation in relation to ‘incentives to work’ (the main rationale for continuing with benefit cuts to lone parents)? The ‘net replacement rate’ provides a crude summary measure of ‘disincentive’ when benefits, withdrawn benefits and pay is factored in (but not childcare costs). The data summarised in indicator 5.5 in the latest NERI Quarterly Economic Facts shows that the Republic of Ireland has the third lowest replacement rate for single adults with children using a wage of 67% of the median as a benchmark (i.e. ‘incentives’ are third highest on this crude measure) for all EU States in 2013. Greece and the UK have the honour of recording slightly lower net replacement rates for lone parents. These numbers hardly constitute strong evidence of a major disincentive to paid work as a result of generous welfare payments.

A key problem, in Ireland, is childcare. But, it is not the only issue. While educational levels are high in the case of many lone parents, training supports are still vital for those who need them as well as reform of legislation and employment practice to provide greater upward flexibility of working hours especially when these do not entail a loss of income. Finding the magical 19 hours a week to qualify for Family Income Supplement (FIS) is a major difficulty in areas such as retail and accommodation and food where wage rates are very low. A common prejudice about lone parents is that they do not work in the labour market. Significant pockets of poverty exist among part-time working lone parents surviving on precarious hours and juggling paid work, caring for children and trying to meet bills and unforeseen bills.  While a jobseekers payment is based on number of days worked, the FIS is based on number of hours. Some parents are penalised for working too many days, but do not have enough working hours to qualify for FIS. A teacher might have 4 hours of work spread out over 4 days but not qualifiy for FIS. In 2015 45% of persons on one-parent family payment were in paid employment (full-time or part-time). 

It should be noted that  a new Jobseeker's Allowance transitional arrangement has been put in place for lone parents whose youngest child is aged 7-13. In some cases a parent could through an increase in working hours move from the transitational payment to FIS and avail of the 'back-to-work dividend' in which case they would be significantly better off. It all depends on circumstances and options for availing of additional hours.

The cuts to primary social welfare payments such as child benefit together with rising costs of educational courses, public transport and withdrawal of public services presents many parents with a nighmare in terms of survival. Add to this situation a child who may be sick or who presents particular behavioural difficulty and the task of the parent struggling on her own (it is usually a she) is unbearable. It is little surprise that a significant number of adults in this situation suffer from mental health difficulties.

it is still not too late to rethink policies...

There is time, still, to re-think a bad social policy of impoverishing lone parents that misses its target and causes collateral damage by way of higher poverty.  It is never too late to consider an alternative approach that includes serious level-investment in childcare, suitable vocational education with a strong social safety net to avoid poverty. The best way to escaping poverty is not just through paid work but through a living wage, a living income and strategic investments in education.  Parents need choice, flexibility and support where it is most needed. The value of all types of caring work should be acknowledged. A curious aspect of attempts to justify the latest welfare cuts to lone parents is the point that the scheme had failed to prevent high and increased levels of poverty and deprivation over the years back to the 1990s. The argument is made that the State needs to 'engage' more with welfare recipients to make sure that they take up employment.  This is only part of the story. A combination of recession, cuts to many welfare payments from 2009 onwards and a collapse in employment meant that lone parents along with others were more vulnerable than before. The continuing lack of affordable and accessible childcare is another problem. Instead of cutting allowances further as well as maintaining a low income disregard for eligibility a more sensible and humane approach would be to put the investment in by way of facilities and training so that lone parents have a meaninful choice. Pushing more people into poverty under the pretext that they will be better off in the longrun is not right. Indeed, the State may end up paying more anyway through the health and other social consequences of increasing poverty. In short, the reason why so many lone parents and their children live in poverty is not because welfare rates are too generous (clearly they are not) but because jobs are lacking and supports for working parents by means of the 'social wage' are abysmal. Punishing families financially will do nothing to address the fundamental root causes of poverty in these families.

However, there is one proviso to a more enlightened social policy approach as suggested  here – a sustained and adequate level of investment in social and income supports is not compatible with a policy of income tax cuts. Irish society needs to choose.  One thing is certain – the quality of children’s lives will shape the future of Irish society. Those of us aspiring to long life and adequacy of retirement income and care when our time comes will be cared for by the very children impacted, today, by our decisions and life choices. A strong inter-generational contract must be respected.

Do no harm is the first principle of sound social policy.

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