Supporting lone parents into work: The British Experience. Jane Hall Dept for Work and Pensions

Transcription

1 Supporting lone parents into work: The British Experience Jane Hall Dept for Work and Pensions

2 Overview Current number of lone parents in Great Britain Provision for lone parents from the 1990s - Work Focused Interviews (WFIs) - New Deal for Lone Parents (NDLP) Support for lone parents once they move into work Lone parent population and employment rate Lone parents and partnered mothers: A comparison Changes to the lone parent population and employment rate Research and evaluation evidence - NDLP - WFIs and Tax Credits Changes to lone parent policy since 2008

3 Current position There are around 1.9 million lone parents in GB Over 1 million lone parents are in work The lone parent employment rate is currently 57.3% 696,000 lone parents are claiming Income Support (IS) 59, 620 lone parents are claiming Jobseekers Allowance (JSA) Income Support (IS) is the main benefit that lone parents are eligible for. There are no mandatory requirements to look for work whilst on IS and it is regarded as an inactive benefit. Jobseekers Allowance (JSA) is the benefit that lone parents move to as their youngest child turns 10. Until November 2008, lone parents transferred to JSA once their youngest child turned 16, this was firstly reduced to 12 and will reduce further to 7 later this year. There are mandatory requirements to look for work and penalties are incurred if these requirements aren t met.

4 Summary: The story from the 1990 s. Early 1990 s very little support for lone parents New Deal for Lone Parents (NDLP) introduced nationally from October not been a static programme - changes to support and provision as a result of evaluation evidence and analysis Mandatory Work Focused Interviews (WFIs) were introduced from 2001 The support available to out-of-work lone parents, which is accessed through NDLP, has grown steadily over time In-work support (mainly financial) has also been introduced

5 Work Focused Interviews (WFIs) During the 1990s there was no formal mechanism for engaging with lone parents on benefits A mandatory requirement for lone parents to participate in a WFI as part of making a claim for Income Support (IS) was introduced in 2001 Since their introduction, WFIs have shown to be effective in engaging with lone parents, as a result the frequency of the WFI has increased over time They are held 6-monthly until the year before the lone parent is due to transfer to JSA, when they become quarterly The conversion rate from WFI to NDLP within 13 weeks is around 21 per cent WFI is the key gateway through which lone parents enter New Deal for Lone Parents (NDLP)

6 New Deal for Lone Parents (NDLP) NDLP is a voluntary programme that aims to help and encourage lone parents to improve their job readiness and employment opportunities Lone parents access provision, available under NDLP, via a Personal Adviser The Personal Adviser role was piloted in July 1997 and introduced nationally in October 1998 The role of the Personal Adviser has consistently found to be central to the success of measures to improve the lone parent employment rate All lone parents, at the point of their benefit claim, can volunteer to join NDLP and see a Personal Adviser, it is the PA who conducts the regular WFIs with them to help them enter/move closer to the labour market The intention is that the lone parent will see the same PA throughout their time on NDLP, as far as is possible Evidence shows that PAs who build good relationships with lone parents are the most successful in placing them in work

7 The package of support available on NDLP Via their PA, lone parents are able to access an individually tailored package of advice and support, including: Advice on vacancies, including a search on the Labour Market System Explaining the benefits available when they start working, including Working Tax Credit and Childcare Tax Credit Performing a Better of In Work Calculation Help applying for in-work benefits, if required Explaining what financial help is available during the transition to work Providing advice on the availability and range of formal childcare services available in the local areas Arranging work focused training or mentoring via the mainstream New Deals Help with travel costs when attending job interviews and training programmes

8 Provision available via NDLP For out-of-work lone parents, those participating in NDLP have access to: Work Trials: short periods, lasting for up to 15 days, with an employer for an actual job vacancy Training Premium: Paid at 15 per week, usually for a maximum of 52 weeks, when undertaking an approved activity Advisory Discretion Fund: whereby PAs have the discretion to award lone parents a maximum of 100 within a 12 month period to help with unexpected financial costs. It can not be used for childcare except to help with the payment of upfront costs for the first 2 weeks in work Access to Programme Centres: which deliver help in job search techniques and advice on alternative jobs, training and improving confidence

9 Provision available via NDLP For lone parents moving into work, those participating in NDLP have access to: Childcare Assist: Help with a week s registered childcare in the week before starting work, for a job of at least 8 hours per work Upon starting work, lone parents who have participated in NDLP and: have been on benefit for 26 weeks; are moving into a job of at least 16 hours per week; and the job will last for a minimum of 5 weeks, can access Housing Benefit and Council Tax Run-On (for 4 weeks) Mortgage Interest Run-On (for 4 weeks) Job Grant a non-taxable payment of 250

10 Support available once lone parents move into work Evaluation evidence has shown that a significant proportion of out-of-work lone parents were concerned about the level of income they would receive in work, especially during the transition period Tax Credits Child Tax Credits and Working Tax Credits were designed to tackle child poverty and make work pay In April 2008, over 1.1 million lone parents, in work for 16+ hours per week, were receiving Tax Credits At the same time 287,000 lone parents received help with childcare through the childcare element of Working Tax Credit and the average help was 68 per week In addition, 17,800 lone parents received the disabled worker element of WTC National Minimum Wage Introduced in April 1999 and sets hourly rates below which pay must not fall: year olds: 4.83 per hour ( 4.92 from October 2010) 21 and over: 5.80 per hour ( 5.93 from October 2010)

11 Support available once lone parents move into work In Work Credit Available to lone parents who have been on benefits for 12 months Payable for up to one year for those moving into work of 16+hours per week 60 per week in London; 40 per week elsewhere Early findings from Pilot Impact Assessment found a small positive impact. The number of lone parents receiving out-of-work benefits increased by 4.1 per cent after 12 months Impacts increased over time; 2 years post-implementation the number receiving out-of-work benefits was 7 per cent Only 16% of completed IWC claims returned to benefit within 6 months Pilot rolled-out nationally in 2008 In Work Emergency Discretion Fund Rolled out nationally, from April 2008 Provides in-work help in first 6 months of employment More than one payment can be made, but it is capped at 300 in 6 months

12 Summary of available support for lone parents ENGAGEMENT NDLP IN -WORK SUPPORT Day one entry for lone parents Basic skills Jobsearch Advice In Work Credit for lone parents Lone Parent Work Focused Interviews every 6 months on IS and then quarterly. Lone Parent Fortnightly Jobsearch Reviews, Personal Adviser Interviews and Work Focused Interviews. Mentoring Work Trials Travel Costs Debt Advice Training Premium/ Allowance Disability Employment Adviser Training Advice & Support Job Interview Guarantee In Work Advisory Support for lone parents In Work Emergency Discretion Fund for lone parents Better off In Work Credit Self referral via Jobcentre Enquiry or New Deal Hotline Options and Choices and Discovery Events Programme Centres Childcare Advice Childcare Costs Action Plans Childcare Subsidy Childcare Assist Adviser Discretion Fund Better Off Calculations Upfront Childcare Cost in London Emergency In Work Credit for Lone Parents Tax Credits, Housing & Council Tax Benefit Pre-employment work focused training Benefit run-ons Job Grant National ESOL in London Employment Zones Pilot New Deal Plus for Lone Parents pilots (including partners) Support available nationally as well as In Work Emergency Fund, In Work Advisory Support, Additional Childcare Managers & Admin Support, Enhance Adviser Training and voluntary contact.

13 Lone Parent population Since 1997 there has been a significant increase in both the number of lone parents and the number in employment. By 2009 there were 310,000 more lone parents in Great Britain and 365,000 more in work.. 2,000,000 1,800,000 1,600,000 No of LPs 1,400,000 1,200,000 1,000, ,000 Lone Parent Population Lone Parent Employment 600, , , Year Source: Household LFSQ2 datasets

14 Lone Parent employment rate.. as a result the lone parent employment rate has increased significantly by 12.1 percentage points. The increase in employment has been accompanied by a fall in the % of lone parents who are inactive (not in work or not looking for work) The employment rate has, however, levelled off in recent years. This has been associated with a rise in unemployment, with inactivity continuing to fall Percentage Lone Parent Employment Lone Parent Unemployment Lone Parent Inactivity Year Source: Household LFSQ2 datasets

15 Characteristics of lone parents and partnered mothers Lone parents are broadly similar to partnered mothers in their characteristics, although they are more likely to have no qualifications and have a disability. The most important difference appears to be that they are significantly more likely to be in social housing, rather than have a mortgage. Characteristics of Lone Parents and Partnered mothers % 90.0% 80.0% LPs Partnered mothers 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% to to and over Degree or equiv Higher Education GCE A Level or equiv GCSE grades A-C or equiv Other Qualification No Qual Owned Mortgage Social Housing Private Rented Any disability No disability White Mixed Asian Black Chinese Source: Household LFSQ2 datasets

16 Employment rate for lone parents and partnered mothers however, lone parents are less likely to be in employment regardless of their age, housing, disability and ethnicity. They are, however, more likely to be in work if they have a degree. The employment rate of Lone Parents and Partnered mothers % 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% to to and over Degree or equiv Higher Education GCE A Level or equiv GCSE grades A-C or equiv Other Qualification No Qual Owned Mortgage Social Housing Private Rented Any disability No disability White Mixed Asian 0.0% Black Chinese Lone parents Partnered mothers Source: Household LFSQ2 datasets

17 Changes to the composition of the lone parent population As the lone parent population has increased, the types of lone parent have changed... Lone Parents are now more likely to be older, have older children, and have qualifications compared to 1997: Lone parents on average have become older - the average age has increased from 34 to 37 between 1997 and Accordingly, the average age of the lone parents youngest child is increasing in 1997 over 35% had a youngest child under 5. This has fallen to just over 30% in More lone parents have higher qualifications. There has been an increase of 126,557 lone parents with GCSE grade A-C from However, lone parents are also now more likely to have a disability and be from an ethnic minority group (though the proportion is still low).

18 Changes in the employment rate by characteristic The lone parent employment has increased significantly regardless of characteristics, although less so for those with a disadvantage(s) Changes in the lone parent employment rate by Characteristic 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Single, never married Married, separated from husband/wife Divorced 0.0% to to and over GCE A Level or equiv GCSE grades A-C or equiv Other Qualification No Qual Owned Mortgage Social Housing Private Rented Under 5 5 to to or more Any Disability: of which No disability Ethnic min White Source: Household LFSQ2 datasets

19 Employment rate: Overall and for lone parents There are now over a million lone parents in work, and 365,00 more in work than in 1997, with the lone parent employment rate (57.3%) closing the gap with the overall Great Britain rate Employment rates for lone parents and overall: Great Britain 80 Employment rate (percent) Overall Great Britain rate Lone Parents Sources: Household LFSQ2 datasets; WPLS February datasets

20 The contribution of sustained employment The growth in lone parent employment since 1997 has been driven by lone parents staying in work, with significant growth in the number of lone parents in employment for 2 years or more. Flows into work have remained broadly stable 300, , , , ,000 Less than 3 months Between 3-6 months Between 6-12 months Between 1-2 years Between 2-5 years Between 5-10 years Between years 20 years or more 50, Source: Household LFSQ2 datasets

21 The UK s lone parent employment rate lags behind the OECD average Employment status of lone parents with children aged 0-14, 2007 Source: OECD, 2008

22 The link between lone parent employment and welfare reform The much faster increase in lone parent employment since 1997 is consistent with the introduction of welfare reform for lone parents The growth in lone parent employment from 1997 coincides with the introduction of NDLP and improved financial incentives through Working Families Tax Credit (replaced by Working Tax Credit). The continued, but slower growth, from 2001 to 2005 occurred during the roll-out of Work-Focused Interviews for lone parents Between 2005 and 2008, there have been a suite of pilots and smaller initiatives, but few significant additional measures which is reflected by the reduced growth in lone parent employment. Growth in LP employment: : 6.9 percentage points : 4.6 percentage points : 0.1 percentage points

23 Research and Evaluation evidence: New Deal There is significant evidence to show that the introduction of NDLP has made a significant contribution to the growth in lone parent employment since The initial NDLP evaluation (Lessof et al, 2003) found that NDLP contributed substantively to both an increased exit from IS and an increased entry into work. After 3-9 months, an extra 25 per cent of lone parents who had participated in NDLP had moved off IS. These additional benefit exits accounted for between 56 and 80 per cent of all lone parents moving off IS during this time. This initial evidence was confirmed in later studies of NDLP (Dolton et al, 2006) Dolton et al (in Knight et al, 2006) found that NDLP had a positive impact on lone parent employment but that additionality rates declined over time Cebulla, Flore and Greenberg (2008) estimated that NDLP increased the proportion of lone parents exiting Income Support by between 22 and 26 percentage points within 9 months of participating in the programme Since the introduction of NDLP in million lone parents have participated It has helped 645,000 lone parents move in to work Of those, 645,000 (just under 60 per cent) have moved into sustained jobs

24 Research and Evaluation evidence: Not just New Deal There is also substantial evidence to show that the introduction of Tax Credits and WFIs may have made a more significant contribution to the growth in lone parent employment since Thomas (2006) stated that the net impact of LPWFIs on entry to NDLP have been large and strongly statistically significant, indicating that the initiative has been reaching lone parents who would not otherwise have found their way into New Deal support Gregg, Harkness and Smith (2009) found that policy reform lay behind more than two thirds of the overall rise in lone parent employment between 1998 and 2003, while increasing the hours worked amongst those already in employment They also state that The New Deal is focused primarily on job entry where the gains to the reform have been the weakest; the impact on employment on transition into lone parenthood and the improvements in job retention among continuing lone parents suggest that WFTC has been the dominant driver of the employment gains Tax Credits have helped reduce the number of children living in poverty by 600,00 between 1998/99 and 2005/06

25 Changes to lone parent policy since 2008 IS remains the main benefit for lone parents Since November 2008, we have begun to lower the age of the youngest child (AYC) for which a lone parent can claim IS: November 2008 October 2009 October 2010 when youngest child turns 12, the lone parent must claim JSA when youngest child turns 10, the lone parent must claim JSA when youngest child turns 7, the lone parent must claim JSA It is estimated that as a result of these changes there will be an extra 75,000 lone parents in work and 70,000 fewer children in poverty than would otherwise have been the case within 5 years (to 2013) From 2010 onwards Possible pathfinder or pilot from October 2010, to increase work related activity for those with children aged 3-6 (lone parents and partners) Any further increase in conditionality.??

26 Flexibilities for lone parents on JSA Lone parents on the job seeker regime are supported by a wide package of preemployment and in-work support The aim is to help lone parents moving on to JSA, and subsequently into work, to balance their work and family life JSA regulations have been amended to include: - Reducing the number of hours for a lone parent seeking work to as low as 16 hours per week - Not penalising lone parents if they have genuine reasons/good cause for not complying with their obligations to seek/take-up work - Not penalising lone parents if they are unable to take up a job if appropriate, affordable child care is not available - Advisers must also take account of the wellbeing of the child when agreeing an action plan/jobseekers agreement with a parent or anyone else with responsibility for a child

27 LPO: forecasted increase in employment and decrease in benefits The introduction of LP obligations should also have a positive impact on lone parent employment, although the number it helps into work may be reduced in the economic downturn 100,000 50, , , ,000 Nov-08 Feb-09 Increase in employment and decrease in benefits than otherwise would have been the case Net Benefit Effect May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Net employment effect Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15