Hard-working single mothers to lose £3,500 a year benefits

A “blind spot” in the new Universal Credit will leave struggling Scottish mothers who work longer hours at risk of being pushed below the breadline, according to a study by the charity Save the Children. A single mother with three children who works full-time on the minimum wage could see a drop in her income of about £67 a week, or £3,484 a year, under the changes, it is claimed.

Douglas Hamilton, Save the Children’s head of Scotland, said: “At a time when the economy is struggling and there are cuts to public services, these benefit changes will be a terrible blow to families up and down Scotland.

“In trying to reform the benefit system, the government is in danger of condemning a whole generation of Scottish children to a life of poverty.”

More than 100,000 children will also be pushed into poverty in Scotland by the end of the decade, as a result of separate cuts in the system to the way that benefits rates are increased year on year, the report adds.

“This would wipe all the progress that has been made since the late 1990s and significantly affect the nature and scale of demand for devolved services,” the report states.

The Universal Credit is the brainchild of former Conservative Party leader and the current Work and Pensions Secretary, Iain Duncan Smith. It was aimed at improving work incentives and boosting income for many working families.

Campaigners are now calling for Westminster to take action to ensure that the looming problems in the system are ironed out.

They want single working mothers to keep more of their income before losing benefits, as they are the only earner in the family. Second-earners should also be allowed to keep the first £2,000 of their earnings without losing any benefits, as main breadwinners do.

And campaigners also want 80 per cent of childcare costs for low-income parents covered – up from 70 per cent now – along with a more generous “taper” rate at which benefits are reduced as earnings increase, of 55 per cent.

The Scottish Government is also urged to use its powers to help to mitigate the effects of welfare reforms.

Mr Hamilton added: “Universal Credit will help some families, but mums working hard to stay above the breadline are its big blind spot. It’s incredibly hard bringing up three kids on £370 a week – losing almost a fifth of that will push many families over the edge.

“These are people who want to work to provide for their children while juggling soaring childcare and living costs. If we want to see more mums in the workplace and fewer children in poverty, then they need to be able to keep more of their incomes.”

The research found that about 200,000 household in Scotland will be better off by about £35 under the switch to universal credit, but about 170,000 households will be worse off.

Single-parents households will be badly hit, and with more than 96,000 single parents in Scotland, they are at “particular risk”.

Across the UK, a quarter of a million children will be pushed deeper into poverty by the coalition’s overhaul of the benefits system, the charity claims today.

Ahead of the Budget on 21 March, Save the Children is launching its Mums United campaign in collaboration with One Parent Families Scotland, Daycare Trust and Netmums to make work pay for mothers in poverty.

Satwat Rehman, director of One Parent Families Scotland said: “We know that female employment and child poverty are inextricably linked. In countries where child poverty is lower, there tends to be more women in work. We need to see a system that offers single working mums that choice.

“Unless we see movement on childcare and benefits for struggling working mums in this Budget, it could be too late for hundreds of thousands of children.”

But a spokesman for the Department for Work and Pensions rejected the findings.

A spokesman said: “Save the Children are wrong to assert that lone parents will lose as a result of the introduction of Universal Credit – the truth is 600,000 lone parents will be better off under a system which will incentivise work and make work pay.

“This is in stark contrast to the broken system this government inherited, which only rewards lone parents who work 16 hours or more,” he said. “Under Universal Credit, 80,000 more families, including lone parents, will be able to claim childcare support – no matter how few hours they work.”