«25 The Failure of Means-tested Benefits In addition to supplementary benefits, which is the principal means-tested scheme in the United Kingdom, there are ...»
The Failure of Means-tested Benefits
In addition to supplementary benefits, which is the principal means-tested scheme in
the United Kingdom, there are more than forty other means-tested schemes. There
are higher education awards; schemes for exemption from prescription charges,
dental charges and optical charges; free welfare milk and foods; free school meals;
rate rebates; rent rebates; local charges for residential accommodation for the elderly
and handicapped and homeless; local charges for home help, meals, day nursery, chiropody, convalescent and family planning services; school uniform and clothing grants; and maintenance allowances. Local authorities tend to vary in the way they administer some of these schemes, and even the kind of means test they apply. This chapter will show how far people living in poverty take advantage of these schemes, and in a long final section will attempt to go on to explain, and therefore to add to the discussion in the previous chapter, why some people do not receive benefits for which they are eligible.
In 1968, the government spent £421 million on supplementary benefits but the following was spent on other means-tested benefits: free school meals, about £25 million; rate rebates, £15 million, local authority rent rebates, £18 million, free welfare milk and food £7 million. There were a variety of other schemes, some of which cost very little by national standards. Thus, in 1970-71, the Department of Employment made 300 grants costing £10,000 to severely disabled people to provide special aids for employment; paid 180 disabled people an allowance to assist exceptional expenses in travelling to work at a cost of £29,000; and made ten grants to disabled people to help them start a small business at a total cost of £2,000.
Free School Meals Each local authority administers a government scheme making school meals free for children of parents receiving supplementary benefits or parents whose income is below certain limits laid down in national regulations. The limits are revised See written answers to parliamentary questions, Hansard, 3 and 5 August, 3 and 9 December 1971.
Written answer to a parliamentary question, Hansard, 16 November 1971, col. 90.
THE FAILURE OF MEANS-TESTED BENEFITS 861regularly, normally when supplementary benefit scales are increased. On 24 July 1967, Mr Patrick Gordon Walker announced a package of government decisions which included an increase from 5p to 7½p in the price of a school meal (from April
1968) as well as an increase in family allowances. He admitted that the government was anxious about parents who did not take up their entitlement. Later that year, a Department of Education and Science circular was sent to local-education authorities pointing out that some people failed to apply because of fear of identification of children who received free meals in the classroom. At the same time, a circular issued by the Scottish Education Department called attention to the humiliating practices adopted by some authorities. The department advised against handing out specially coloured tickets and said that, ‘in no case should pupils receiving meals free be required to enter the dining-room by an entrance other than that used by paying pupils, to sit at separate tables, or to receive different meals’.
Whether from embarrassment or lack of information, many parents had failed to apply for free meals. A survey carried out by the Ministry of Social Security and published in 1967 showed that, in 1966, two thirds of the children of fathers in fulltime work who were taking school meals were entitled to them free but were paying for them. Mr Gordon Walker then sent a circular letter to all parents of schoolchildren, reminding them that it was possible to apply for free school meals, and giving the income limits. A tear-off slip allowed potential applicants to get further information with a minimum of fuss. Although publicity had already resulted in a marked increase in numbers applying for free school meals, the circular letter had a marked initial effect. A similar exercise in May 1970 was marred by the omission of the tear-off slip. The numbers for each year in England and Wales and Scotland are given in Table 25.1. The increase in 1968 is partly attributable to the temporary provision for free meals for all children in large families, irrespective of income (withdrawn from April 1969), and also to the raising of the income exemption limits. The increase in 1971 is partly attributable to a further proportionate increase in the exemption limits. But the rises in price of school meals led to a sharp reduction in the number and percentage of children taking school meals, by no means all of it temporary. Thus in England and Wales the number taking meals fell from 5,148,000 (or 68 per cent) in September 1970, to 4,161,000 (or 54 per cent) in May 1971. With the exception of 1968, when the annual census was taken at the time of an influenza epidemic, a lower percentage of pupils in England and Wales than in Scotland received free meals. This may be due to there being more families Quoted in Lynes, T., ‘The Dinner Money Problem’, Poverty, No. 10, Spring 1969, p. 13.
Ministry of Social Security, Circumstances of Families, HMSO, London, 1967, p. 29.
Lynes, T., ‘The Failure of Selectivity’, in Bull, D. (ed.), Family Poverty, Duckworth, London, 1971.
Written answer, Hansard, 5 July 1971.
862 POVERTY IN THE UNITED KINGDOM Table 25.1. Numbers and percentages of school meals which are free.
with low incomes in Scotland, or higher take-up rates, or both.
Although the income levels up to which families are eligible to receive free school meals have broadly corresponded in the past with the supplementary benefit scales, the two sets of scales are by no means coincident. Thus, supplementary allowances but not allowances for school meals vary according to the age of each child. Again, disregarded earnings and hire-purchase commitments are treated differently in the two schemes. In the summer of 1968, a family with three children at school qualified for free school meals if family income after deducting rent and rates, fares to work, national-insurance contributions and the first £2 of the mother’s earnings was less than £12.65p a week. The comparable allowance from the Supplementary Benefits Commission, however, varied according to age of school-children from £10.80p to £14.95p. In October 1972, the figures were £20.40p a week and from £16.35p to £23.95p a week respectively. There are therefore two separate and uncoordinated means tests. Some families with a net income up to 20 per cent larger than the supplementary benefit for which they would become eligible if unemployed or sick, none the less qualify for free school meals for each child. Conversely, some families with a net income up to 20 per cent smaller fail to qualify for free school meals for each child.
THE FAILURE OF MEANS-TESTED BENEFITS 863Although the regulations governing the administration of free school meals do not lay down a definite period over which weekly pay should be averaged to determine eligibility, in practice, local education authorities usually work on the basis of four or five weekly pay-slips, or two months for monthly paid workers. Therefore, parents whose income over the year as a whole is below the minimum scales may find their children ineligible for free school meals at times when earnings are relatively high. Parents are also under the obligation to inform the local education authority if their circumstances change. The local education authorities have a free hand in deciding the period of the award of free school meals. Usually there is a review twice a year when new application forms are issued to all families in which children are receiving meals free. Thus, not only are parents subjected to a means test at least twice yearly, but for many of them the meals represent an uncertain source of indirect income. The introduction of provision only for an annual review irrespective of changes in circumstances in April 1973 reduced this uncertainty but only at the possible cost of making it less fair for that large number of families whose income fluctuates around the margins of eligibility.
Table 25.2 presents the two important sets of data about school-children in lowincome households - those not having meals and therefore either going home or Table 25.
2. Percentages of children in different household income groups who have or do not have school meals.
Hansard, 6 November 1972, col. 625.
864 POVERTY IN THE UNITED KINGDOM taking sandwiches, and those receiving meals free. Altogether only 70 per cent of school-children get meals at school. The correlation according to income is not at all marked. Proportionately more of the poorest children have meals at school, but there are still 15 per cent who do not. Another 33 per cent of the poorest children pay for meals. Thus, only half the children in the poorest families get meals free at school.
In some respects, Table 25.2 and other tables using net household income in the previous year as a criterion may under-represent take-up by poor families of meanstested benefits, but also in some respects may over-represent take-up. These limitations must be briefly listed. As already indicated, some families classified as having incomes under 100 per cent in Table 25.2 will include children all of whom are in their teens but, because supplementary benefit scales for teenagers are higher than the corresponding meals scales, will not be eligible for free school meals, whereas some classified as having incomes of between 100 per cent and 120 per cent, all of whom have only very young children, will be eligible to receive meals.
Unlike the supplementary benefits scheme, the school meals scheme is based on a means test making no allowance for the higher costs of bringing up older children.
Secondly, income is calculated for the household as a whole rather than for each income unit. This is one reason why some households with an income, say, of more than 40 per cent in excess of the basic supplementary benefit scales are none the less receiving school meals free. Thirdly, the incomes of some households are irregular.
Some with a low income for the year as a whole may have increased their income in, say, the past two months. Conversely, some with a high income for the year will now have tumbled to a very low income. We found that the numbers in these two groups tended to balance out, but that the means-tested scheme suffers seriously from ‘ assessment lag’. Thus, of all the children who were having school meals and who also were in poverty or had recent experience of poverty, 46 per cent were in families in poverty or on the margins of poverty both in the week preceding interview and for the year as a whole, but there were another 54 per cent from families in, or on, the margins of poverty, either in the preceding week or for the year as a whole. In the survey, none of the children in families tumbling the previous week into poverty or to its margins were yet receiving school meals free. All of them were still paying for meals. That is a significant finding. Finally, during the year of the survey, eligibility levels for free school meals were raised twice, supplementary benefit scales were increased once, the price of school meals was increased, and from April 1968 (but for one year only) all children in families with four or more children were entitled to free school meals irrespective of income.
In the summer of 1968, a child in a one-child family qualified for free school meals if net family income, including family allowances, and deducting fares, rent and rates, national insurance contributions and the first 40s. of any of the mother’s earnings, was less than £9.15p per week, and from October 1968, £9.75. Corresponding figures for each child in two- and threechild families were £11.10 and £11.60 and £12.65 and £13.45 respectively.
THE FAILURE OF MEANS-TESTED BENEFITS 865It would be difficult to make adjustments for all the factors listed above. Since Table 25.2 is based in substantial part on incomes received prior to the introduction in October 1968 of new supplementary benefit scales, it slightly underestimates the numbers in the lowest income groups. And because four-child families no longer became entitled automatically without means test to free school meals, the numbers of poor children getting free meals was in this respect higher than the numbers in subsequent years.
For these reasons, the proportion of children in the poorest income group found in the survey to be receiving school meals free will be high relative to the true figure in recent years, which therefore gives a more favourable impression of the efficiency of means tests than other criteria. Thus, the equivalent proportion of all children who are eligible (including all those in income groups close to the eligibility ceilings) and of children in families whose incomes are low in a particular week rather than in the year as a whole would be smaller. But the data none the less provide a basis for analysis and discussion.
Table 25.3 deals just with children having meals at school.
Altogether, 17.4 per cent were found not to be paying for them. This figure compares with the figures of
16.8 per cent for England and Wales and 17.2 per cent for Scotland given in official censuses. Only 61 per cent of the children in the poorest income group were getting meals free. They comprised only just over a quarter of all children getting meals Table 25.3. Percentages of children in different household income groups who receive free school meals.
free. Indeed, a third of children receiving meals free were in households with an income more than 40 per cent above the basic supplementary benefit scales. We were also able to examine the situation of children in families actually receiving supplementary benefits, and in families of the sick and unemployed who were eligible for supplementary benefits, when both groups had meals at school. Only 86 per cent of the former and 54 per cent of the latter were receiving free school meals.
This pattern applies to 1968 and the early part of 1969, and neither the official statistics about free school meals nor subsequent studies offer evidence which would lead to substantial modification. For example, a small-scale study in Islington in 1971 found that only 68 per cent of households eligible for free school meals were receiving them.
We also checked the relative incomes of the households in which the children having meals at school lived. When household income in the previous year was expressed as a percentage of the mean for its type, only 49 per cent of children in households with an income less than 80 per cent of the mean were found to be having meals free.
Government estimates that between 80 and 85 per cent of children who are entitled to free school meals are receiving them must be treated with extreme scepticism. These and similar estimates for other means-tested benefits seem to be inflated for the following reason. Estimates are based on the numbers and types of household found in the Family Expenditure Survey to have ‘normal incomes below particular levels. The results are then compared with the numbers receiving free meals, free welfare milk, allowances and so on. But the latter include income units with relatively low incomes in households with relatively high total incomes. They include households whose incomes are no longer low and whose eligibility for benefit may have been judged six months or more sooner. They also include households in which a child may recently have left school and so have ‘lost’ the right to entitlement for a second child.