Child poverty

This policy working paper is a response to the government's consultation paper on Measuring Child Poverty. The working paper argues that the government consultation paper is ‘conceptually completely inept and confused’. In particular, ‘it fails to recognise the fundamental distinction between measures of poverty and the characteristics of poor children and the associations and the consequences of poverty'.

An extra 200,000 children will be pushed into absolute poverty by the coalition's policy of capping annual increases in many benefits and tax credits, according to an estimate released by the Department for Work and Pensions (DWP). The estimate was uncovered by a freedom of information request submitted by the Child Poverty Action Group.

Defining absolute poverty as living on less than 60 per cent of median disposable household income as at 2010-11, uprated for inflation, the DWP gives a 'broad estimate' that around 200,000 extra children will be living in absolute poverty by the end of 2015-16 (the last year of the three-year cap on annual increases in most working-age benefits/tax credits).

Tax and benefit changes announced by the Chancellor in his 2012 Autumn Statement will mean an extra 200,000 children living in poverty by 2017-18, according to a new analysis from the Institute for Public Policy Research think tank.

The Autumn Statement announced several important changes to the tax and benefit system from April 2013 – including a higher personal tax allowance and a 1 per cent cap, for three years, on the annual uprating of most working-age benefits and tax credits.

A new analysis has shown that tax and benefit changes under the coalition government, combined with low wage growth, will leave 690,000 more children living below the minimum income standard by 2015.

The analysis was commissioned by the TUC from the independent Landman Economics consultancy. It examines the current and future impact of various tax and benefit changes since 2010 – including universal credit, direct and indirect tax changes and real wage growth – on the incomes of different households and family types.