Impact of COVID 19 of families

Post date: 
21 July 2020
Written by: 

Kirsty McKechnie

Welfare rights adviser, Early Warning System

The Early Warning System was set up by CPAG in Scotland to collect and analyse case evidence about how social security changes are affecting the wellbeing of children, their families and the communities that support them. We have been closely monitoring emerging issues during the COVID-19 pandemic. This report concentrates on the impact of COVID on families living in Scotland and highlights that many families are struggling financially due to:

  • inadequate support from the social security system due to the benefit cap
  • tax credits awards stopping when a claim was made for universal credit (UC) to which the family were then not entitled, or were entitled to less money
  • no longer receiving amounts in benefits for 16 and 17 year olds who had left education, but who could not move into work or claim benefits in their own right
  • parents being unable to work while schools and childcare providers were closed
  • being asked to pay to retain a childcare place.

The case studies are collated from cases dealt with through our second tier advice service and submissions from frontline workers, including welfare rights advisors, housing officers and support workers.


Benefit cap

The benefit cap is a limit that has been placed by the UK government on the amount of benefit that can be paid to working age people. The cap is applied by reducing the amount of housing benefit (HB) or universal credit that you are entitled to. It is not applied if your earnings are high enough, or if someone in your household is entitled to working tax credit or a specified carer or disability benefit.

Unemployment and reduction in income through furlough has led to more families being affected by the cap. Predicted increases in unemployment will make it harder to escape. Delays in assessments for disability benefits during COVID have also contributed to some families not being able to escape the cap.

Universal credit and tax credits have been increased by £20 a week to help low income households during the pandemic, but the benefit cap has not been increased concurrently, which means the families with the lowest incomes are not benefiting from this increase.

A lone parent with four children moved from income support to UC when she started a part time job in February. This client's monthly earnings fall below the earnings threshold so the cap is applied and her UC is reduced by £220 a month and £95 to repay her UC advance. She will not benefit from the increase in the standard allowance because of the cap, or from the pause on deductions from UC because that does not include deductions to repay UC advances #561 (27/4/20)


A client with four children stopped work in February and applied to UC. She earned more than the benefit cap threshold for the last four years, but the benefit cap has been applied, on what appears to be DWP's calculations and interpretation of the legislation without regard to the policy intent, which allows a grace period of nine months before the cap is applied. The family have applied for DLA for one of the children, which if awarded, would exempt them from the cap, but assessment has been delayed due to COVID 19. #731 (06/05/20)


A couple with four children are subject to the benefit cap. They receive £1200 UC after £1188 is deducted for the cap and £178 for their UC advance. Their rent is £1000 a month leaving them with £200 to live on. The client lost his job when lockdown began. His wife was due to start a job but this has been postponed due to COVID 19. #1023 (28/5/20)


Migration to UC

A number of parents who were receiving tax credits claimed UC following a drop in their hours or income. They were either advised to make the UC claim, or not advised that in doing so that their tax credits would stop, and have subsequently found themselves worse off on UC or not entitled at all.

A widowed parent who was receiving tax credits started self-employment in January this year but had to stop working due to COVID 19. She contacted DWP who advised her to claim UC, however due to receiving widowed parent’s allowance and her husband's pension, her income is too high. She is not entitled to UC, but submitting the claim also stopped her tax credits award. #783 (12/5/20)


A couple with three children were receiving child tax credits, but after their self-employed work dried up due to COVID 19 they claimed UC. They were told at the Jobcentre that they would receive another payment of tax credits, but they did not receive any UC either, so they withdrew their claim for UC, only to find that they could not return to tax credits. They had to request a crisis grant from the Scottish Welfare Fund #413 (15/04/20)


A couple with three children were receiving tax credits but applied for UC and to the Self-Employed Income Support Scheme when dad had a loss of income due to COVID 19. One of the children is disabled and mum is their carer. They are worse off on UC than they were on tax credits #869 (18/05/20)


Parents of two disabled children were receiving tax credits but claimed UC when his self-employed income dropped, without realising, or being warned that they would lose their tax credits. The claim for UC was refused because he has just received £4.5K from the Self Employed Income Support Scheme. #1064 (01/06/20)



16 & 17 year olds

We received several cases about 16 or 17 year olds who are still living at home with their parents, who are not in education but have not been able to start work or training due to COVID 19. Their parents are no longer entitled to child benefit or tax credits for them, but the young people are not entitled to any benefits in their own right, putting a strain on the household’s income.

A lone parent's 17 year old daughter was due to start an apprenticeship in March but this was put on hold due to COVID 19. The daughter is no longer a qualifying young person for child benefit and, in addition, is not a dependent child for the purposes of UC, but neither does she fall into a category of 17 year olds who can claim UC themselves. Mum has been furloughed and will be entitled to a small amount of UC, but no additional amounts in respect of her daughter. #826 (14/05/20)


A recently reunited refugee family consists of a 34 year old, a 17 year old and two younger siblings. Their parents are deceased. The oldest sibling's UC includes child elements for the two youngest siblings but not for the 17 year old because he is not a qualifying young person for the purpose of benefits. He is on a waiting list to start an ESOL course but this has been further delayed by COVID 19. He tried to apply for UC himself bur was refused because he is not yet 18. #931 (21/5/20)



No childcare – no income

The Early Warning System has received a number of case studies concerning parents are facing job losses and financial hardship as they try to juggle employment and childcare responsibilities while schools and the majority of childcare providers have been closed.


A client with two children who had been furloughed, has now been told that she is expected back at work at the beginning of June. When she explained that she doesn’t have any childcare, she was told that she will have to take unpaid leave. #751 (07/05/20)


A lone parent key worker has been unable to get childcare for her two children as the local provision is full. She took two weeks sick leave but has been on unpaid leave ever since. She has been advised to claim UC just now and that she may lose her job if she cannot get childcare sorted out. #719 (06/05/20)


A lone parent with two children normally works 16 hours a week but has been unable to work since late March as her relatives who normally provide childcare are all NHS workers #941 (21/5/20)


A client has not received a shielding letter but is in a clinically vulnerable group who should observe stringent social distancing so she feels she cannot go to work. She cannot work from home due to the needs of her child. Her employer has refused to furlough her as there is work for her to do, but she cannot claim UC as her husband's earnings are too high. #948 (21/05/20)


A client who works for a local authority is finding it difficult to work from home and look after her children. She asked to be furloughed but was told this option is not available in the public sector #638 (30/04/20)



Childcare costs

We received a couple of case studies about childminders who had requested payment even though restrictions prevented them from operating. As a rule universal credit will not pay for childcare that has not been provided.


Client has been getting UC childcare element since the beginning of lockdown, but UC now say they won't pay it any more as shouldn't pay for childcare not provided (their message doesn't however imply that she has been overpaid). She hasn't actually received any childcare since beginning of April, but her childminder has continued to insist on a retainer, which she has paid. She is now on furlough, getting reduced earnings, she has continued to claim childcare costs throughout. #1152 (05/06/20)


Client was getting the UC childcare element but has been furloughed so now has her child at home. Child minder is asking for payment is lieu of giving 4 weeks’ notice that she would be removing her child and half payments to keep her place. It is unlikely that UC will reimburse the client for childcare that is not being provided #427 (15/04/20)


Contact us

If you have any queries about these findings, or the Early Warning System please contact:

Kirsty McKechnie

Email: [email protected]

Telephone: 01416117091

You can submit anonymous case studies online