Breaking Free from Benefits
From a book by Julie Hawkins, Founder Single Mums' Business Network
Julie Hawkins is a single mum with a 10 year old child, Kaylyn. She tells her story in her book, "Breaking Out of the Benefits Jail".
She is now not on benefits but even as a skilled professional who had worked solidly between age 16 and 36, she had to take benefits when she became a single mum and found herself in a system in which she was trapped by a lot of barriers and reached a very low point. She describes the system as broken, trapping millions of people unnecessarily and great cost - both financially to the taxpayer and personally to individuals.
She describes her experience in a 85 minute webinar but I want to summarise some of her thoughts from her book as a result of her 'lived experience' of the system:
The barriers to work
Most women following childbirth face barriers to work that did not exist prior to becoming a primary carer. Julie had a full-time job, good salary, 10 years into paying a mortgage on her own home. During maternity leave, her request for reduced, pro-rata hours on return was declined as the employer did not want to set a precedent. She had to advise that she would not be returning to work due to inability to fit work and the commute into childcare hours.
Although Julie had several qualifications and a strong work ethic, she could only find part-time work at very low pay due to competition from millions of other intelligent, capable, experienced, qualified mothers seeking part-time work. Therefore she was forced to apply for Income Support, Housing Benefit, Council Tax Reduction. She had a low food budget and no disposable income. In a short space of time, her house was repossessed, trapping her in the private rental sector (with high rental costs due to many landlords not taking tenants on benefits) and further increasing outgoings and need for benefits. (WOTS - We do not pay mortgage interest in benefits to keep people in their homes, but we pay rents to landlords from benefits, thus paying their mortgages).
The cost to the economy is evident. Julie and millions like her need a 0.7 Full Time Equivalent (FTE) job. Instead of her paying tax on a 0.7FTE wage, the taxpayer was paying her benefits. She suggests that it is presenteeism and/or the 9-5 hours model demanded by employers that drives people to benefits and costs the economy billions. She suggests the Government legislate that 30% of the UK workforce must be employed 0.7FTE in every pay scale. This would increase corporate responsibility/social impact and save the taxpayer billions. (WOTS - Hasn't Covid taught us that flexibility works?)
Also we need to explore the possibility of a more modern school year. We are still operating a 19th century model in the 21st century.
The barriers to finance
Being on a low income, Julie's home was repossessed and her credit rating so damaged so that she could not access affordable consolidation of debt. Her only option was high interest loans to cover essential bills. She was advised to declare herself bankrupt but did not do so as she was determined to repay her debts. She persevered and, not wanting to be reliant on low-pay, started her own company alongside part-time work and studying for a law degree. She was however, only judged on credit score not on her work ethic, acumen or business potential. She was therefore unable to obtain finance to kick-start her business so had to keep claiming benefits.
She suggests that we need to tackle the credit scoring system that leaves millions of people without access to finance. Although we offer student loans, we need a similar scheme to offer self-employment or small business loans, underwritten by the Government, repaid through future earnings.
Equally, something needs to be done re bank charges and cost of bills due to lower income i.e address the poverty premium. For example, the wealthy can pay their bills annually and get a considerable discount. Banks profit from poverty, for example, charging for unpaid direct debits and they refuse to help people in poverty.
The barriers to home
Julie was a qualified estate and letting agent. As stated above, tenants with a poor credit score or in receipt of benefits were discriminated against. They have to turn to private, accidental landlords who don't go through a letting agent. Homes were either more expensive, short-term, in poor condition or unethical or unsafe in some other way. She and her daughter had to move several times. (WOTS - think of what this does to a young child). She was turned away from cheaper, more stable agent let properties over 100 times in 6 years of begging.
The irony is that if she had had some help with her mortgage in the first place, she could have saved her home, her child's secure future. Her rent (covered by benefits) was £200 more than her mortgage every month for 6 years. The cost to economy is significant. Not only costing the taxpayer but also eliminating savings for future pension which will mean more support needed in later years.
Could the Government use benefits to help people stay in their own home say for a time-limited period, especially given a previous good work record? Could private landlords be regulated more given benefit money is covering their mortgage? Could regular paying of rent offer grounds for a mortgage where credit score is low?
It is often perceived that a single mum has made bad choices or she is work-shy or uneducated. We must challenge this.
Single mums do not need upskilling, they need barriers removed so that they can use their skills and create their own stability and estate. They need work in sync with childcare. They need 100% finance to build their own businesses.
Final word from Julie; If you do not understand what holds people back and how easily that can be changed, that is forgivable, but once you know, you must do something about it.
For those of you in positions of power, to what extent can you change work, finance, home practices in order to remove the barriers above?
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From a book by Julie Hawkins, Founder Single Mums', 25/04/2023