With an unprecedented number of people out of work due to poor mental health, the Labour Government is facing an uphill battle to boost growth and productivity. But the Government’s welfare system is making the situation worse by further compromising the mental health of recipients of Universal Credit, argue Emma Tominey, Andy Baxter, Mandy Cheetham, Maria Marimpi, Steph Morris, Luke Munford, Ruth Patrick and Sophie Wickham. If Labour wants to get people back to work, it needs to first improve the mental health of those relying on the welfare system.
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After years of low or zero growth in the UK, the Labour government’s mission to boost productivity and growth risks being hampered by record high levels of workforce inactivity due to poor health. There is mounting evidence, produced independently by many different researchers across the UK, which tells us that the welfare system itself is causing harm to the mental health of claimants it is designed to help – and this is costing the labour market, the NHS and ultimately any ambitions for growth of the economy and of individuals. If Labour is serious about boosting productivity and growth and get people back into work, it needs to start with reforms that will improve the mental health of those relying on the welfare system.
Many of the welfare reforms since 2010 introduced against a backdrop of the 2008 recession and wider austerity policies, alongside cuts to local government spending. The primary aims of those welfare reforms – including Universal Credit, the two child limit, and benefit cap – were to reduce government welfare spending and strengthen incentives to work. These policies combined to make rules around benefit claims stricter and have changed (often reduced) benefit levels. But the very well established and strong link between poverty, stress and mental health has led researchers to ask to what extent these reforms are themselves contributing towards poor mental health of the working age population.
Universal Credit exacerbates mental health problems for people who are unemployed, but particularly so for lone parents.
Universal Credit harms claimant mental health
Academics across the country, working in several disciplines and using different methodologies come to very consistent conclusions that the legacy of the 2010 welfare reforms system exacerbates ill health, especially for those with complex needs, long term health conditions and disabilities.
A study using nationally representative longitudinal survey to explore the mental health impact of Universal Credit’s introduction for eligible unemployed people compared to an non-eligible group, estimating that nearly 64,000 of those eligible unemployed will have experienced clinically significant levels of psychological distress due to the introduction of Universal Credit. Of those, 21,760 may have even reached diagnostic thresholds for depression. Another study found that these mental health impacts are significantly worse for the more vulnerable claimants – lone parents and single adults. Mental health problems (including anxiety, depression and psychological issues) are already higher for lone parents compared to all adults in the study – at 21 per cent compared to 18 per cent. But when becoming unemployed and moving onto Universal Credit, mental health problems increase by 5 percentage points more compared to the former benefit system (shown in the graph below to be the Universal Credit effect). This takes the incidence of mental health problems for lone parents on UC up to 32 per cent compared to 28 per cent for all adults in receipt of Universal Credit. Universal Credit exacerbates mental health problems for people who are unemployed, but particularly so for lone parents. This is illustrated in Figure 1.
There is even growing evidence that the young children of claimants experience a reduction in mental health, with mechanisms identified in a separate study including awareness of their parents’ financial struggles along with the stigma and shame associated with benefits.
Emerging evidence using large survey data suggests that the psychological harms of Universal Credit may extend beyond unemployed claimants, reaching a wider cohort of individuals – including employed. Again, according to yet another paper the reduction in wellbeing and increased anxiety from Universal Credit is more pronounced among the more vulnerable – younger individuals, single-person households, people with disabilities, women, people with caring responsibilities, single parents, full-time students and people with a non-white ethnic background.
There is even growing evidence that the young children of claimants experience a reduction in mental health, with mechanisms identified in a separate study including awareness of their parents’ financial struggles along with the stigma and shame associated with benefits.
Why and how can the welfare system harm mental health?
Universal Credit processes, income insecurity, and conditionality
Existing and new research from conversations with Universal Credit claimants highlights the ways in which Universal Credit specifically affects claimants mental health. The digital claim and claim management process; the minimum 5 week wait for first payment; the financial precarity due to benefit inadequacy, deductions, and fluctuations in income; and fears/threats of sanctions play a large role in creating anxiety, worry and stress. Different researchers independently quantify the harm from Universal Credit implementation to account for around 50 per cent of the increase in mental health problems of those claiming Universal Credit. Both studies find these harms tend to be experienced more acutely by people with complex needs or health conditions, and/or less social and financial support or buffers (e.g. lone parents).
Different researchers independently quantify the harm from Universal Credit implementation to account for around 50 per cent of the increase in mental health problems of those claiming Universal Credit.
For lone parents on Universal Credit, the increased conditionality and work requirements is often experienced as stressful, anxiety inducing and incompatible with childcare responsibilities and push mothers into low wage insecure employment or onto sickness-related benefits. And when people with health conditions experience inappropriately implemented conditionality – attending jobcentre appointments whilst unwell; having claimant commitments that are not tailored to health issues and experiencing uncompassionate and distrustful interactions with staff via phone, journal or in-person; or being threatened with sanctions, they experience anxiety and worsened mental health conditions.
These findings and others strongly suggest that providing financial stability, a sense of feeling supported rather than pushed, punished or surveilled, and being treated with compassion and trust would reduce many of the harms people experienced, enable more effective mental health treatment and recovery, and therefore lead to less long-term costs of ill-health.
The evidence highlights that living without enough to get by causes chronic stress and can exacerbate existing mental health challenges.
Benefit inadequacy for families
Over and above the effect of the specific Universal Credit policies on claimants’ mental health, growing robust evidence has shown that the substantial reductions in benefit levels for targeted families has left a lasting scar. Analysis of the impact of the two-child limit and benefit cap on families with three or more children examined what happens when the social security system severs the link between “need” and “entitlement”. The benefit cap harmed mental health, with those affected by both policies reporting worsening anxiety and depression. The evidence highlights that living without enough to get by causes chronic stress and can exacerbate existing mental health challenges.
The wider cost to the economic growth, prosperity and to the NHS
The rates of the working age population out of the labour force owing to long-term sickness is at a record high, increasing by around 300,000 per year and mental health is one of the main causes of this growing inactivity. Emerging evidence tells us that this inactivity will damage the economy, the NHS and prospects for economic growth.
- Universal Credit induced impacts on mental health is keeping people out of the workforce. In extreme cases family members are also leaving the labour market as they need to provide unpaid care.
- The Bank of England Monetary Policy Committee quotes the low level of active workforce in some sectors as increasing wage inflation through labour hoarding, holding back the MPC from lowering interest rates with serious consequences for those in debt.
- Early analyses shows the mental health effects of Universal Credit is increasing demand for NHS Mental Health services – measured as an increase in hospital admittances for mental health related needs. These services are already at breaking point, and this extra demand is leading to significant financial pressure on already stretched budgets.
- Universal Credit induced impacts on mental health is keeping people out of the workforce. In extreme cases family members are also leaving the labour market as they need to provide unpaid care.
Policy Reform
We call for a three point evidence-based policy reform – for a welfare state that is kinder to those needing a safety net, whilst providing meaningful and effective help to those who need support and are ready to move into, or progress in employment:
1. Benefit adequacy: the welfare state should provide a safety net that protects claimants against poverty. We call for:
- removal of the benefit cap
- cancellation of the two child limit
- a reduction in the eligibility threshold for Universal Credit and Pension Credit.
2. Remove sanctions: the specific rules of UC sever trust between the job centre workers and claimants and increase poverty. They hinder rather than help job search efforts, and are long overdue a major overhaul. We call for reduced
- Reduce the length and severity of sanctions
- Remove sanctions for those with complex needs, health conditions and parents
3. Remove or limit conditionality to pre-2010 levels to restore financial wellbeing of the most vulnerable households including those with complex needs and lone parents
Our evidence adds weight to the calls for change over the past years.
Taken together, these measures could start the work of rebuilding our social security system, and create a safety net worthy of that name. The health and growth of our nation depends on it.
All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.
Image credit: 1000 Words Shutterstock
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