Relying on the state, relying on each other
A hard copy of this report summary can be obtained by contacting Paul Noakes [E-Mail: Paul.Noakes@dwp.gsi.gov.uk] or by writing to him at the 'Social Research Division, Department for Work and Pensions, 4th Floor, Adelphi, 1-11 John Adam Street, London WC2N 6HT'.
Research Report No. 103
By Dawn Snape and Donna Molloy with Marion Kumar
This study explores the ways in which couples in receipt of either Jobseeker's Allowance (JSA) or Income Support (IS) manage their income. It was designed to explore patterns of management, control and allocation of benefit income; the implications of these patterns of financial organisation for individuals and households; and how different ways of paying and administering benefits may influence the allocation of financial roles and responsibilities within couples. The findings are based on in-depth interviews with 33 couples who were interviewed together and separately. The Qualitative Research Unit at the National Centre for Social Research carried out the research
The main findings are:
- Perceptions of entitlement to benefit income are affected by the administration of social security benefits. For example, among JSA claimants, the fact that only the named claimant (in over nine out of ten cases, the male partner) was identified on the giro cheques was thought to confer enhanced individual entitlement to the income.
- It was common for the female partner to be perceived as more capable of budgeting effectively and so to take responsibility for financial management. However, in these cases women managers tended to allocate less money to themselves than to their partners for personal expenditure and prioritised the needs of other household members above their own.
- Some of the couples in the study were unaware that they had any choice as to which partner was the named claimant or the ways in which benefit could be paid (i.e. by giro, order book, or electronic payment into a bank account). The main concern regarding modes of payment was the need to receive money predictably and reliably when living on a low income.
- Couples who received benefit payments by Automated Credit Transfer (ACT) found the system reliable and regular and that it provided continuity with their previous method of receiving wages directly into a bank or building society account, enabling them to continue with their established budgeting system. Those currently using giro or order books were resistant to changing their mode of payment to ACT.
- There was an overwhelming preference for weekly payments which were perceived as offering greater financial security and were thought to help with keeping expenditure within the limitations of a low income. There was also resistance to the possibility of a change to four-weekly payments on the grounds that it may not be possible to budget a low income effectively over this length of time.
- There was little support generally for the suggestion of splitting the benefit payment between each partner as it was perceived to run counter to the ethos of sharing and encouraging a sense of personal entitlement to the income. However, some saw this as eliminating the symbolic dependency of one partner on another and were therefore initially in favour of the idea.
- There is a diversity of approaches to household financial management among couples on benefit and that are there are a wide range of reasons why couples claim benefits as they do, but the current benefit system does little to reflect this diversity. The flexibility which already exists in the system could be communicated more clearly to benefit claimants and there is perhaps a need for greater flexibility in administering benefits.
Introduction
This study originated from a concern to ensure that methods of claiming and paying benefits adequately reflects the roles and responsibilities of women in couples. There was particular interest in understanding whether different methods of administering benefits affect perceptions of entitlement held by either partner, and whether there are implications for the level of access each member of a couple might have to the income.
Prior to the empirical work, a literature review was undertaken to identify gaps in existing literature. This identified a number of neglected issues which this study attempted to address. For example, previous work focused largely on married couples with dependent children while this study incorporated a wider range of circumstances including older couples, those with and without dependent children and couples from different minority ethnic groups. Different claimant situations were also explored including couples where the female is the named claimant and those where the male is named claimant.
The study involved in-depth interviews with 33 couples claiming either Jobseeker's Allowance or Income Support. Couples were interviewed jointly and then each partner was interviewed separately. The sample included couples who were married and cohabiting, both with and without dependent children; and who ranged in age and minority ethnic background. Some couples had been claiming social security benefits over a long period, while others were new to this experience and still adjusting to the change.
Patterns of claiming benefits
The findings of this study are consistent with earlier research indicating that income derived from benefits is perceived differently to earned income: benefit income had less strong notions of individual ownership attached to it than earned income; and income from benefits was sometimes less valued than earned income. The administration of social security benefits also impacted upon perceptions of entitlement to benefit income. For example, among JSA claimants, the fact that only the named claimant (usually the male partner) is identified on benefit cheques was thought to confer enhanced individual entitlement to the income.
A number of couples in the study were simultaneously receiving more than one benefit. Three different approaches to benefits claims were identified. Some couples nominated one of the partners (either male or female) to be the named claimant for all the benefits received by the household. A second approach was to divide benefit claims to reflect a traditional gendered division of labour, with the male being the named benefit claimant for the main subsistence benefit (i.e. Income Support or Jobseeker's Allowance) and the female partner claiming Child Benefit or another caring allowance such as Invalid Care Allowance. The last approach was to divide the claims between the partners along other lines, with each partner being the named claimant for part of the package of benefits.
The decision-making process to determine who within a couple should be the named claimant was often taken instinctively, with no awareness of choice at all. Those with strong adherence to traditional gender roles assumed that the male partner should be the named claimant, and mistakenly believed that the rules of the benefit system dictated this. Some respondents reported that they had actually been told which partner had to be the named claimant for JSA, even where both partners were looking for work.
Patterns of financial management and access to resources within households
Couples in the study used a range of different systems for allocating roles and responsibilities for financial organisation which were broadly in line with the typologies developed in earlier work on the intra-household allocation of resources. As with earlier research, it was common among the couples in this study for the female partner to be perceived as more capable of budgeting effectively and so take responsibility for financial management. Where women did manage the finances, they tended to allocate less money to themselves for personal expenditure than their partners and to prioritise the needs of other household members above their own.
Some couples accepted a division of domestic responsibilities according to traditional gender roles, however, adherence to these gender roles did not necessarily dictate which partner actually controlled or managed the finances. In some cases, financial responsibility was subsumed within the female partner's overall responsibility for the domestic sphere. In others, financial management was organised jointly. In the most traditional couples, financial responsibilities fell under the male partner's remit as head of the household.
Being the partner with primary responsibility for managing a low income, could have a number of psychological disadvantages, including stress and anxiety, particularly for women. However, these were counter-balanced to some extent by a greater sense of security about the finances if the more financially astute partner had taken control. Additionally, some women noted a greater sense of self-esteem through managing the finances effectively. By contrast, men who were unable to manage the finances sometimes reported a loss of self-esteem.
Whether couples were married or cohabiting did not appear to be an important influence on the allocation of financial roles within couples. Overall attitudes to the relationship, gender roles, individual skills and abilities and the balance of control between partners appeared to be more relevant than relationship status “per se”.
Use of financial products among couples on benefit
Previous research has shown that being in receipt of means-tested benefits is the biggest single factor (over and above income) in determining the likelihood that a household will be financially excluded (i.e. without any financial products at all).
The couples in this study who maintained bank accounts at the time of the research used them very differently. Some had become “inactive account users” by moving to a cash-based economy as they felt this would provide them with the greater level of control they needed to help them to cope on a low income. Others remained “active account users” and used their accounts regularly as an integral part of their financial management.
Use of and attitudes towards credit among the couples in this study was varied. Those who had never engaged with credit usage tended to have strong beliefs about living within one's means, although in times of absolute necessity they sometimes borrowed from family or friends. Those with a history of credit use varied in the extent to which they currently used credit. Some still actively used more than one source of credit, while others had considerably limited their credit use. In some couples where the male partner had found it difficult to restrict their spending with credit cards and had ceased using this type of credit, the female partner sometimes continued to have and use credit in her own right.
Implications for policy development
The current benefit system already contains a certain amount of flexibility as to which partner can be the named claimant, and the way in which the benefit is paid (i.e. by order book, giro, or electronic transfer into a bank account). One of the aims of this study was to explore the extent to which benefit claimants were aware of the existing choices and how they would react to other options.
Within this sample, some were unaware that they had any choice in the method by which they received their benefit payment and could not remember anyone ever explaining the options available. Others were aware of the alternatives and had made a conscious decision about how and to whom they wished the benefit(s) to be paid.
The main concern underpinning 'decisions' about modes of payment was the need to receive payments predictably and reliably when living on a low income. Different modes of payment were perceived as being more or less predictable by the couples in this study. The giro and order book tended to be the favoured methods of payment because the benefit could be drawn in cash and bills could be paid on the spot at the Post Office. Receiving the income in cash gave a sense of greater control over, and access to, funds and the familiarity of the routine provided a sense of security and continuity.
Claimants who currently received electronic payments into their bank accounts via Automated Credit Transfer (ACT) found the system reliable in terms of receiving a regular amount on the specified date. Payment by ACT provided continuity with their previous method of receiving wages directly into a bank or building society account and enabled them to persist with of other aspects of their established system of budgeting, such as payment of bills by direct debit.
There was some resistance to transferring the benefit payment method to ACT from those currently using more traditional methods of payment. Older couples, who preferred their established routine of accessing payment via the Post Office, were particularly reluctant to change. Factors influencing responses to a possible move to ACT as the normal method of payment included individual experience with and perceptions of banks, the perceived level of accessibility of the banking system and the degree of organisation couples had achieved in their budgeting routine. The more organised couples were with their budgeting, the more they tended to feel they could tolerate a change to an alternative system. However, a move to benefit payment by ACT was viewed as potentially disadvantageous even by those who had highly organised systems of household financial management. The main concerns were the lack of local banks (compared with Post Offices), the uncertainty of the payment being made on th e expected date and the consequent costs that may be incurred if the account went overdrawn, and the perception that ACT would limit their prompt access to cash.
There was an overwhelming preference for weekly payment which coincided with a tendency to budget on a weekly basis. Weekly payments were perceived as offering greater financial security because short budgeting periods were thought to provide an easy way of keeping expenditure within the limitations of a low income.
There were mixed views on the importance of continuing to stagger payments of different benefits over different payment periods. Some viewed this as extremely helpful and used weekly benefits to 'top-up' their income between payments received on a two-weekly basis. Others viewed it as a complication to their budgeting arrangements.
There was resistance to standardisation of benefit payment periods, particularly if this resulted in an overall increase in the time between payments. The possibility of a change to four-weekly payments was viewed negatively for a variety of reasons. There were doubts about whether it would be possible to budget a small and fixed income effectively over this length of time and concern about the ability to resist the temptation to overspend or to respond effectively to unexpected bills. Some respondents were worried that exceeding budget limits would lead to arrears, debts and a greater reliance on friends, family or money-lenders for loans. Finally, increased stress over the potential loss of budgeting control, and a need for a period of adjustment to a revised mode of managing a budget, were considered important factors.
Couples in this study were also asked to consider the possibility of receiving their current level benefit paid in two equal amounts paid to each partner. This was seen as a means of eliminating the symbolic dependency of one partner on the other and some were therefore were in favour of the idea. Indeed, some couples had already chosen to divide responsibility for claiming benefits between the two partners by electing to have part of their overall package of benefits paid to each partner.
However, respondents generally did not wish to change to splitting the benefit income itself. Despite its potential for boosting self-esteem and providing an independent income for each partner, benefit splitting was expected to pose a number of problems. For example, splitting the same amount of money into payments to each partner would run counter to the ethos of sharing and could encourage a sense of personal entitlement to the income. This could be detrimental to the household if acted upon by either partner. Where couples already embraced the idea of sharing the household income, benefit splitting was viewed as inconvenient and there were worries it could increase the possibility of delays in receiving the full household benefit allocation on the grounds that it was twice as likely that a mistake would be made.
Conclusions
The report concludes that there is a diversity of approaches to household financial management among couples on benefit and that are there are a wide range of reasons why couples claim benefits as they do, but the current benefit system does little to reflect this diversity. The flexibility which already exists in the system could be communicated more clearly to benefit claimants and there is perhaps a need for greater flexibility in administering benefits.
Relevant publications
Molloy D and Snape D (1999) “Financial Arrangements of Couples on Benefit: A Review of the Literature,” In-house Report No 58, London: DSS.