It seems that, for as long as Government has existed, there has been a debate about how we help improve the lives of the poor (i.e. those eligible for welfare payments), whether they be single, single parents or one or two earner couples with children. Basically, it usually comes down to two supposedly mutually exclusive lines of argument. The first, get those who are poor and dependent on welfare into work, and the second, make sure that the welfare system is developed and generous enough to support the income of those who are out of work or those who struggle to make ends meet despite being in employment.

However, independent research (see for example work by Kitty Stewart and Linda Grant on lone parents entering work) has told us that it is actually a mixture of both these things that makes a difference to poorer individuals and parents. That is, sustained and reliable employment and suitable welfare support that takes into account costs associated with being in employment – childcare, for example.

Unfortunately, from what we can understand about the current situation, the motivations for gaining work in the first place are for some parents really quite low. The Government says that under its Universal Credit proposals, some families, for every extra pound they earn from employment, would only keep around 24 pence due to Income Tax, National Insurance contributions, loss in tax credits and loss of other means tested benefits. In CARE’s view, in practice some people will find it higher than that – this hardly represents a great incentive to enter work does it?

Furthermore, research published by the Daycare Trust this week shows that childcare costs for parents in employment are also staggeringly high, thus negating much of the potential benefit of being in work. Indeed, it is not surprising that more than half of the parents (58%) surveyed in the Daycare Trust research believe that due to high childcare costs (on average, more than £5,000 a year in England for a child under the age of two), they are no better off in work than out of it.

Given this evidence from both CARE and the Daycare Trust, I share the view of Kate Groucutt, Policy and Research Director of the Daycare Trust, that under the current welfare and tax system ‘work does not pay for many families’. More in my view needs to be done to ensure that poorer working parents both retain more of their wage and get better help from government in terms of the costs associated with being in employment. Until both of these (amongst other) issues begin to be rectified, poverty will continue to blight many families.