Women will be most impacted by new domestic rating measures

Women are more likely to be in receipt of social security benefits, more likely to be in low-paid, part-time and insecure work, more likely to be providing care either for children or other family members which limits their ability to carry out paid work and more likely to have to make up for cuts to public services through unpaid work. All these factors contribute to keeping women’s incomes generally lower over their lifetimes and therefore puts them at greater risk of living on a low-income and in poverty.

These existing gender inequalities have been worsened by the Covid19 pandemic, a decade of welfare reform and austerity policies that have hit women harder and now the Cost-of-Living Crisis is compounding the worsening situation for women. The impact of all these issues coming together has helped to create a perfect storm where women on the lowest incomes are struggling to meet their most basic needs, having to access foodbanks and expensive credit to afford essential items. This raises grave concerns for future generations and the costs and impacts to individuals, communities, the economy, education and health.

Women often bear the brunt of poverty in the home managing household budgets to shield their children from its worst effects. This means that women end up acting as the ‘shock absorbers’ of poverty going without food, heat or clothes in order to meet the needs of children and/or other family members when money is tight. These actions taken by women are often unseen within the home and given little attention or focus in terms of policy. Indeed, this has not been acknowledged in this consultation even though many women are likely to be considerably impacted by many of the proposed measures in this consultation and in other revenue raising consultations.

The following paragraphs highlight how women have been impacted by welfare reform and austerity policies, a constrained budget for Northern Ireland, the impact of debt and the Cost-of-Living Crisis. The points made in the following paragraphs should be considered in identifying the gendered impacts across the full range of revenue raising consultations.

Welfare Reform/Austerity Policies and Women

The safety net provided by the social security system has been weakened by a decade of welfare reform changes meaning that many people are unable to meet the costs of essential items such as food, heat and clothing and are unable to cope with unexpected life events such as a washing machine breaking down. Welfare reform and austerity policies have disproportionately impacted on women. Research by the House of Commons Library shows that 86% of the savings to the Treasury through tax and benefit changes since 2010 will have come from women.

In Northern Ireland an analysis of the impact of the reforms by the Northern Ireland Human Rights Commission (NIHRC)7 showed that across most income levels the overall cash impact of the reforms is more negative for women than for men. Their most striking finding was that households with children experience much larger losses as a result of the reforms than those without children. This is particularly the case for lone parents (who are mostly women) who lose £2,250 on average, equivalent to almost 10% of their net income.

Universal Credit and Women

There is substantial evidence that Universal Credit, and in particular problems with the five-week wait at the start of a Universal Credit claim, are causing widespread financial hardship, debt and increased reliance on food banks. Women’s Regional Consortium research on the Impact of Universal Credit on Women8 painted an overwhelmingly negative picture of life for women living on Universal Credit fraught with financial insecurity, worry, debt and in some cases cold and hunger.

The research found that almost all of the women reported negative impacts due to the five-week wait for Universal Credit. Many had needed to borrow money from family members/friends (61%) or lenders (25%) to survive. Some had been forced to cut back on food/essentials to make ends meet (53%) and others had resorted to selling their possessions (18%) or using a foodbank (21%). Others had reported getting behind with their bills (42%) and sadly some of the women reported that the five-week wait had impacted negatively on their children (39%) or that they had felt cold/hungry (30%) due to a lack of money.

Discretionary Support and Women

Changes to the Social Fund as a result of welfare reform have meant that there is less help available through the social security system for those with extreme, exceptional or crisis situations. Since the Social Fund has been replaced by Discretionary Support (DS) there has been a weakening of this safety net for the most vulnerable borrowers meaning that it no longer provides the support it once did.

Funding cuts across Departments has seen a reduction in the funding available for Discretionary Support grants with the Department for Communities emphasising that cuts will reduce the number of times and/or circumstances where help can be made available for those suffering financial hardship.9

Statistics show that 67% of those in receipt of Discretionary Support Grants are women. Reducing access to this important source of crisis help will therefore be particularly detrimental for women who are already suffering great financial pain as a result of welfare reform and the impact of the Cost-of-Living Crisis. It will also mean that those on the lowest incomes and some of the most vulnerable households in Northern Ireland will be driven to expensive and sometimes dangerous forms of lending.

Women and Debt

Borrowing and debt is far from gender neutral. As women’s incomes are generally lower over their lifetimes this leaves them more vulnerable to short-term financial problems or income shocks making them more likely to have to rely on borrowing and debt to make ends meet.

Research by the Women’s Regional Consortium10 on Women Living with Debt in Northern Ireland showed a significant amount of women reported having difficulty meeting their debt repayments and/or missing repayments (60%). The majority of the women’s borrowing had been to fund essential items or to make ends meet. It also found that many (51%) had resorted to high-cost lending. The impact of the Cost-of-Living Crisis on women’s debts was evident with 60% of the women reporting their debts had been impacted by rising energy prices and 60% also reporting their debts had been impacted by rising food prices.

Single parents are more likely to be impacted by financial hardship and debt. In Northern Ireland Census results show that the majority of single parent households are headed by a woman (93%). Research by the Joseph Rowntree Foundation11 has found that single parents are by far the most likely of any family type to be struggling with poverty. Further research by the Joseph Rowntree Foundation12 shows that the risk of living in very deep poverty has increased by a third for people in lone-parent families, to reach 19% or 900,000 people.

Low-income households are more likely to have to rely on high-cost credit as they are often unable to access cheaper forms of borrowing due to their low-income and/or other debts. Many of these borrowers are forced to use expensive forms of lending to buy essential goods and larger purchases they otherwise could not afford. This leaves these households vulnerable to exploitation through high interest charges, illegal lending and the likelihood of problem debt.

Some of the most vulnerable borrowers are forced into using illegal lending or ‘loan sharking’ because of a more urgent need for money. In Northern Ireland illegal lending is often linked with perceived paramilitary activity13. Research conducted by Advice NI on behalf of the Consumer Council14 in Northern Ireland has highlighted that one of the themes around illegal lending is low income and lack of access to mainstream credit. Two pieces of research by the Women’s Regional Consortium15 with women in Northern Ireland found examples of borrowing through loan sharks including paramilitaries.

Research by the University of Ulster found that Universal Credit was repeatedly described as a driver for illegal lending16 particularly around the harm caused by the five-week wait and issues with short-term benefits loans that were repaid from future benefits. This ensured that benefit claimants were often short of the funds they needed to support their household, leading them to look to other means of getting the money they needed.

An independent Review into Discretionary Support17 has found that it provides an important source of borrowing for those on the lowest incomes and can help to divert people from illegal lending such as paramilitaries. The Review found that 11% of their survey respondents (19 out of 172) said they managed the impact of not getting a Discretionary Support award by borrowing from a local money lender.

Lived Experiences of Women

The voices of those in poverty are often missed in these discussions around revenue raising. We have raised in the preceding paragraphs how women’s financial wellbeing has been impacted by a range of factors over the last number of years leaving those women on the lowest incomes struggling to afford the essentials and to be able to live dignified, healthy lives. It is abundantly clear from the wealth of evidence and research that many women and families are not in a position to be able to pay additional charges of any kind. Many of these women are already going without the essentials of life, including food and heat, to try and provide for their children and families. Asking these women to contribute to revenue raising is simply unconscionable.

The Women’s Regional Consortium has a wealth of lived experience from women who have taken part in our research. This is extremely valuable in illustrating the precarious financial situation of many women and families at the present time. We include a selection of quotes from the women who took part in Women’s Regional Consortium research on the impact of the Cost-of-Living Crisis to help Government understand the financial pressures women are facing and to ensure that their voices are front and centre of considerations around revenue raising. We also refer the Department to the addendum to the research paper: Quotes from Women’s Regional Consortium Focus Group Research on Women’s Experiences of the Cost-of-Living Crisis. We urge the Department to consider this lived experience carefully in making any decisions around revenue raising:

“We’re not living, we’re just existing.”

“I don’t understand them saying inflation is 10% sure the prices have doubled! Everything is going up more than that. Gas is the same it has at least doubled for me, I just can’t get out of the emergency.”

“I spent £30 on one bag of shopping which had about 6 items in it. It’s shocking. We’re all eating chicken strips and chips, that’s all we eat for 4 days is chicken strips because I can’t afford anything else.”

“I’ve had to sit in a cold apartment which is causing damp. I’ve had to wash in cold water and go without food.”

“I've had to skip meals to make sure my children eat or I just eat toast.”

“I’m having to borrow for the way I normally live. I used to have a certain amount of money to cover my ordinary bills but that’s not there anymore. I’ll have another week until I get paid so I’ll use my credit card to get whatever I need. It’s all essential stuff, it’s just for living.”

“I had £400 saved and I had to go into it, it’s gone. I put it away as a fund for my oldest. It’s horrible going into your kid’s money, I feel so guilty about it but we had to eat.”

This is an excerpt from WPG NI Response to Supplementary Consultation on Domestic Rating Measures