Social Security and Welfare Reform

Working Families Receiving Benefits

  • Published 15th May 2013
  • Authors: Peter Kenway,
  • Category: Social Security and Welfare Reform

Deafened by the interminable call for reforms to ‘make work pay’, it is easy to forget that plenty of families receiving state benefits of various kinds are already working. To resist this forgetfulness, this report provides estimates of the total number of working families getting such benefits. The complication (which is why a report is needed and why its results are only estimates) is that simply adding up government statistics on the numbers receiving each benefit in isolation won’t do because that would double count all those who receive more than one.

‘Working families’

Although the definition of ‘working’ varies a bit between the different data sources used for the report, the common sense idea – that at least one of the adults in the family is doing paid work – is a good enough approximation. The term ‘family’ includes single adults and couples as well as parents with children. But a child who has left school, even if they are still living at home, doesn’t count as part of the parental family but is, instead, another ‘family’ in their own right.

Which benefits have been included?

The main focus is on three benefits: housing benefit (HB), council tax benefit (CTB) and working and child tax credits (WTC and CTC). Supporting estimates are also provided for several others, namely disability living allowance (DLA), income support (IS), jobseeker’s allowance (JSA) and employment and support allowance (ESA) along with its predecessor incapacity benefit (IB).

Although it is true that JSA and ESA are benefits for people who are not working, the contributory versions can be claimed by members of working families because the earnings of the still working partner have no impact on the amount of benefit. Even the means-tested versions – and IS – can be claimed by families where total family earnings remain below a certain threshold.

This list does not include all the benefits that working families can receive. Two that are not included are carer’s allowance and statutory maternity pay. Child benefit, which until this year went to all families with dependent children, is also not included.

Key findings

In 2012, some 4,300,000 working families were estimated to have been receiving one or more of these benefits. Figure 1 presents a breakdown of this total. In 2012:

  • 3,230,000 working families were receiving tax credits. This number was down by about 1,400,000 (almost a third) from what it was in 2008. Most of this fall occurred in 2011 and 2012, due mainly to the abolition of the family-only element of child tax credits.
  • 930,000 working families were receiving housing benefit. Up 490,000 since 2008, the number of working families getting housing benefit more than doubled over four years.
  • 790,000 working families were receiving council tax benefit, up 430,000 since 2008. Here too, the number of working families receiving this benefit more than doubled over this period.
  • Taking account of the overlaps, it is estimated that in addition to the 3,230,000 receiving tax credits, a further 420,000 working families were receiving housing benefit and/or council tax benefit but not tax credits.
  • On top of this, another 380,000 working families who got neither HB, CTB nor tax credits received DLA. A further 270,000 working families who got neither HB, CTB, tax credits nor DLA did receive either ESA (or IB), JSA or IS. 

About this report
This report was commissioned by the Joseph Rowntree Foundation and written by Peter Kenway. All responsibility for errors, omissions and opinions rests with the author alone.