Coronavirus Crisis Highlights the Failures of Our Welfare System

Child Poverty Action Group calls on the Government to fix the welfare system so everyone, not just the forestry workers who have lost their jobs due to the coronavirus, receive adequate support.

Associate Professor Susan St John says, "The coronavirus crisis highlights one of the biggest failures of our welfare system: newly out-of-work families are being hit twice. First by losing their jobs and there is a very inadequate safety net of welfare support, and then again when they lose their work-based tax credits for their children because they no longer have enough hours of paid work."

In recognising the deficiencies of our welfare system the government has agreed to waiver the stand-down period for income support, but just for those whose work is affected by Covid-19. CPAG urges the government to go much further.

Forestry workers who have lost work through no fault of their own, either on or off a benefit, are excluded from the In-Work Tax Credit for their children. At very least, just as after the earthquake in 2010 under the Restart programme, these families ought to be able to retain the In-Work Tax Credit.

Child Poverty Action Group has continuously called for the poorly-designed, discriminatory In-Work Tax Credit to be extended to all low-income families. Although it is intended as a payment for children, it is also meant to act as a work incentive and as such, children are only eligible for the credit if their parents are "off benefit" and meet the work-test criteria (20 hours of paid work for sole parents and 30 hours combined for two-parent families).

"Dispensation from the work-criteria shouldn't just apply to forestry workers. Meaningful reform to the In-Work Tax Credit is well overdue. There is much unconscious bias in the current system and our suggested reforms would greatly simplify an unworkable system that has not delivered on child poverty reduction", adds St John.

The In-Work Tax Credit should be given to every low-income family. The State should not be penalising families for losing paid work. The current Covid-19 virus crisis offers an opportunity for transformational change.