Wages and welfare for adult social care workers

The Covid-19 pandemic has shone a light on the important work done by adult social care workers throughout the UK. Yet despite the country ‘clapping for carers’ during the pandemic, many adult social care workers face a tough winter ahead as Universal Credit is cut and living costs are rising.

Pay for adult social care workers

Last year there were 1.54 million people working in the adult social care sector in England. The median hourly pay for these workers was £9.01, only slightly higher than the National Living Wage of £8.91. Although pay for care workers has increased significantly over the last decade, it has not kept up with increases in other sectors. In 2012, the average pay for adult social care workers was higher than the average pay for retail assistants and cleaners; by 2020 this was no longer the case. This means that pay for care workers is now one of the lowest in the economy.

Pay and employment conditions vary considerably within the adult social care sector. Although some adult social care workers are employed directly by the NHS and local authorities, the majority (87%) are employed by private agencies or direct payment recipients. These private-sector employees are much more likely to be on zero-hours contracts and have lower pay than people employed by local authorities: in 2019, 10% of local authority employees were on zero-hours contracts compared to 36% of private-sector employees.

Whilst the flexible nature of zero-hours contracts is attractive to some workers, for example, those who are juggling work alongside studying or childcare, many of those on zero-hours contracts would prefer to be in more secure employment.

Universal Credit for adult social care workers

Many adult social care workers are eligible for Universal Credit to top up their household income. Eligibility for Universal Credit is based not only on someone’s pay but also on household characteristics such as where they live and whether or not they have children. For example, a part-time care worker who does not have children and does not pay rent is unlikely to be eligible for Universal Credit. In comparison, a part-time care worker who is renting from a private landlord and has two children is likely to be eligible for over £1,000 of Universal Credit per month.

Care workers who are eligible for support through Universal Credit often face problems due to the impact of recent welfare reforms. 50% of the adult social care workforce work part-time and many of these workers will be affected by the benefit cap, which reduces their income from benefits and increases their risk of poverty. Although households on Universal Credit who earn £617 or more per month are exempt from the cap, workers who earn less than this amount are affected. For example, a care worker who works 15 hours per week at the median pay will be affected by the benefit cap.

In addition, care workers who are on zero-hour contracts (24% of the workforce) often do not see support when they need it. Since Universal Credit is paid monthly in arrears, the Universal Credit award based on a month’s income is received the following month. This can result in a claimant receiving both low earnings and low Universal Credit (calculated on the previous higher-earning month) in the same month. This can make it difficult to budget on a low-income.

Looking ahead

Looking ahead to 2022, the picture is not bright for low-paid adult social care workers. An adult social care worker working 16 hours per week on the National Living Wage will be worse off by £35 per month in April 2022 compared to September 2021. This is because the loss of the Universal Credit uplift, the introduction of the Health and Social Care Levy and rising living costs outweigh the lower Universal Credit taper rate and higher National Living Wage.

Policy in Practice analysis found that lowering the taper rate in Universal Credit announced in the Autumn Budget will not offset the loss of the universal Credit uplift for part-time care workers. On average, households earning between £500 and £1,000 per month, which is most part-time care workers, will benefit by only £45 per month by the lower taper rate. In comparison, if the Universal Credit uplift were retained, they would be better off by £84 per month.

Recommendations

• Recommendation 1: Reintroduce the £20 per week uplift to Universal Credit to support low-paid care workers, including those who work part-time.
• Recommendation 2: Reform Universal Credit to support households who are in insecure work, including those on zero-hours contracts.
• Recommendation 3: More focus should be given to care workers on zero-hours contracts, to allow them to hold onto the flexibility of being able to work around other commitments such as childcare, but also give security to those who want it.

This article was first published on Thursday 2 December 2021 on FE News