An uncertain future for Free School Meals
Thousands of low income families rely on Free School Meals, but the means-testing rules can create a real disincentive to work; unfortunately, this is set to get even worse when the new Universal Credit is introduced in 2013. Currently, families that get means-tested out of work benefits like Jobseeker’s Allowance qualify for Free School Meals for any children they have in school.
Low income working families can qualify, but only if they work under 16 hours per week (24 hours for couples) and earn less than £16,190 per year. This can create a substantial work disincentive since working families can lose the key benefit (worth around £370 per child per year) no matter how little they earn. In fact, of families in receipt of Free School Meals, who The Children’s Society surveyed for our report “Fair and Square: The future of Free School Meals” six out of ten said that the threat of the loss o f Free School Meals has a direct impact on their decisions about moving into work or taking on additional hours.
One working parent told us:
the difference between me working or not is about £40, half of which is now paid out in school meals. It has a huge impact.
It also means that an awful lot of children in poverty – around 700,000 – aren’t entitled to receive free school meals – often simply because their parents are in low paid work.
Following the introduction of Universal Credit from next year the eligibility criteria for FSM will need to be revised, (since many of the key benefits which currently determine entitlement will no longer exist for new claimants.)
This presents a great opportunity to extend free school meals to children in low income working families – to ensure that all children in poverty are entitled to a free school meal, and to get rid of the work disincentive effect. This could be achieved by extending free school meals to all children in families in receipt of Universal Credit.
However, it also presents the serious risk that work disincentives could become still worse than they are at present. Currently the government is considering determining free school meal entitlement under Universal Credit on the basis of an earnings threshold. This could create what is known as a benefit “cliff edge” where families are left considerably worse off as a result of an increase in pay or in working hours.
We estimate that if an earnings threshold of £7500 were used for free school meal entitlement, around 120,000 families (with around 350,000 school children in,) would be caught up in this cliff edge – left in the perverse position where they would be better off taking a pay cut in order to bring them back into entitlement for free school meals – exactly the kind of situation which Universal Credit was supposed to address.
This is why we have launched the “Fair and Square” petition to call on the government to extend free school meals to all children in families entitled to Universal Credit. Please follow this link and show your support.