Universal Credit and Free School Meals
(this article first appeared in Adviser magazine, 185, July 2018)
Richard Machin explores the revised eligibility criteria for free school meals introduced as a result of the rollout of Universal Credit, and looks at the potential winners and losers under the revised rules.
The Education Act 1996[i] requires all schools and academies to provide free school meals (FSMs)to disadvantaged children between the ages of five and 16. As we witness the continuing rollout of Universal Credit (UC) there have been some important changes to the eligibility criteria for FSMs.
The legacy benefits position
Parents did not have to pay for school lunches if they were in receipt of one of a range of legacy means-tested benefits which are being phased out as a result of the introduction of UC: Income Support, Income-based Job Seekers Allowance, Income-related Employment and Support Allowance, Child Tax Credit with no entitlement to Working Tax Credit (apart from the 4 week run-on) and a household income of less than £16,190[ii]. Entitlement to FSMs was also linked to payment of the Guarantee Credit element of Pension Credit or receipt of financial support under part VI of the Immigration and Asylum Act 1999. Additionally from April 2013, all UC claimants were entitled to FSMs. However, the government made it clear that this was a temporary measure and these interim arrangements have been replaced by new UC rules described below.
The Universal Credit position
Claimants in receipt of the legacy benefits described above continue to be eligible for free school meals while these benefits are in payment.
England: The Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations[iii] 2018 came into force on 01 April 2018 and make changes for parents in receipt of UC in England. Entitlement to FSMs is now available to parents in receipt of universal credit who have annual net earnings (after income tax, national insurance and deductions for pension contributions) of £7,400 or less. Significantly the £7,400 threshold is frozen until the rollout of UC is complete and, therefore, will not be reviewed until 2022. The government believe that this threshold will typically equate to an average household income of between £18,000 and £24,000[iv] when other benefit income is factored in, and create a fair system which is administratively straightforward.
Northern Ireland: The earnings limit for UC claimants has been set at £14,000, with effect from 27 September 2017 (Arrangements for the provision of Milk, Meals and Related Facilities — Articles 58 and 59 of the Education and Libraries (Northern Ireland) Order 1986, as amended)[v].
Scotland: The earnings limit for universal credit claimants is £610 per month, with effect from 01 August 2017 (The Welfare Reform (Consequential Amendments) (Scotland) Regulations 2017).[vi]
Wales: An earnings limit has not been set in Wales, meaning all universal credit claimants will be entitled to FSMs regardless of income from earnings.
Checking eligibility and the earnings threshold
A pupil is only eligible for FSMs when a claim has been made on their behalf and this has been verified by the school. All schools (including maintained schools, academies and free schools) have access to the Department for Education’s Eligibility Checking System (ECS), an online portal holding data from the Department for Work and Pensions, the Home Office and the HM Revenue and Customs. A parent can challenge the information held by the ECS if they believe that it is inaccurate and in these circumstances must provide paper-based evidence to the local authority. During the UC rollout period the transitional arrangements described below mean that ongoing eligibility checks are not required[vii].
The £7,400 earnings threshold is calculated over a ‘relevant period’ which can be one, two or three UC assessment periods immediately preceding the FSM claim. Firstly a FSM applicant will be checked for monthly income of no more than £616.67 (a twelfth of £7,400) in their most recent UC assessment period. If earned income in this initial period exceeds the threshold a check will be carried out to assess if earned income in the two most recent assessment periods does not exceed £1,233.34 (a sixth of £7,400). Finally, if earned income exceeds the threshold in the two most recent assessment periods a calculation of income in the three assessment periods prior to the claim will be completed to check if income does not exceed £1,850 (a quarter of £7,400). Claimants who do not meet any of the above criteria will not be eligible for FSMs[viii].
Transitional arrangements
The government states that protection will be provided for families who would otherwise lose eligibility as a result of these changes, and for those who become eligible during the rollout of UC. The following transitional arrangements have been introduced under the Welfare Reform Act 2012 (Commencement №30 and Transitory Provisions) Order 2018[ix]:
1. From April 2018 all existing claimants will continue to receive FSMs until UC is fully rolled out (expected date 31 March 2022). This applies even if earnings increase over the prescribed threshold of £7,400.
2. Any child who gains eligibility for FSMs after April 2018 will continue to receive them until UC is rolled out. This applies even if they cease to meet the eligibility criteria during the rollout period.
3. Once UC is fully rolled out any existing claimants who no longer meet the eligibility criteria because earnings have risen above the threshold, will continue to receive FSMs until the end of their current phase of education (either primary or secondary).
4. New claimants earning above the threshold after April 2018 will not be eligible for FSMs.
5. The transitional protection rules apply to individual children in a family meaning younger siblings will not automatically become entitled to FSMs because an older sibling is in receipt of transitional protection. Younger siblings must meet the eligibility criteria for FSMs at the time of application.
Some claimants will not see any changes as a result of the new UC FSMs rules:
· FSMs will continue to be provided to children whose parents receive support under Part VI of the Immigration and Asylum Act 199 or the Guarantee Element of Pension Credit as this benefit is not being replaced by UC.
· Universal Infant Free School Meals (UIFSM)[x] — since September 2014 all state funded schools in England and Scotland have been required to provide free school lunches to pupils in reception, year 1 and year 2. The Universal Infant Free School Meals (UIFSM) policy was introduced by the then Deputy Prime Minister Nick Clegg under Section 106 of the Children and Families Act 2014, with the aim of improving educational attainment through the provision of a nutritious lunchtime meal. UIFSMs will continue to be provided in England and Scotland.
Numbers affected by this policy
There has been a significant amount of debate about the impact of the new UC FSMs policy. The Children’s Society have campaigned for all UC claimants to remain entitled to FSMs, as was the case during the interim period when universal credit was first introduced. It calculates that an additional 1.1 million children would be entitled to FSMs if the interim arrangements were carried forward instead of the £7,400 earnings limit being introduced (this assumes an overall take-up rate of FSMs of 65.1%)[xi].
The government argue that this is a false comparison as it was never the intention that the interim arrangements became something more permanent. The Department for Education (DfE) state that the impact of this policy can only be accurately assessed by comparing the positon under the legacy benefits with the new restrictions that are applied to UC claimants. The DfE estimate that around 50,000 more children will be entitled to a FSM under the new rules as compared to the legacy rules:
‘This figure represents the difference between those that gain eligibility under UC to those that would have been eligible under the old system but will not now be eligible under UC. It also takes account of the fact that not everybody claims their meal. This figure does not include children that retain free school meals as a result of the transitional protections’[xii]
The Institute for Fiscal Studies (IFS) has completed an assessment of the likely winners and losers of this policy as the DfE figures give only a headline figure but do not detail individual groups of claimants who may gain or lose entitlement to FSMs (again this analysis is of the new system as compared to the legacy system and not a comparison with the interim arrangements as completed by the Children’s Society)[xiii]. Interestingly, the IFS analysis produces very similar results to the official government estimates stating that around 50,000 more children will become entitled to FSMs as a result of the new rules (with additional costs to the exchequer of £20–30 million per year). Its more nuanced analysis reveals that, behind this net change, we should expect around 160,000 children to lose entitlement and around 210,000 to gain entitlement.
The IFS states that children living with at least one parent in paid work generally gain from the new rules with approximately 140,000 additional entitlements for this household composition. Conversely, around 90,000 children in families without work stand to lose entitlement to FSMs. Even within working families there are variances, with those who are working more hours on lower hourly wages standing to gain from the new FSM rules and those working a low number of hours on higher wages standing to lose. Interestingly the children of lone parents entirely account for the net increase in eligibility with an estimated 60,000 new FSM entitlements.
Finally the IFS highlight the importance of the decision to freeze the £7,400 earnings threshold until UC is fully rolled out (2022). If this threshold was uprated in line with earnings an additional 100,000 children would be entitled to FSMs by the end of the rollout period and if the threshold was uprated in line with the consumer price index approximately 80,000 extra children would be entitled to FSMs.
The effectiveness of free school meals
The eligibility criteria for FSMs have long been debated and the new rules do not remove the so-called ‘cliff-edge’ of entitlement- they simply shift it. To what extent then are FSMs effective in meeting the needs of poorest pupils? The IFS[xiv] calculate that there will be a negligible effect on children from the poorest fifth of households. Under the revised rules, as was the case under the legacy rules, fewer than half of the children in the lowest income quintile will be entitled to FSMs. It remains to be seen if there will be an increase in take-up of free school meals as a result of the roll-out of UC.
Ostensibly universal credit creates a more streamlined and simplified means-tested benefits system. However, as has been widely discussed in Adviser and elsewhere, many of the inherent complexities of the legacy benefits system have been duplicated under UC. Parents will still need to make a claim to their local authority for FSMs. In 2014 the National Association of Welfare Rights Advisers [xv] carried out an audit of eleven local authority websites and found that seven were displaying incorrect information in relation to the criteria for FSMs. The new FSM rules pose a challenge to local authorities to clearly communicate the revised criteria and encourage take-up. Assessment of fluctuating earnings may be particularly problematic for local authorities to manage.
Analysis undertaken by York University with the Children’s Society and Child Poverty Action Group (CPAG) found that FSMS are worth just over £400 per child, per year. It reports that the long-term impact of the new FSMs policy (when transitional protection ends) will be that one million children living in relative poverty will have no entitlement to free school lunches. To arrive at this figure, the study used retrospective official poverty data (households below average income for 2015/16) and projected figures on the numbers estimated to be entitled to FSMs when the policy is fully rolled-out (DfE figures). The study found that there are an estimated 1.7 million children in years three and above who are living in poverty, compared to 700,000 children who will be entitled to FSMs on the full roll-out of the new policy. [xvi]
Both CPAG and the Children’s Society have campaigned for entitlement to FSMs to be linked solely to UC entitlement and for the earnings threshold to be removed; it is estimated that this would cost an additional £500 million per year[xvii]. Both organisations point to the health and educational benefits that are associated with FSMs. Furthermore, they believe that the FSM earnings threshold creates a poverty trap and has a negative impact on work incentives, thus undermining the core principles that lie at the heart of UC:
‘Families who increase their earnings marginally so that they exceed the threshold, could then be plunged into financial difficulty by the additional costs’[xviii]
For example, CPAG calculate that a single parent with two children working 16 hours per week and earning the National Living Wage, would be £200 a year worse off by increasing their hours to 20 per week because of reduced entitlement to UC and the removal of entitlement to FSMs worth over £800 per year for the two children[xix]. Extending FSM entitlement to all UC claimants would remove the fixed-income threshold that does not take into account family size (although from April 2017 UC itself has a 2-child limit for all claimants who do not have transitional protection).
An analysis of the new rules for FSMs should be contextualised with reference to the broader welfare reform agenda. A 2017 report by the Local Government Association and the Learning and Work Institute[xx] found that vulnerable groups are heavily affected by multiple welfare reforms. Amongst these vulnerable groups are families with children, with over 84% of working-age households that see an income loss of over £50 per week having children.
The IFS[xxi] analysis indicates that workless families with children are particularly badly hit by both changes to UC and the new FSM rules. CPAG highlights that cuts to UC introduced in the last two years have had a particularly negative impact on larger families (with three or more children) and that it is these families who also stand to lose the most from the revised FSM rules. Increasing levels of food poverty have been closely linked with cuts to welfare benefits and the vulnerabilities created by a shrinking welfare state make the need for an appropriate and comprehensive FSM programme even greater.
The End Hunger UK movement[xxii] has called on the government to start measuring household food insecurity in the UK (when an individual or household has insufficient or insecure access to food due to resource constraints). There are two established tools for measuring food insecurity (one of which the USDA Food Insecurity Assessment is routinely used in both the US and Canada). An assessment of the adequacy of FSMs would certainly be aided by the accurate measurement of UK food insecurity.
[i] The Education Act 1996, available at: https://www.legislation.gov.uk/ukpga/1996/56/contents
[ii] Section 512ZB of the Education Act 1996, available at: https://www.legislation.gov.uk/ukpga/1996/56/section/512ZB
[iii] The Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations, available at: http://www.legislation.gov.uk/uksi/2018/148/contents/made
[iv] House of Commons briefing paper — School meals and nutritional standards (England) (2018), available at: https://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN04195
[v] Arrangements for the provision of Milk, Meals and Related Facilities — Articles 58 and 59 of the Education and Libraries (Northern Ireland) Order 1986, as amended, available at: https://www.education-ni.gov.uk/sites/default/files/publications/education/EA%20Arrangements%20for%20the%20Provision%20of%20Milk%2C%20Meals%20and%20Related%20Facilities%20-%20with%20effect%20from%2027%20September%202017.PDF
[vi] The Welfare Reform (Consequential Amendments) (Scotland) Regulations 2017, available at: http://www.legislation.gov.uk/ssi/2017/182/made
[vii] Department for Education: Free school meals Guidance for local authorities, maintained schools, academies and free schools (2018), available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/700139/Free_school_meals_guidance_Apr18.pdf
[viii] See note 3
[ix] The Welfare Reform Act 2012 (Commencement №30 and Transitory Provisions) Order 2018, available at: http://www.legislation.gov.uk/uksi/2018/145/made
[x] Children and Families Act 2014 (Provision of free school lunches), available at: http://www.legislation.gov.uk/ukpga/2014/6/section/106/enacted
[xi] Children’s Society (2018). Government consultation on eligibility for free school meals and the early years pupil premium under Universal Credit, available at: https://www.childrenssociety.org.uk/sites/default/files/uc-fsm-tcs-consultation-response-9-jan-2018-final.pdf
[xii] Department for Education (2018), available at: https://publications.parliament.uk/pa/ld201719/ldselect/ldsecleg/82/8206.htm
[xiii] Institute for Fiscal Studies (2018). Free school meals under universal credit, available at https://www.ifs.org.uk/uploads/publications/bns/BN232.pdf
[xiv] See note 13
[xv] National Association of Welfare Rights Advisers (2014). Incorrect advice about free school meals, available at: http://www.nawra.org.uk/index.php/incorrect-advice-about-free-school-meals/
[xvi] Children’s Society (2018). Free school meals and Universal Credit Briefing on Government’s proposed changes to eligibility criteria for free school meals, available at: https://www.childrenssociety.org.uk/sites/default/files/fsm-poverty-trap-tcs-cpag-20180312_0.pdf
[xvii] Child Poverty Action Group (2018). Eligibility for free school meals and the early years pupil premium under Universal Credit CPAG’s response, available at: https://cpag.org.uk/file/3126/download?token=9hcXVdOD
[xviii] See note 17
[xix] See note 17
[xx] Policy in Practice (Local Government Association/Learning and Work Institute), (2017). The cumulative impacts of welfare reform a national picture, available at: http://policyinpractice.co.uk/wp-content/uploads/2017/06/The-cumulative-impacts-of-welfare-reform-a-national-picture_full-report.pdf
[xxi] See note 13
[xxii] End Hunger UK (no date). Measure food insecurity, if we measure it we can fix it, available at: http://endhungeruk.org/measure/
