From education to employment

Wages, Universal Credit and Adult Social Care Workers

Louise Murphy, Economist at the Resolution Foundation

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.

Public and Private Sector Employees

Last year there were 1.54 million people working in the adult social care sector in England. 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.

Zero Hour Contracts

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.

National Living Wage and Median Hourly Pay

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.

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.

The ‘Cost of Living’ Crisis

Looking ahead to 2022, the picture is not bright for low-paid adult social care workers. Although the National Living Wage will rise to £9.50 per hour from April 2022, an adult social care worker working 16 hours per week 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 (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.

Recommendation 1

The Government should reintroduce the £20 per week uplift to Universal Credit to support low-paid care workers, including those who work part-time.

Recommendation 2

The Government should reform Universal Credit to support households who are in insecure work, including those on zero-hours contracts.

Recommendation 3

The Government should address the high incidence of 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.

Louise Murphy, Policy in Practice

Reforming Adult Social Care – Integrating Funding, Pay, Employment and Skills Policies in England

The Campaign for Learning’s report, Reforming Adult Social Care: Integrating Funding, Pay, Employment and Skills Policies in England, is based on seventeen contributions from experts in both the adult social care sector and the post-16 education, skills and employability sectors. 

Three themes are common to most of the authors’ contributions – the scale of the adult social care sector in England, the complexity of policy making for the sector, and the need for greater integration of funding, pay, employment and skills. 

Part One: The Adult Social Care Sector

Part Two: Strategic Reforms to Adult Social Care

  • Paul Nowak, TUC: A National Care Forum to Fix Social Care
  • Stephen Evans, Learning and Work Institute: A Long-Term Pay, Employment and Skills Plan for Adult Social Care

Part Three: Recruitment in the Context of a Skills-Based Immigration Policy

  • Becci Newton, Institute for Employment Studies: Improving Pay and Job Quality in Adult Social Care
  • Karolina Gerlich, The Care Workers’ Charity: Encouraging Young People and Adults to become Adult Care Workers
  • Chris Goulden, Youth Futures Foundation: A Career in Adult Social Care: The Views of Young People
  • Andrew Morton, ERSA: Targeting Active Labour Market Policies to Fill Adult Social Care Vacancies

Part Four: The Delivery and Design of Social Care Qualifications

  • John Widdowson, Former FE College Principal: Embedding Emotional Support for Learners on Health and Social Care Courses
  • Naomi Dixon, Education and Training Foundation: Supporting Post-16 FE Practitioners to Teach Social Care

Part Five: The Role of Post-16 Education and Skills Policies

  • Elena Wilson, The Edge Foundation: Valuing Level 3 BTECs for 16-18 Year Olds Studying Health and Social Care
  • Julian Gravatt, AoC: What Post-16 FE Can and Cannot do to tackle the Adult Social Care crisis
  • Jane Hickie, AELP: Reforming Apprenticeship Funding and Delivery for Adult Social Care
  • Gemma Gathercole, CWLEP: Adults Skills, Adult Social Care and Devo-Deals

Part Six: Adult Learning and Adult Social Care

  • Susan Pember, HOLEX: The Wider Benefits of Adult Learning for Adult Social Care
  • Simon Parkinson, WEA: Adult Learning for Adults in Social Care
  • Campaign for Learning: Proposals for reform in England 

Related Articles