Does capping social security harm health? A natural experiment in the UK

Abstract

In this paper, we examine the mental health effects of lowering the UK's benefit cap in 2016. This policy limits the total amount a household with no‐one in full‐time employment can receive in social security. We treat the reduction in the cap as a natural policy experiment, comparing those at risk of being capped and those who were not, and examining the risk of experiencing poor mental health both before and after the cap was lowered. Drawing on data from ~900,000 individuals, we find that the prevalence of depression or anxiety among those at risk of being capped increased by 2.6 percentage points (95% confidence interval: 1.33–3.88) compared with those at a low risk of being capped. Capping social security may increase the risk of mental ill health and could have the unintended consequence of pushing out‐of‐work people even further away from the labour market.

Schools and food charity in England

“…A striking pattern in the data was how regularly welfare system was identified as a reason families turned to schools for help. Again, this mirrors the general literature on food banks, which focuses on the importance of welfare state retrenchment and particularly the introduction of Universal Credit as causes of food insecurity (Reeves & Loopstra, 2020;Reeves et al, 2022). Multiple school staff made specific references to how Universal Credit forced families to rely on food charity from schools.…”

“…In further support of the general literature on the drivers of food bank usage, benefits and welfare reforms were highlighted as proximate causes of food insecurity that pushed people to access school food aid (Loopstra et al, 2018;Reeves et al, 2022). As is well known, larger families are particularly at risk of experiencing food insecurity and were therefore a group who often received support through school-based food aid (The Food Foundation, 2022b).…”

“…Three aspects of these broader changes increase the risk of low‐income families being pushed further into poverty and experiencing food insecurity. Firstly, the introduction of a ‘benefits cap’, which limits the amount of benefits individuals and families can receive (Reeves et al., 2022: 348). Secondly, the introduction of the ‘two child’ limit policy, which restricts the child entitlement component of Universal Credit; this helps to explain why almost 42% of families with more than two children routinely experience food insecurity (The Food Foundation, 2022b; The Joseph Rowntree Foundation/The Trussell Trust, 2023).…”

The Impact of Financial Crises on Mental Health

“…When adjusting for inflation, out-of-work benefits in the UK are currently at their lowest rate in thirty years 8 . The changes to the UK social security system may have increased poverty, as well as adversely impacted mental health 9 . For example, a government cap introduced in 2016 led to thousands of households receiving less money.…”

“…For example, a government cap introduced in 2016 led to thousands of households receiving less money. The proportion of these households experiencing mental health problems increased from approximately 21% to 30%, a relative increase of almost 50% 9 . This increase may also negatively impact individuals' ability to work, which undermines this policy's central aim of encouraging the transition of people into paid employment 8 .…”