This blog post was written by Marilyn Howard, Honorary Research Associate and Doctoral student in the School of Policy Studies, University of Bristol
Couples living together are often assumed to share income and manage finances jointly. This assumption underpins means-tested benefits, which treat a couple as if they were one unit, so that one partner’s income and assets affects the couple’s overall benefit entitlement.
Summarising existing research into money management and control in a briefing for the Women’s Budget Group , Marilyn Howard from the University of Bristol, and Fran Bennett from the University of Oxford, use these insights to explore the implications for how social security benefits are designed and delivered.
Assumptions that household income is shared
Research into how couples deal with money has been carried out since the 1980s, originally on married, opposite sex couples – and has been included in the university’s seminal Poverty and Social Exclusion surveys.
Whilst research shows that many couples say they manage money jointly, in other cases one partner may manage it, and a small number of women get a housekeeping allowance. More ‘independent’ methods of organising finances (e.g. keeping more, or all, of your own income rather than putting it into a joint ‘pool’ with your partner’s money) appear to be more common in couples who are younger, and in those who are cohabiting (rather than married) or in same-sex relationships.
Presuming that what happens in the household is either unimportant for policy, or not a matter for government, means that what happens between partners in a couple can be hidden. It also ignores the importance of having an income in your own right, which is more likely to lead to you having control over that income.
The assumption that a couple’s resources are shared is not always borne out in practice. Resources may be shared unequally, and an individual could be in poverty even if the household is not. In low-income families with children, women often have to manage household finances on a low budget and may go without to protect their family.
Unequal sharing can sometimes mean financial abuse, where one partner controls the income and resources of the other. An estimated one in five adults has experienced financial abuse, mainly women in opposite sex relationships.
Financial coercion can prevent survivors of domestic abuse from leaving their abusive partner because they do not have the finances to be able to flee. Thus, being exposed to further risks not just of financial abuse but physical sexual, psychological abuse and even death.
Financial abuse, concerning money, is part of a wider concept of economic abuse which involves abusers getting, using and exploiting a range of economic resources. It often takes place as a pattern of coercive and controlling behaviour which is characteristics of domestic abuse. Internationally, domestic abuse is recognised as both a cause and consequence of inequality between men and women.
The scope for financial abuse is one reason why concerns have been raised about Universal Credit.
Universal Credit couple means test
Universal Credit (UC) is an integrated, means-tested benefit for people of working age, replacing six other benefits and tax credits. Many people in couples needing to claim UC for the first time during the pandemic have been refused due to their partner’s earnings, which was unexpected, and has been perceived as unfair.
Even when a couple is entitled, they can only nominate one bank account for Universal Credit to be paid into. This single payment is highly problematic.
Universal Credit single payment
Having one Universal Credit payment per couple does not suit all circumstances, or all couples. Universal Credit needs to be flexible enough to work for all kinds of families, not just long-term, stable married couples who may have more traditional gendered patterns of behaviour. Partners in younger or cohabiting couples may want more independence. And in more transient, new relationships or in blended families, managing the money can be more complicated. Who gets what income to begin with is important too.
Importantly, the single, monthly Universal Credit payment can also give one partner significantly more financial control than the other, as almost all the eggs are in one basket (compared to the previous system). The single payment can also make financial abuse easier.
For most British claimants, in principle, Department for Work and Pensions staff have the discretion to split the payment between partners in exceptional circumstances like financial abuse, domestic abuse or mismanagement. But in practice, asking for this may increase the risk of abuse.
In Northern Ireland couples can request separate payments, though in practice this seems to be rare. In Scotland however, where Universal Credit payment policy is devolved, there is a policy aim to make a payment to each partner more routinely.
The Women’s Budget Group briefing recommends more research into broad categories of money management, such as partial pooling and joint management, and that what happens to incomes within a household should be included in assessments of social security reforms.
Whilst the research varies in focus – sociological or economic, working age or including pensioners – and some data are decades old, this literature reinforces the importance of a focus on the individual, not the household alone, and remains as relevant in the 2020s as the 1980s.