Decent life: minimum income standard
ACOUPLE with two children need to spend more than £40 000 (R700 000) a year to reach a decent standard of living, according to a new study in the UK.
The research shows that families where both parents work have benefited most over the past year, as they strive to reach what a poverty research group calls the minimum income standard.
The Joseph Rowntree Foundation sets this as the minimum needed for a decent life and is higher than the more commonly used poverty line, which is set at 60% of average income. It may include benefits such as universal credit or tax credit.
Changes to the benefit system means that single-parent families have slipped down the living standards’ table over the past year, said the foundation. But the group that has lost out most over the past 12 months are traditional families with one breadwinner.
The foundation calculates its minimum income using focus groups to estimate what people need not just for food, housing and clothing, but to have “opportunities and choices”.
Weekly costs for a couple with two children who meet the standard, the report said, should include £235 (R4 000) for child care, £60 (R1 000) to run a car and £95 (R1 600) for social and cultural participation.
Participation includes everything needed for a social life – from attending clubs and gatherings each week to buying Christmas presents.
The report said the cost of providing the minimum standard has gone up over the past year by between 3% and 4%, with costs slightly different for each type of family or household.
It put the amount needed to meet a minimum standard at £17 900 (R304 300) for a single person, and £20 400 (R346 800) each for a working couple with two children, bringing the required joint income over the £40 000 (R680 000) mark for the first time; and £25 900 (R440 300) for a lone parent with a pre-school child.
According to the Rowntree calculations, two parents earning the national living wage of £7.50 (R127) an hour would be £59 (R1 000) a week short of its income standard. They have, however, done better over the past year than other families because of the rising level of the national minimum wage.
A single parent earning the national living wage, the estimates say, is now £67 (R1 140) a week below the standard, while a family with one breadwinner on a minimum wage pay packet is £120 (R2 040) below the standard.
The report said the new universal credit benefit, designed to encourage claimants to find jobs, has helped working couples, “especially if they have childcare costs”. They have also benefited from rises in the national living wage.