In Britain, welfare amounts to over 30% of overall public spending. If we ignore the bail outs – and we should, because £1.2 trillion could have built schools on the moon – then that’s the single largest area of public expenditure; a provision to guarantee a basic standard of living for all those in financial need.
The Welfare Reform Bill of 2011 was the biggest change to the welfare system for over 60 years. One element is the introduction of Universal Credit, a ‘streamlined’ replacement for six of the main means-tested benefits and tax credits that is said will ‘ensure work always pays.’
A fortnight ago, another change – the replacement of Disability Living Allowance (DLA) with a Personal Independence Payment (PIP) – was the reason hundreds of thousands of Twitter users were trending #spartacusreport, relating to Responsible Reform, a 37 page independent report into the alleged general awfulness of the DLA reforms.
Maria Miller, the disability minister, has claimed that £600m is overpaid to those that do not qualify for the allowance. She called for a need for reassessment to be built into the system – DWP assessments put underpayments at £190m – as 70% of people receive DLA for life and their condition will change over time.
These figures, and their interpretation, have been questioned and challenged; in the end, many say, a person’s health is never a simple case of black and white.
People already receiving DLA who are under 16 or over 65 will not be eligible for PIP. Another possibility for the disabled is Employment and Support Allowance, the replacement for Incapacity Benefit. Those over 65 may be awarded Attendance Allowance if they need help with personal care.
Currently, benefits are divided into two categories: Contributory and Non-contributory. Contributory are awarded subject to sufficient NI payments, and include contributions-based Jobseeker’s Allowance (JSA) and Incapacity Benefit. Non-contributory benefits are mostly needs-based payments with no regard to prior NI contributions; they are available to anyone whose income falls below a certain level or fulfils other criteria (e.g. disability for DLA); these include the basic level of JSA and income support. Child Benefit is ‘universal’ and is paid irrespective of financial circumstance.
JSA is paid to adults actively seeking work or working fewer than 16 hours per week. Those with savings over £6000 will either receive reduced benefits or none at all.
Our government’s “draconian” plans to limit the amount of benefits a single household receives have, again, outraged many. The House of Lords will vote today on a cap of £26,000 annually; an amount a leaked government paper says will push one hundred thousand children into poverty.
Ministers say the measure is about reducing dependency and encouraging people back to work. DLA/PIP isn’t included and there are calls for Child Benefit to also be excluded from the calculation.
Iain Duncan Smith has admitted that the vote could go against him but that “most people would subscribe to (not being able to) on benefits, earn more than if you went out and worked.”
Fortunately, a report into low pay was published last week describing the impact of low pay in national supermarkets. 900,000 people work for Tesco, Asda, Sainsbury’s and Morrisons – the largest employer block outside of the NHS – and the rewards for the CEOs are high, starting at 3.2m for Justin King of Sainsbury’s and topping off at 6.9m for Philip Clarke of Tesco. Yet while these companies recognise the national minimum wage, they do not pay the UK living wage.
With nearly two thirds of children in poverty living in working families who are reliant on tax credits, it turns out that tax credits are just a less controversial way of saying that the taxpayer subsidises the wages of the poor whilst, as we’re hearing all too often, the rich laugh all the way to our banks.
And with almost three million unemployed, who’s going to complain?