Channel 4 - not necessarily the advisers' favourite TV company since the ghastly Benefits Street - is promising us half an hour on the Universal Credit debacle this evening. I may be jumping the gun to post about this benefit ahead of the show, but while preparing some notes for a talk on UC, it struck me that the fiasco we have now could easily have been avoided and the 'good bits' of UC already introduced if this ridiculous concept of 'Pathfinder' areas had been scrapped and an altogether different approach to bringing in changes adopted.
Here's my alternative plan. If we accept that it would actually be helpful to claimants to combine some benefits into one to save a new claim having to be made every time there's a change from sickness to health, part-time worker to carer etc (and I think we all do), that's surprisingly easy. What we now call Income-based Jobseekers Allowance and Income-related Employment and Support Allowance are no more than mutated forms of Income Support, which once provided means-tested support for jobseekers and the sick as well as lone parents and carers. It even encompassed what we now call Guarantee Pension Credit.
It cannot surely be beyond the wit of even IDS's minions to stitch IS, IbJSA and IrESA back together as Income Support, with multiple routes to entitlement. Do this, and you're already half way to Universal Credit - and without any expensive new IT. It could literally happen overnight and nobody would notice the difference, except the poor souls currently caught floundering about between ESA and JSA while they challenge a 'fit for work' decision.
On a technical point, I would dump the separate ESA components and use the existing IS 'disability' and 'enhanced disability' premiums to supplement the personal allowances of people in the WRAG and Support groups respectively, with transitional protection for any losers, though most claimants and couples will stand to gain.
Stage 2 is to tackle earnings disregards. IDS claims his reforms will 'make work pay', but he's left these untouched, like all of his predecessors since 1988 (there's a previous post from 27th March 2014 on this very point) while we wait for UC to come to the rescue. Nothing at all stops these from being uprated now. If you want to 'make work pay', make it! Put the disregard for a single person up from the insulting £5 per week to something vaguely credible - a day's work at the minimum wage, at least? What could be easier? I don't recall the system going into meltdown when the capital limits were made more generous.
Bringing Tax Credits back from HMRC and into this system is much more challenging but again, if we remember that personal allowances for children used to be an integral part of Income Support, to make them so again and to use these personal allowances and income disregards as the basis of in-work benefit calculations would seem the logical starting point - it is, after all, the basis of Housing Benefit. Key to this being seen as 'fair' would be a reasonable 'taper' applied to excess income. The current 65% for HB and UC, which diminishes additional earnings by more than half of their value and exceeds the top rate of income tax, is not 'reasonable'. Full credit for childcare costs should also be on our wish list.
As for housing costs, that is where I find myself in a quandary. The 'easy' option is to allow actual costs (subject to some restrictions on excessive rents and high mortgages) as part of the 'applicable amount' and let the DWP do the calculations, but there are arguments for keeping HB separate and under Council control. Local authorities are in a far better position than the DWP to spot landlord fraud; they know how many homes there are in a particular street, how many rooms in any given HMO. And what about discretionary payments? I am unclear on where or how (or if) these will be administered under UC.
As for payment - why not let claimants choose their payment interval? If they are used to budgeting on a monthly basis, tick for that; if weekly payments are more managable, tick for those. Let them choose to have their landlord paid direct too, if they want. Why is 'choice' the mantra for the middle-classes, whether we're talking education or healthcare, but benefit claimants are denied it to the point where they now face the prospect of pre-paid storecards for 'sensible' purchases only.
However we tackle any reform, a key factor in keeping the system 'fair' should be that it is not a 'postcode lottery', which is precisely what we have with UC. Claimants in neighbouring Councils currently have entirely different regulations applied to their claims, more or less generous disregards to part-time earnings. People in identical circumstances claiming a few days apart as UC 'rolls out' get paid different sums at different intervals, but both receive letters telling them they are getting 'what the Government says you need to live on.' The same problems plague PIP.
This isn't 'simplification' - it's a scandal. It will be interesting to see what Channel 4 makes of it.
Monday 27 October 2014
Friday 3 October 2014
The Children Tax
Looking back at the party conference season, it's hard to decide which left me fearing most from next election.
I expect to be depressed by the Conservatives' self-righteous parade of prejudice, so George Osborne's miserly pledge to freeze working-age benefits and IDS's plans for a pre-paid card to stop feckless claimants splurging the hard-working taxpayers' largess on booze and fags (or public transport, charity shop clothes and market stall food for that matter) did little more than raise my usually low blood pressure to near-normal levels.
I have also pretty much abandoned hope of hearing anything truly compassionate or inspriring from the red corner when it comes to Social Security. Yes, they will abolish the Bedroom Tax - but we knew that already. We also know - for certain now the rest of the picture starts to take shape - that this is because it is already unpopular and it is hurting the budgets of Labour councils who retain their own housing stock. That it is wrong alone is not enough - other wrongs remain and are not to be righted.
On the contrary, we again had the unedifying spectacle of Labour again trying to look 'trustworthy' and 'tough' on economic issues at the expense of the poor. They would extend the freeze on Child Benefit beyond Osborne's original timescale - despite CB being disregarded for means-tested benefit purposes, making it something that can be increased without the gain being lost elsewhere, but meaning losses aren't compensated for by a corresponding rise anywhere else.
Ed Balls also made a point of stating that a future Labour Government would retain the 'Benefit Cap', limiting the weekly sum any family or individual could receive in certain benefits to no more than the average wage. I pulled apart the Tories' justification for this in an earlier post which showed how benefits payable to someone on the average wage would keep them ahead of their counterpart on benefits only:
http://raggedskirt.blogspot.co.uk/2014/08/cloth-caps-benefit-caps-and-northsouth.html
The excellent 'Benefits in the Future' blog did a neater job with more maths and graphs here:
http://blog.cix.co.uk/gmorgan/2014/02/07/the-benefits-cap-and-real-income-levels/
The calculations aren't that difficult - I'm sure Ed Balls is more than capable of working them out for himself or has minions available.
What he isn't apparently willing to do is scrap something 'popular' with voters, because they wrongly believe it is dealing with the stereotypical - yet mythical - single parent choosing to have children solely as an alternative to working for a living, despite the fact that even very 'average' out-of-work families with two or three kids can no longer afford to live in most London Boroughs, even in supposedly affordable Social Housing.
In areas with lower rents the Benefit Cap is, to borrow an expression coined by the Chief Executive of our CAB, a 'Children Tax', as singles, childless couples and small families aren't affected. In this low-rent region of the north Midlands, you're allowed the equivalent of four-and-a-half children before the current cap kicks in. More than that and you'll lose a chunk of Housing Benefit, putting you in immediate danger of Court procedings (with costs) and ultimately eviction. If you receive no more than 'the amount the Government says you need to live on' in other benefits, it's inevitably going to be a struggle to make up the difference.
The maximum Child Tax Credit for one child is £2750 per annum, so trimming another £3,000 off of the cap as proposed this week - thus breaking any possible justification based on average wages - is the equivalent of telling families they are allowed one less child and for four and a half weeks of the year they are allowed two fewer children.
It's not as if affected families can retrospectively do anything about this policy. Even if it puts someone off having another child, what about the 'surplus' children they already have? Should they put them up for adoption? Leave them in baskets outside the door of the local Workhouse or Foundlings Hospital? Expose them on a hillside to await the fate appointed for them by the Gods? You could move away from the south, but £3000 per year less means you're going a couple of shires further up country this coming year for an insecure private tenancy - unless you're lucky enough to get a house on a northern Council estate full of voids left by the Bedroom Tax.
Don't be ridiculous, the Tories will say - the feckless poor simply have to find more affordable places to live, get jobs and in the meanwhile cut back on the booze and fags. Which completely disregards the fact that there are generally more and better-paid jobs where property prices are highest, that finding and moving to a new address isn't something that happens overnight and that unemployed people are less, not more, likely than their working counterparts to spend money they haven't got on cigarettes and alcohol.
I cannot stress enough that the real losers in all of this are children. Uprooted from the schools, friends and communities they know or going short because their parents are having to keep three of them on the money for two, education disrupted, family strife increased, living in cheaper, smaller and less safe or secure accommodation 'because we are too many'. As rents continue to rise and this cap stays in place, increasing numbers of families will literally have insufficient money to cover their rent anywhere in the country and landlords - including social landlords - will become wary of letting to large families, even those in work, in case unemployment or separation leaves them unable to pay their way. They will be forced to share or squat, borrow to cover debts with no chance of repayment or put children into care.
In short, this policy is so utterly morally bankrupt that it is frightening how little debate it now raises, let alone condemnation. But Ed says it stays, and George says it's going to be cut by £3000 per annum. I'm not holding my breath waiting for Ed to argue that it needs to go back up. The social ideals of 'Cathy Come Home' have turned into 'Cathy - f**k off to a slum up north, and take your kids with you.'
I expect to be depressed by the Conservatives' self-righteous parade of prejudice, so George Osborne's miserly pledge to freeze working-age benefits and IDS's plans for a pre-paid card to stop feckless claimants splurging the hard-working taxpayers' largess on booze and fags (or public transport, charity shop clothes and market stall food for that matter) did little more than raise my usually low blood pressure to near-normal levels.
I have also pretty much abandoned hope of hearing anything truly compassionate or inspriring from the red corner when it comes to Social Security. Yes, they will abolish the Bedroom Tax - but we knew that already. We also know - for certain now the rest of the picture starts to take shape - that this is because it is already unpopular and it is hurting the budgets of Labour councils who retain their own housing stock. That it is wrong alone is not enough - other wrongs remain and are not to be righted.
On the contrary, we again had the unedifying spectacle of Labour again trying to look 'trustworthy' and 'tough' on economic issues at the expense of the poor. They would extend the freeze on Child Benefit beyond Osborne's original timescale - despite CB being disregarded for means-tested benefit purposes, making it something that can be increased without the gain being lost elsewhere, but meaning losses aren't compensated for by a corresponding rise anywhere else.
Ed Balls also made a point of stating that a future Labour Government would retain the 'Benefit Cap', limiting the weekly sum any family or individual could receive in certain benefits to no more than the average wage. I pulled apart the Tories' justification for this in an earlier post which showed how benefits payable to someone on the average wage would keep them ahead of their counterpart on benefits only:
http://raggedskirt.blogspot.co.uk/2014/08/cloth-caps-benefit-caps-and-northsouth.html
The excellent 'Benefits in the Future' blog did a neater job with more maths and graphs here:
http://blog.cix.co.uk/gmorgan/2014/02/07/the-benefits-cap-and-real-income-levels/
The calculations aren't that difficult - I'm sure Ed Balls is more than capable of working them out for himself or has minions available.
What he isn't apparently willing to do is scrap something 'popular' with voters, because they wrongly believe it is dealing with the stereotypical - yet mythical - single parent choosing to have children solely as an alternative to working for a living, despite the fact that even very 'average' out-of-work families with two or three kids can no longer afford to live in most London Boroughs, even in supposedly affordable Social Housing.
In areas with lower rents the Benefit Cap is, to borrow an expression coined by the Chief Executive of our CAB, a 'Children Tax', as singles, childless couples and small families aren't affected. In this low-rent region of the north Midlands, you're allowed the equivalent of four-and-a-half children before the current cap kicks in. More than that and you'll lose a chunk of Housing Benefit, putting you in immediate danger of Court procedings (with costs) and ultimately eviction. If you receive no more than 'the amount the Government says you need to live on' in other benefits, it's inevitably going to be a struggle to make up the difference.
The maximum Child Tax Credit for one child is £2750 per annum, so trimming another £3,000 off of the cap as proposed this week - thus breaking any possible justification based on average wages - is the equivalent of telling families they are allowed one less child and for four and a half weeks of the year they are allowed two fewer children.
It's not as if affected families can retrospectively do anything about this policy. Even if it puts someone off having another child, what about the 'surplus' children they already have? Should they put them up for adoption? Leave them in baskets outside the door of the local Workhouse or Foundlings Hospital? Expose them on a hillside to await the fate appointed for them by the Gods? You could move away from the south, but £3000 per year less means you're going a couple of shires further up country this coming year for an insecure private tenancy - unless you're lucky enough to get a house on a northern Council estate full of voids left by the Bedroom Tax.
Don't be ridiculous, the Tories will say - the feckless poor simply have to find more affordable places to live, get jobs and in the meanwhile cut back on the booze and fags. Which completely disregards the fact that there are generally more and better-paid jobs where property prices are highest, that finding and moving to a new address isn't something that happens overnight and that unemployed people are less, not more, likely than their working counterparts to spend money they haven't got on cigarettes and alcohol.
I cannot stress enough that the real losers in all of this are children. Uprooted from the schools, friends and communities they know or going short because their parents are having to keep three of them on the money for two, education disrupted, family strife increased, living in cheaper, smaller and less safe or secure accommodation 'because we are too many'. As rents continue to rise and this cap stays in place, increasing numbers of families will literally have insufficient money to cover their rent anywhere in the country and landlords - including social landlords - will become wary of letting to large families, even those in work, in case unemployment or separation leaves them unable to pay their way. They will be forced to share or squat, borrow to cover debts with no chance of repayment or put children into care.
In short, this policy is so utterly morally bankrupt that it is frightening how little debate it now raises, let alone condemnation. But Ed says it stays, and George says it's going to be cut by £3000 per annum. I'm not holding my breath waiting for Ed to argue that it needs to go back up. The social ideals of 'Cathy Come Home' have turned into 'Cathy - f**k off to a slum up north, and take your kids with you.'
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