MoneySaving Poll: Have benefits been cut too far or not far enough?

justjoanne wrote: »

And it's not as simple as saying "find a job". If the jobs are not there - and they aren't - or you have long term illness or disability then cutting the benefits paid will not "help" you into work. The cuts just penalise those who are unfortunate.

The total benefit bill is 12.1% of gross domestic product. Only 0.2% of that is income support and only 0.3% unemployment benefit. Those aren't a big deal. Disability benefit is at 1.2% and incapacity at 0.8%, far bigger spends. Even small amounts of removing or reducing those two to levels that people are entitled to could cover the whole cost of unemployment and income support benefits.

justjoanne wrote: »

Not everyone has had the same opportunities as you!

The largest part of the benefit bill is the state pension at 5.5% of GDP. Everyone has essentially the same ability to get at least the basic state pension because you get credits while unemployed, in prison or whatever else.

A person who thinks that benefits should be cut might easily be a person on income support who thinks that the state pension is too high or should be means tested.

justjoanne wrote: »

I'm appalled at the number of people that think cuts have not gone far enough. I can only imagine that they have never tried to live on £70 a week (or £55 a week if you are under 25). And no - I'm not on that amount myself - but I do feel for those that are.

There is no quality of life on £70 a week, especially if you are disabled. But then, some might say, who has a right to quality of life? Just lie in bed all day and watch a widescreen TV?

justjoanne wrote: »

And it's not as simple as saying "find a job". If the jobs are not there - and they aren't - or you have long term illness or disability then cutting the benefits paid will not "help" you into work. The cuts just penalise those who are unfortunate.

Of course there are a few who work the system and give everyone a bad name, but they are a tiny proportion. Probably less then those who avoid tax to be even richer than they are.

Unfortunately, this now makes it almost impossible for genuine claimants to receive the help they need.

justjoanne wrote: »

Have some compassion people. Not everyone has had the same opportunities as you!

Hear, hear

HappyMJ wrote: »

Cut everything...there's plenty of food banks which you can only visit twice a year and plenty of hostels if you really need a bed for the night. Oversubscribed. Someone not working could seek help from family and friends... Not everyone has family or friends if they really need something I'm sure they'll find ways and means to get what they need (yes I know-they'll turn to crime). That'll soon get everyone out working and saving for a retirement. I admire your idealistic thoughts. Unfortunately we live in a real world with real people and all that entails.

People that are not capable of working...i.e those that are genuinely disabled should be given the equivalent of minimum wage as if they were working So that's 35 hours a week at £6.70 an hour. £234.50 a week. Much more manageable than £70 a week.

Interesting to have a poll answer asserting that "The huge cuts to benefits over the last few years are a disgrace" when the real spending on benefits has increased substantially in recent years, from 179.7 billion in 2005-6 to 214.4 in 2010-1 and 214.1 billion in 2015-16. Or in GDP terms, from 10.8% to 12.6% and now 11.6%.

I suppose it depends on which benefits someone is thinking of and how short term their memory is when they think of what time period is covered by the last few years but it would have been nice to have a choice to suggest a reduction in the huge increase in benefits spending in the last few years.

The most expensive benefit of all is the state pension, at about four times the cost of the next highest benefit, and it has been increasing in recent years due to the Triple Lock (in per recipient terms, not nominal, real, per capita or % GDP). I rather doubt that most people realise that the state pension is the biggest potential target when they call for a cut to benefits.

If you don't know what the cost of the various benefits is, here are the numbers for 2014-15 from the OBR Welfare Trends Report of June 2015, as a percent of GDP, from the table on page 9:

5.5% state pensions
1.4% housing benefit
1.7% personal tax credits
1.2% disability benefits (DLA, PIP and AA)
0.8% incapacity benefits (incapacity benefit, ESA, SDA and incapacity part of IS)
0.2% income support
0.3% unemployment benefits (JSA)
0.7% child benefit
0.4% other welfare benefits

Tax credits were introduced in various stages in 1999, 2001 and 2003 so someone might think that if we could do without them before we can do without them now as a way to save about £30 billion a year. The 4.6 million recipients might not agree. Those who like lower child relative poverty might not agree, since part of this system reduced the children in households with income below 60% of median wage from 35% to 19%. A household with children can be eligible for tax credits on up to £40,000 a year, single people up to £14,000 and a couple with no children up to £19,000. Maybe the person who cares about child poverty might want the payments for those who don't have children eliminated. Maybe the person who has no children would want the payments for children reduced or capped to avoid encouraging having more children while on benefits.

Be careful what you wish for when saying benefits should be increased or decreased without being specific. You could easily be the recipient of the one that someone else thinks should be decreased.

The total cost of benefits for various years has been this, from chart 2.1 in the spreadsheet:

Year	Nominal	Real	real spend	percent
	 cost	cost	per capita	of GDP
1985-86	43.2	105.5	1865.3		11.1
1990-91	58.4	104.5	1825.4		9.4
1995-96	91.8	141.7	2441.3		11.5
2000-01	109.4	151.5	2573.5		10.6
2005-06	146.2	179.7	2974.6		10.8
2010-11	199.3	214.4	3416.3		12.6
2015-16	217.2	214.1	3297.7		11.6

The 1990s weren't a horrible period. Perhaps it is worth wondering whether we need to be paying 1.8 times as much per capita in benefits today as we were then?