What happens to state benefit in a recession

Broken_hearted

Serious question, in past recessions what has happened to benefit levels as many more people find themselves on benefits. Do they cut levels so all can have some?

PasturesNew

I think they will have to now. Never in the history of mankind have so many received so many different kinds of benefits and top ups. It's unprecedented.

As wages drop and jobs are lost, they'll have to really look at cutting down the nebulous ones.

Pobby

It might just happen that this could precipitate a well needed shake up in the benefits system.
I read today that there is pressure to increase the state pension to a decent living income and rightly so. Let those that have paid in benefit in retirement.

islandannie

Index linked!!

Broken_hearted

Pobby wrote: »

It might just happen that this could precipitate a well needed shake up in the benefits system.
I read today that there is pressure to increase the state pension to a decent living income and rightly so. Let those that have paid in benefit in retirement.

A lot of those who have paid in got their own pensions. My parents both have more than ample money coming in without any state money.

Generali

Broken_hearted wrote: »

Serious question, in past recessions what has happened to benefit levels as many more people find themselves on benefits. Do they cut levels so all can have some?

In the early 80s, the buying power of state benefits was cut substantially as a matter of economic policy - the tougher you make things for people on benefits, the more motivated they are to look for work.

In the early 90s, benefits remained at about the same level in real (inflation adjusted) terms.

Something may well have to give this time I think. Tax receipts are (I believe) about to plummet and welfare receipts rise rapidly at a time of huge budget deficits already. My belief is that the Government won't be able to borrow that which she would like so will either have to raise taxes (which will choke off recovery) or cut spending. In the end the latter or bankruptcy will be the choices.

IMO.

Happy New Year.

EdInvestor

Broken_hearted wrote: »

Do they cut levels so all can have some?

No.Indeed in the 1974 recession and following years they put them up, because inflation was so high (20%+ p.a). That's when index linking started.

Bogof_Babe

Broken_hearted wrote: »

A lot of those who have paid in got their own pensions. My parents both have more than ample money coming in without any state money.

It would hardly be fair if they were penalised for that though, would it?

Jennifer_Jane

Broken_hearted wrote: »

A lot of those who have paid in got their own pensions. My parents both have more than ample money coming in without any state money.

There has been some creativity with the Basic State Pension by allowing people to defer to get a higher pension or a lump sum. I wonder if the opposite might apply: that there could be an option to not take the pension at all?

Any thoughts?
Jen
x

amcluesent

Some fairness needs applied to restore balance between tax payers and benefits claimants (I mean non-contributory benefits, not pensions).

1) Declining child-benefits, 100%, 66%, 33% then nothing for 4th or greater child. Doing a 'Karen Mathews' isn't an acceptable option.
2) Non-contributory benefits paid in DSS vouchers than can only be used for food/clothes. Jetting off to Tenerife on benefits isn't acceptable.
3) A wee bit more radical, long term benefits claimants taken off electoral roll.

islandannie

amcluesent wrote: »

Some fairness needs applied to restore balance between tax payers and benefits claimants (I mean non-contributory benefits, not pensions).

1) Declining child-benefits, 100%, 66%, 33% then nothing for 4th or greater child. Doing a 'Karen Mathews' isn't an acceptable option.
2) Non-contributory benefits paid in vouchers than can only be used for food/clothes. Jetting off to Tenerife on benefits isn't acceptable.
3) A wee bit more radical, long term benefits claimants taken off electoral roll.

Hell I actually agree with you.

Happy new Year.