Means Testing (why don't we do it)?

Pimperne1

Not an expert on which allowances are paid without Means Testing but I believe the following are:

Pensions
Family Allowance
Some Disability Allowances related benefits
Winter Fuel Allowance

If we are ever going to get our financial house in order we must stop paying money to people who don't need it (would any other country just pay out to someone who was already quite well off?).

Instead of making 1000 or so of those civil servants redundant we should keep them in place and have one office which will review all allowances and remove those from families who don't need them. After a year reduce the staff to 900 and make it 100 less each year from then on (leaving by natural wastage rather than redundancy I would suggest).

Simple process, you provide your P60 from last year along with a consolidated claim for that which you current receive. No ifs and buts so if you earn in excess of, say, £40k a year jointly then you don't need the taxpayer to provide you with financial assistance.

I for one am looking forward to us actually grasping this bull by the horns and showing the outside world that we are taking our responsibilities seriously.

chewmylegoff

Isn't this sort of the purpose of the proposed universal credit? I haven't read up much about it, I just assume its to pull everything together and cap total payments.

CLAPTON

means testing- disincentive to work or save or provide for one's family; endlessly complicated; if done in arrears then a nightmare for people whose income has dropped etc

flat rate benefits - expensive but very simple

paulmapp8306

There is also the issue or rewarding people for working. You dont, for instance, want to means test everyone and bring them up to a suitable level, because what would be the point or working. Im guessing a set max level, where no benefits would be awarded if you earn more - maybe that suggested £45k figure.

Benefits should be calculated from there. Possibly a % of how far from the Max you are (maybe 50%?). so unemployed get half of the max figure - so £22.5k. Part time, low earners on say £6k, get half the difference (45-6=39, divide by 2 = 19.5k) giving them an income of £25.5k. Full time low paid workers on say £14k get the same % (45-14=31, divide by 2= 15.5k) giving them a total of £29.5k. Higher paid workers nearer the max, say earing £40k, get the same again (45-40=5, divide by 2 = 2.5k) total of £42.5k

This way there is ALWAYS a benefit to working, those with NO income get enough to live on but not figures offset by stupid rents cos of their chice for large families, and people who generally neeed no help dont get any, but still earn more than someone with a lower (or no) income.

You could move the max figure to suit. It would need to be double what the minimum requirement to live is - so if a couple (with kids) can expect to live (at a basic level) on £1400 per month including rent, then the yearly min would be £16.8k (after tax) - so around £24k including tax. That would make the "cut off point" £48k (as worker have to pay tax obviously). If its deemed to be £1200pm, then yearly thats £14.4k - so £20.5k before tax - meaning the Max level would be £41k.

paulmapp8306

Oh - all this is based on TAXABLE income, so if you qualify for a £3k top up, you actually receive around £2k in "credits", by the same toten if your unemployed and get the full top up of 1/2 the max income (so say max income is set at that £48k level) then you "topup" which is £24k would actually be around £16k in credits because the £24k would be taxable (that £16k giving you around £1333 pm to live on).

It would have the addeed bonus that the "tax allowance" could be scrapped. No tax free eliment to earnings as if your low paid you "made up" to the min standard of living.

Overall a much easier system to understand an impliment. It would be more cost efficient too.

Also, no "sick" benefits either as such. There would need to be a system to judge what "extra" people who are incapacitated need - be that to pay for care (which should be government provided), transport (government provided), house modifications(grant to pay for it), medication and med equipment (government provided) etc - but even if non gevernment provided there needs to be some kind of assessment and extra payments. What it WOULD do is remove the lazy, because if you cant work for med reasons (but need no further aid for things Ive mentioned), you get topped up to the minimum livable income like anybody else.

lemonjelly

Pimperne1 wrote: »

Not an expert on which allowances are paid without Means Testing but I believe the following are:

Pensions
Family Allowance
Some Disability Allowances related benefits
Winter Fuel Allowance

Pensions aren't means tested. Pension credit is.
Family allowance hasn't existed for years. Child benefit was a universal benefit until Georgie boy brought it in line with tax allowances.
DLA is not means tested or subject to income tax. Incapacity benefit is taxable, but isn't means tested, except for if you recieve an occupational pension. ESA is means tested, as is income support, JSA, housing benefit, council tax benefit, tax credits etc.

The vast majority of benefits are actually means tested. This causes a big beaurocratic problem, in that it creates a large incentive for fraud, & is also a nightmare to process.

chewmylegoff wrote: »

Isn't this sort of the purpose of the proposed universal credit? I haven't read up much about it, I just assume its to pull everything together and cap total payments.

The idea behind universal credit is more about a simplification of the benefits system. I advise on benefits & utilise a handbook that is almost 1500 pages long. There are almost 50 seperate welfare benefits, & there are additional issues with the fact that so many are inter-linked (ie if you get one, it passports you to another, or increases the amount of IS/JSA you may get for example).
Universal credit is supposed to reduce the amount of contact people need to have with DWP/jobcentres, reduce the number of claim forms needed, & basically simplify the system a bit. Hence, ESA, JSA, IS, hb, ctb & many other benefits will disappear, to be replaced by the one universal credit.

DLA will continue to exist in a form (currently heated debates happening about this). Carers Allowance appears to be an anomoly the government doesn't know what to do with, so they're leaving that as a special category (not much universal about it then is there?). Off the top of my head I suspect the pension credit changes will be included, but might be later rather than sooner.

Pimperne1

Thanks for your comments Paul but as someone who was once the Editor of an allowances publication once you start introducing caveats it becomes almost unworkable - it needs to be simple and basic (if a little uncaring to be workable). For example, we once tried to simplify an allowance that paid for some people's children to go to Boarding School. It was quite simple to start with - you are expected to serve away from your chosen home for a period and your wife accompanies you then you can send you child to boarding school for continuity of education (expensive but in this country it seemed "fair"). Then someone came up with the notable exception "unless you are serving in an area where it would be unreasonable for your spouse to join you in which case you may gain an exemption for your child to continue their education at a boarding school". Then people started chipping away at these two fairly concrete rules and eventually we had about 20 sub para exemptions that meant that pretty much anyone could put their child in a boarding school at state expense no matter where they were located (and whether or not their spouse was with them).

Make it simple and inflexible - we cannot afford for it to be anything but. The devious in our society will find their way through any little loop hole.

If I keep harping on about affordability its because this is the only test we should now be applying to our allowances packages (and once we have graded them in order of necessity then it should be relatively simple). If its not affordable for the country, no matter how inconvenient it might be for you, you cannot have it.

lemonjelly

Pimperne1 wrote: »

Make it simple and inflexible - we cannot afford for it to be anything but. The devious in our society will find their way through any little loop hole.

If I keep harping on about affordability its because this is the only test we should now be applying to our allowances packages (and once we have graded them in order of necessity then it should be relatively simple). If its not affordable for the country, no matter how inconvenient it might be for you, you cannot have it.

???
first off, we means test virtually all benefits (see above).
Secondly, you will have to have some flexibility in the system in order to account for peoples circumstances. If you don't have sufficient flexibility, you will have expensive human rights act cases going on. Simple example, men were refused widowed parents allowance as they weren't widows but widowers, despite the fact that they met every other criteria. Cue an expensive legal battle that cost a lot.

Fraud & error are the biggest drains on the benefits system, costing over £1bn a year. Eradicate fraud & error would make massive savings, but would be costly to do.

I also believe that there is a lot more fraud in the system than most accept, & more than ONS suspect. How do we tackle this? One thing I'd suggest, would be that a person caught committing definite fraud should be denied welfare benefits for a fixed period of time afterwards.

atush

Means testing is expensive(in admin and is subject to fraud), and universal credit is cheap (in admin not cost)

The govt thought about means testing winter fuel allowance but worked out the means testing would cost more than any amt of allowance 'saved'

paulmapp8306

Fair enough. No caveats them. Basic level for everyone - including pensions Everything "health" orientated to be supplied by the NHS.

So - Min to live on, and max before benefits stop. The ration of those two is the ration of benefits/earnings you receive. So min £20k and Max £30k, means benefits would be 2/3 the difference between what you earn and the max. £10k min £50k max would give 4/5th the difference.

Im sure there are still problems, no system with without them really, but it gets rid of the "lazy" (claiming incapacity ben when there not incapacitated) problems, the pension problems (as they get the same standard as everyone else), simple to understand. Rewards working, even 2 hours a week - and reduces the benefits burden of the country.

Pimperne1

lemonjelly wrote: »

???
first off, we means test virtually all benefits (see above).
Secondly, you will have to have some flexibility in the system in order to account for peoples circumstances. If you don't have sufficient flexibility, you will have expensive human rights act cases going on. Simple example, men were refused widowed parents allowance as they weren't widows but widowers, despite the fact that they met every other criteria. Cue an expensive legal battle that cost a lot.

Fraud & error are the biggest drains on the benefits system, costing over £1bn a year. Eradicate fraud & error would make massive savings, but would be costly to do.

I also believe that there is a lot more fraud in the system than most accept, & more than ONS suspect. How do we tackle this? One thing I'd suggest, would be that a person caught committing definite fraud should be denied welfare benefits for a fixed period of time afterwards.

Perhaps we could start off with them one at a time. Pensions (I assume the £5k pa is not means tested but if I am wrong then I apologies - the reason I think it is not means tested is that I expect to get it and I do not need it and there are many more much richer than I). If you are of retirement age and your income without a state pension exceeds, say, £20k, then you should have sufficient to live on - the figure might need some fine tuning but it should not be beyond the wit of man*(**)(***).

*In all circumstances where the male gender is used then it also includes the female gender (and vice versa)

**Except for professions where male/female are excluded

***Unless the proviso at "**" contravenes any human rights act, regardless of whether it affects anyone, in which case refer to proviso "*"