MSE News: Benefits cap comes into force

zagfles

Morlock wrote: »

Something is very wrong when a person working full time on minimum wage cannot afford to rent a one-bedroom flat, even at the LHA rate, which is in the bottom 30th percentile of affordability in the rental market, and needs to claim housing benefit.

Either wages are too low, rents are too high, or both.

Rents are way too high. Partly caused by high house prices, partly caused by all the hassles, red tape, and lack of rights someone gets over their own property when they let it out (as someone mentioned earlier), so landlords need to budget for this when setting rents. And of course some simply refuse to let to those on benefits because of this.

Morlock

gettingready wrote: »

I am copmaring 2 people that do both receive the same amount regardless of the fact that one may have been working for years and the other never done a day work.

The only circumstance in which that would be the case is where two claimants are both single, had no capital and no other income.

gettingready wrote: »

What advantages are there with CB JSA that IB JSA does not give?

Generally, capital and other household income is ignored. In the case above with two single claimants, any capital would not be considered for a CB claim. The IB claimant would not be entitled to any benefits over a set capital limit, whereas the CB claimant's capital is disregarded.
Or a couple where one person becomes ill and needs to claim ESA. A CB ESA claim would disregard the partner's income, an IB claim wouldn't.
Or a couple where one or both claiming CB benefits receive more than a couple both claiming IB benefits etc.

gettingready wrote: »

Yes I simplify - because it is that simple.

It is not as simple as you suggest.

zagfles

Morlock wrote: »

The only circumstance in which that would be the case is where two claimants are both single, had no capital and no other income.

Nope. It applies to couples as well. A couple with no contribution record would get exactly the same as a couple where one had a contribution record and the other didn't. In the first case they'd get income based JSA of £112.55, in the second case they'd contribution based JSA of £71.70 plus income based of £40.85, ie £112.55 in total, exactly the same.

Generally, capital and other household income is ignored.

Except for earned income (earned by the claimant), and pension income, ie probably the most common two forms of income

In the case above with two single claimants, any capital would not be considered for a CB claim. The IB claimant would not be entitled to any benefits over a set capital limit, whereas the CB claimant's capital is disregarded.
Or a couple where one person becomes ill and needs to claim ESA. A CB ESA claim would disregard the partner's income, an IB claim wouldn't.
Or a couple where one or both claiming CB benefits receive more than a couple both claiming IB benefits etc.



It is not as simple as you suggest.

Well yes, contribution based is less means tested. But the point is that, unlike the old days where those with a record got "unemployment benefit", and those without got "supplementary benefit", which was less, they're not the same base amounts. And as above you can end up with more in other benefits if you get income based.

Even Red Ed is jumping on the "contributory benefits should be more" bandwagon!

Morlock

zagfles wrote: »

Nope. It applies to couples as well. A couple with no contribution record would get exactly the same as a couple where one had a contribution record and the other didn't. In the first case they'd get income based JSA of £112.55, in the second case they'd contribution based JSA of £71.70 plus income based of £40.85, ie £112.55 in total, exactly the same.

And a couple both claiming CB JSA would receive £143.40, so not the same.

Morlock

Dunroamin wrote: »

I'm from the SE and £280 pw is a very high rent for a 1 bed flat . As examples, it's over double the LHA rate for Windsor, St Albans and Oxford (all very expensive areas) and even £25 pw more than the rate in Central London.

Not quite double Windsor, St Albans and Oxford which are all £150-£155, but yes, I'm struggling to understand how a single person could be affected by a benefit cap of £350, when most single claimants receive nowhere near that amount. It's a good hook for outrage, though.

"£350!!!!111!!! a weke!!1! People go to wurk and not earn that much, cut benifits!!!!111" etc etc etc

FBaby

All I ask when people voice this opinion is that they step aside from an outraged position and just look at it from a practical perspective. If benefit caps mean landlords wont rent to benefit tenants what then?

The thing is, from a practical perspective, you are saying that a single mum with 4 kids was up to now getting £740 a week in benefits and yet was just about making it? Surely if she is about to struggle, it is not because she is suddenly not getting enough but had been used to too much in the first place. You seem to be saying that she has not flexibility at all in terms of housing because she needs to use all the rest of her income on other things. This is what I find hard to believe. Housing should ALWAYS come first. If she then can't support herself and her children with essentials, then she clearly living in a too expensive home.

Surely with such an income, she would have had more than time to start saving to be prepared for the cut. I just cannot understand how someone getting £740 a week in benefits, with no travel to work and childcare costs could be struggling in the first place.

zagfles

Morlock wrote: »

And a couple both claiming CB JSA would receive £143.40, so not the same.

Yes. But you claimed it only applied to single people. That was wrong, it applies to some couples as well.

Ben_Reeve-Lewis

zagfles wrote: »

I think you're right that in that short-term it'll cost, but the whole point of the reforms (in general, including UC) is to make long term changes. The UK has the highest proportion of children living in workless household in the EU (other than Ireland), and by region Inner London is higher than anywhere else.

Why do you think this is? Do you think it's anything to do with the structure of our tax and benefits system? In particular the following features:

1) Benefits in other EU countries tend to more contributory - ie pay nothing (or not a lot in) and you get a lot less out.
2) In other countries families are supported more through the tax system than the benefit system, encouraging people to work and reducing marginal withdrawal rates for families
3) The higher your costs & needs (eg rent, children), the less incentive there is to work as the marginal deduction rates are sky high until you earn really serious money.

So you get the silly situation where people on benefits can have more children without needing to consider whether they can afford them, whereas people not reliant on means tested benefits often need to take a big drop in standard of living when they have kids, plus you get people living in places like Central London more likely to be unemployed than people living in depressed parts of the country.

In addition of course there's the cost of childcare, but there is a lot of support in tax credits plus childcare vouchers (which reduce taxable income and hence increase tax credits).

http://www.poverty.org.uk/18/index.shtml

Yes your right, and again this is the endless argument I have with my Missus, Frazzy. She always says we have to start somewhere. But my concerns about this particular way of 'Starting' is that it may not produce the desired results in time before costing us all more than the intended cuts were designed for.

I'm old enough to remember when Britain went decimal. For two years leading up to it there was a massive TV advert campaign, reminding everyone 6 times a night that changes were coming. Why didnt government use the same route?

As far as I am aware the DWP sent out a single letter which, having spoken to various recipients was so full of jargon they didnt get it and threw it in the bin. In my job I train tenants every other week in groups of 20. I am lucky if I find two people on the course who have even heard of benefit capping and universal credit. It takes me two minutes to precis and everyone looks suicidal. They just dont know what is about to hit them.

Going back on my main point you could take the view "Well they should know".....but the reality is, they dont, so what is going to happen? All of us are going to pay the bill and homelessness will go through the roof.

Cutting benefits does not change a person's mindset. It may do over time but while that culture shift is happening how are families to deal with it? how are councils going to cope? How will landlords be affected by it? will this affect the property market?

Benefit caps are akin to amputating a leg to cure an ingrowing toenail

Morlock

zagfles wrote: »

Yes. But you claimed it only applied to single people. That was wrong.

But you introduced an income-based claimant into the equation, when I was discussing the difference between IB and CB based claims. And even in your example, you have not factored in any capital.

zagfles

Morlock wrote: »

But you introduced an income-based claimant into the equation, when I was discussing the difference between IB and CB based claims. And even in your example, you have not factored in any capital.

No I didn't. I introduced a contribution-based claimant who has a partner, who is either not seeking work or hasn't got a record. Not one who is also claiming. And I've already said contribution based is less means tested, so I don't know why you keep banging on about that.

The point is that base amounts are the same. That is the issue which distinguishes us from other countries in the EU.