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

in Money Saving Polls
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Former_MSE_Sam_MFormer_MSE_Sam_M Former MSE
346 Posts
MSE Staff
Poll started 21 March 2016

Have benefits been cut too far or not far enough?

Iain Duncan Smith resigned from the Cabinet last week, the quoted reason being “disability cuts are not defensible in a Budget which rewards higher earners”.

Yet taking all benefit cuts as a WHOLE, not just disability benefits, over the past few years…

What is closest to your view?





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Thanks! :)


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Replies

  • edited 2 April 2016 at 11:44AM
    densol_2densol_2 Forumite
    1.2K Posts
    edited 2 April 2016 at 11:44AM
    I dont think so. There are both pro and anti benefit posters on here.

    I think the issue is " in a budget that rewards higher earners " The part that annoyed me in the budget was the reduction in capital gains tax ( which doesnt include residential properties - so like second homes ) WHY reduce CGT ? All it does is benefit those with a few bob as most people dont have high value items that would be included - yet at the same time the Gov whine on about deficit and saving money and reduce benefits for didabled. Its just wrong even though I do agree long term unemployed should see sanctions to get them into work.
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  • I agree with some cuts (and the benefit cap), I disagree with others.

    Either way, there are still far too many loopholes, far too many people playing the system. Claimants will always have a bad name whilst this is allowed to continue.
  • Also, to state the obvious, this thread should be in Discussion Time ;)

    (And has now been moved to the Arms?!)
  • edited 2 April 2016 at 11:44AM
    Former_MSE_Sam_MFormer_MSE_Sam_M Former MSE
    346 Posts
    MSE Staff
    edited 2 April 2016 at 11:44AM
    Thanks. We took the decision to move it back to the 'MoneySaving Polls' board as a more neutral place for discussion.
  • 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.

    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.

    Have some compassion people. Not everyone has had the same opportunities as you!
  • edited 22 March 2016 at 11:58AM
    jamesdjamesd Forumite
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    edited 22 March 2016 at 11:58AM
    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.
  • HappyMJHappyMJ Forumite
    21.1K Posts
    Forumite
    Cut everything...there's plenty of food banks and plenty of hostels if you really need a bed for the night. Someone not working could seek help from family and 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 would make every employer to take out accident, sickness and unemployment insurance for their employees that pays out until they reach retirement age or they find another employer. Force everyone to contribute a proper percentage of their income to a pension so there is no need for the basic state pension.

    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 and if they do some work then make the taper rate much lower so it's actually worth working. There's no point working if they take your benefits away pound for pound. I'd rather stay at home.
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  • 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.
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  • jamesdjamesd Forumite
    25.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    HappyMJ wrote: »
    I would make every employer to take out accident, sickness and unemployment insurance for their employees that pays out until they reach retirement age or they find another employer. Force everyone to contribute a proper percentage of their income to a pension so there is no need for the basic state pension.
    Did you know that the law already forces employers and employees to do those things? It's called National Insurance and employers pay 13.8% of earnings above a certain level for it, with employees paying 12% above a minimum and all the way up to around the higher rate income tax band.

    This compulsory payment system started around 1908 with the introduction of a state pension starting at age 70 with Labour Exchanges following in 1909 and National Insurance starting in 1911 to provide medical treatment and sick pay at 10 shillings a week for up to 26 weeks. Following the Beveridge Report in 1942 this system was greatly expanded.
  • edited 22 March 2016 at 1:55PM
    jamesdjamesd Forumite
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    edited 22 March 2016 at 1:55PM
    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?
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