New Style JSA - what happens after 6 months?

SXX

Tyton01 - What a breath of fresh air to read your comments.    I totally agree with you 1) that benefits should not be means tested during the pandemic as people lost their jobs through no fault of their own.  So many people on this forum fail to see this.  2) I agree that people are having to use their savings to get by esp when they DIDN'T GET SUPPORT IN THE FIRST PLACE - so true; 3)  Furlough was never means tested either - again so true.
Sadly many people who comment on this forum really haven't clocked any of the above.

zagfles

1) People lose their jobs through no fault of their own outside of pandemics too you know...

2) ...and then have to use their savings when contribution based payments run out, or to to top them up

3) Furlough was intended to preserve jobs, keep them open rather than companies making mass redundancies.

MattMattMattUK

@SXX
It really does depend and means testing is a complex issue, it is not a simple as removing it completely, but I also think that the £16k threshold in savings should not apply at all, regardless of a pandemic, if people have paid in then they should get the same support as others, regardless of how much they have in savings. I also do not agree with the difference in support for homeowners vs renters, if someone loses their job they should be supported to the same level regardless of if they are a renter or a homeowner, it should be equal and based on employment circumstances, not living arrangements.

In terms of the "support" people did or did not get, that is a somewhat more complicated situation, I understand that CJRS and SEISS were far from perfect, but they also did a lot of good as well. I say that as someone who has seen a huge drop in income and has not benefitted from either (or any government support). Whilst they were not means tested they were also capped, so those who had been paying in a lot of tax got proportionally less help than those who had been paying in less.

SXX

zagfles said:

1) People lose their jobs through no fault of their own outside of pandemics too you know...

2) ...and then have to use their savings when contribution based payments run out, or to to top them up

3) Furlough was intended to preserve jobs, keep them open rather than companies making mass redundancies.

Losing your job in 'normal times' is different to losing your job through a pandemic. The country and therefore the economy was shut down during the pandemic.  In normal times during the various recessions, downturns etc etc, the economy/country is not locked down - BIG difference. 
Yes during normal times people are expected to manage the financial ups and downs of their lives through using savings etc etc but a pandemic is a completely different scenario. 
Sure agreed that furlough was to preserve jobs and hopefully it will preserve some but I suspect that there will be mass redundancies because furlough ends today so basically I suspect the reality is that furlough just delayed those redundancies.

SXX

MattMattMattUK said:

@SXX
It really does depend and means testing is a complex issue, it is not a simple as removing it completely, but I also think that the £16k threshold in savings should not apply at all, regardless of a pandemic, if people have paid in then they should get the same support as others, regardless of how much they have in savings. I also do not agree with the difference in support for homeowners vs renters, if someone loses their job they should be supported to the same level regardless of if they are a renter or a homeowner, it should be equal and based on employment circumstances, not living arrangements.

In terms of the "support" people did or did not get, that is a somewhat more complicated situation, I understand that CJRS and SEISS were far from perfect, but they also did a lot of good as well. I say that as someone who has seen a huge drop in income and has not benefitted from either (or any government support). Whilst they were not means tested they were also capped, so those who had been paying in a lot of tax got proportionally less help than those who had been paying in less.

yes completely agree with you - if people paid in then they should get the same support as others (regardless of savings) and there should be no difference between renters or home owners - they should be supported to the same level.

epm-84

Regardless of whether there's a pandemic or not there's two things which should be reviewed:
1. The £6,000 and £16,000 figures for mean tested benefits.  These have not increased with inflation over time.
2. Whether money saved in Help2Buy and Lifetime ISAs should count towards these limits.  A Lifetime ISA can be used as an alternative to pension plan (especially for a self-employed person), a pension plan doesn't count to the savings limit but an ISA does, so in the current pandemic no exclusion for Lifetime ISAs can be a double whammy for the self-employed who miss out on other state support.

Grumpy_chap

SXX said:

1) that benefits should not be means tested during the pandemic as people lost their jobs through no fault of their own.  

For the purpose of discussion, and the suggestion that benefits should not be means tested, would you apply that to all benefits, or is that comment related to JSA only?
Would you still pay to the very rich, say £1m in liquid assets?

SXX said:

if people paid in then they should get the same support as others (regardless of savings) and there should be no difference between renters or home owners - they should be supported to the same level.

What level would you set that support at? 
What would be the basis of calculation of the level of support to be provided?

zagfles

epm-84 said:

Regardless of whether there's a pandemic or not there's two things which should be reviewed:
1. The £6,000 and £16,000 figures for mean tested benefits.  These have not increased with inflation over time.
2. Whether money saved in Help2Buy and Lifetime ISAs should count towards these limits.  A Lifetime ISA can be used as an alternative to pension plan (especially for a self-employed person), a pension plan doesn't count to the savings limit but an ISA does, so in the current pandemic no exclusion for Lifetime ISAs can be a double whammy for the self-employed who miss out on other state support.

Yes good points.

gary83

epm-84 said:

Regardless of whether there's a pandemic or not there's two things which should be reviewed:
1. The £6,000 and £16,000 figures for mean tested benefits.  These have not increased with inflation over time.
2. Whether money saved in Help2Buy and Lifetime ISAs should count towards these limits.  A Lifetime ISA can be used as an alternative to pension plan (especially for a self-employed person), a pension plan doesn't count to the savings limit but an ISA does, so in the current pandemic no exclusion for Lifetime ISAs can be a double whammy for the self-employed who miss out on other state support.

I agree with point 1 but disagree on point 2. 

Anyone can use a LISA as an alternative to a pension plan it’s not just the self employed It might have affected however it is not necessarily the best option, although the money remains tax free provided you don’t want to access it prior to turning 60 or buying a first house it might still be more tax advantageous to opt for a pension if you’re a higher rate tax payer. Additionally whenever you open any sort of investment or savings account you sign to say you’ve read and considered the terms and conditions of the account, the negatives of a LISA (which we all agreed to when we opened them) Is that the money is not exempt from Universal credit calculations because you can access the money anytime prior to aged 60 (unlike a pension) and there are penalties to be applied if you choose to withdraw the money (noting that the penalty rate has actually dropped this FY due to the pandemic, something that the treasury didn’t have to do)

MattMattMattUK

Grumpy_chap said:

SXX said:

1) that benefits should not be means tested during the pandemic as people lost their jobs through no fault of their own.  

For the purpose of discussion, and the suggestion that benefits should not be means tested, would you apply that to all benefits, or is that comment related to JSA only?
Would you still pay to the very rich, say £1m in liquid assets?

If it were dow to me yes I would pay JSA to unemployed millionaires, if they have a million in liquid assets the chances are it will be more than paid back in their taxes anyway.
Within reason I agree with the principle that benefits should be circumstances based rather than means tested. I accept that things are more complicated than that otherwise some people could stack all their income into a few months a year (as people with large SEISS payments have done whilst claiming UC) so it is not a simple issue to solve.

Grumpy_chap said:

SXX said:

if people paid in then they should get the same support as others (regardless of savings) and there should be no difference between renters or home owners - they should be supported to the same level.

What level would you set that support at? 
What would be the basis of calculation of the level of support to be provided?

I would set housing benefit nationally, this would encourage better distribution of people and resolve the issue of paying huge amounts of benefits for people to live in areas where the vast majority of taxpayers can not afford to live. It would also solve one of the major distortions in the housing market, which is he current implementation of housing benefit. 

There should be two levels, longterm unemployed and low earner, long term unemployed set lower than the lower earner threshold, with an age modifier (younger encouraged to live in shared accommodation as renters always have) With rates for single person, couple, and one and two children on top, capped at two children. For unemployment benefit as a whole I would move to the German system of unemployment benefit, completely negating the need for housing benefit for the short term unemployed. 

As for the rate itself that would need some serious evaluation, a rough estimate would be around £400 pcm for a single, under 35, rising to £600 for an over 35. A couple supplement of around £200, and similar for children.