Inadequate benefit rates
How does anyone manage to live on social security benefits? On Tuesday, I noted that the average weekly payment to someone receiving Incapacity Benefit or Severe Disablement Allowance was £96.64 – that is being replaced by Employment and Support Allowance, where the average weekly payment is £81.71.
Yesterday, the Department for Work and Pensions published their annual Abstract of Statistics for Benefits, National Insurance Contributions, and Indices of Prices and Earnings. The most useful information in this book is in the pages detailing benefit uprating since the war – each increase, together with what percentage of average earnings that represented. There’s tables for different benefits, and most of them have lost value over time – the exceptions are Pension Credit, Income Support for couples with young children and Child Benefit, which rose under the last government.
But benefits for unemployed people did as badly under the last government as under those that preceded it.
We can see that the pre-1979 policy of increasing all benefits in line with the higher of prices or wages maintained the value of Unemployment Benefit till Mrs Thatcher scrapped that rule. Since then its been pretty much downhill all the way. The notion that a benefit that is worth just a tenth of average earnings is so generous that it will deter people from working is bonkers.
And today I came across a report by Donald Hirsch that I should have read when it came out last week. A minimum income standard for the UK in 2011, published by the Joseph Rowntree Foundation, calculates a 2011 ‘minimum income standard’, based on what members of the public think people need to achieve a socially acceptable standard of living. Donald estimates that
A single person needs to earn at least £15,000 a year before tax in 2011, to afford a minimum acceptable standard of living. A couple with a single earner and two children need at least £31,600.
Compare that with the £96/£81 we expect disabled people to live on. Future generations will be disgusted by us – they’ll look on us the way we think about some of Dickens’ less pleasant characters.