From the TUC

Inadequate benefit rates

14 Jul 2011, by in Society & Welfare

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.

3 Responses to Inadequate benefit rates

  1. jay
    Jul 14th 2011, 9:12 am

    I live on £422 a month and am always in debt. Have two children, get housing benefit and council tax benefit. It is a hell of a struggle. Currently trying to find a job but not qualified for much although I am studying for a degree.

  2. David Gillon
    Jul 14th 2011, 4:53 pm

    And next year the situation will worsen still further, as the 12-month time-limiting of Contributions Related ESA kicks in and those with more than £5000 of household income or £6000 of savings (including pension funds), find their benefit income slashed, in many cases to nothing whatsoever. Clearly I was a fool to save while I was well enough to work, because now that I am too disabled to work the government expects me to plunder my savings to survive, no matter that I have paid far more into NI than I could hope to draw out at £96/wk.

    Dilnot argues that the savings of people in need of care must be protected if we are to be an ethical society, who is going to make the same argument for those too disabled to work?

  3. Jo
    Jul 18th 2011, 1:32 pm

    In my view we must all work together for a fairer socirty and more equitable distribution of wealth. Too often low paid workers and disabled people’s forums slag off the unemployed using labels such as ‘scroungers’ rather than pointing the finger at those who have grown fat and even richer and avoid their tax committments.