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26k Benefit Cap
Posted by Spartacus Mills on 1 February 2012 - 3:56pm.
What do you make of the proposed cap? Whilst £26k is more than I take home after tax, I recognise that some families live in very difficult circumstances due to illness, disability, number of dependents, location...etc, and therefore find it hard to get by on less.
For me, it seems odd to cap benefits at an arbitrary figure. Surely you're either entitled to the benefits you receive, or you aren't?
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It should be capped at £21,000
Because that's what MP's are allowed...
They've got to cap it somewhere.
Like it or not, there are parts of the country where abusing the benefits system is the family trade, passed down from generation to generation: if it takes something like this to curtail it, then I'm fine with it.
*Goes for a lie-down after realising I've just been defending a ConDem proposal...*
Abusing the system
I'd like to see them attempt to stop people abusing the system. It'd be fairer that way, it seems. The only thing is, any policies which involve giving claimants medicals is always portrayed as an attack on the sick.
Yet
Disability Benefit fraud has been calculated at 0.5%, which is 0.5% too much, but in the grand scheme of things...
Interesting
Is that for Incapacity Benefit or Disability Living Allowance?
DLA
.
Anyone...
recieving incapacity benefits has a medical and regular medicals thereafter. The change is in using private companies who are paid by the number of people removed from the register. This encourages them to reject nearly all the sick most of whom will win on appeal.
The real point of the whole procedure is to push people on to the lowest paying benefits and to have a convenient set of scapegoats for the lowly paid workers to blame everything on.
I agree
I don't see the logic of a cap - if a person/family needs the money, they need the money.
I don't know enough to say whether there really is a serious problem with 'benefit scroungers' in the UK, but even there is I don't think that limiting everyone's claims is the answer.
I think the issue is
Government becomes a huge player on the private rental market and forces rents up because it needs to house huge numbers of people. Short term - cheaper than building social housing. Long term - much more expensive because merely by having to perform this function government is artificially inflating its own rental bill.
Much as I disliked the Tory selling off of council housing - robbery of the public purse to my mind OOAA - I can see how the big city Labour machines had a grip on power and tame votes through patronage that was profoundly unhealthy and corrupting. The damage done to the Northern cities by Labour councils in the 60/70s is astounding.
But low paid workers need somewhere to live and limited social housing is being built. £26k is a lot of money unless its all going on rent - probably keeping the BTL market afloat too...
Private landlords
Is the alternative not that large rents paid for entirely by housing benefit going straight to the private landlord will dry up, forcing the cost of renting these houses to drop as demand is exceeded by supply. It's not just the claimants themselves that exist/benefit/sponge (delete depending on the paper of your choice)from benefits, it's the industry around them as well.
Agree..
But the govt will be terrified of knackering BTL - because then property prices drop - and the banks are all then undeniably bust (well they are anyway).
Nasty business all round, this
Indeed
but unless the elephant in the room is tackled, then we won't get anywhere.
There will be some undoubtedly daft folk who bought at the height of the BTL market and need to charge ridiculous rents to pay the mortgage. There will also be some that are making super profits as slum landlords charging huge amounts to the government for properties that they paid off a long time ago and will deserve to have their super-profits reduced. And, they'll be loads in the middle who'll find their property investments need to return lower profits than before in order to meet demand.
There's no reason the banks will lose out anymore than they already have.
Believe me
I do agree with you. Another facet to the property bubble that has done such colossal damage
not including the disabled and long term sick
But aren't there a lot of people living in expensive to rent properties with more children than they can afford to feed and clothe who are in receipt of benefits while other people limit their lifestyle to what their income will support? I'm naturally left of centre but this annoys me as does the LibDem MP last week who said that the solution was to "tax the rich". OOAA
This is illuminating
http://www.bbc.co.uk/news/uk-16812185
Not qite sure what the BBC's agenda is in choosing this individual family to demonstrate someone affected by the benefits cap, but he needs to save £82.40 per week from the £15 weekly Sky TV, £32 weekly mobile bill and the weekly 24 cans of lager and 200 cigarettes....not to mention the £91 "others" to cover white goods and clothes (that's nearly £5000 post tax).
All in all, not too difficult to see where savings can be made, albeit with some small sacrifices. Is that what the BBC were hoping to demonstrate? If it was to feel that this family will be in poverty, then it's backfired.....
The claimant said of the drop "I see eight people here having to choose between eating or heating." whereas others see fairly reasonable other choices....
24 Cans Of Lager
All of £12 in my local supermarket. Hardly excessive spend. Although that £240 a week shopping...That's my monthly shopping bill. But then not counting my travel expenses my take home per month is only 19k. With travel included I get that magic 26k take home. That's sole income for our house. And it's not enough for in private rents to live without excessive belt tightening in most of the south east. In London forget it, the average rent on a 1 bedroom flat across there is about £1000.
Ah, that 240 a week shopping bill
...he's got six kids!
I hope the kids
aren't having some of the £3,700 worth of booze and fags they buy each year.
I agree, odd choice
I am a fairly soft-hearted, liberal lefty when it comes to benefits and freedom of choice, so I have no problem with the idea of leaving room for discretionary spending on some of life's little luxuries. But aren't ciggies over £5 a pack now? So they're spending over £50 a week on them?! And his excuse - that his wife tried to quit but got thrown off a 'course' - is pathetic.
Also, I fully support the notion that someone with a particular skill set should be given extra time to find a suitable job, rather than having to take the first thing that comes along, but if there really has been no demand in his industry for 10 years then surely he should have thought about a career change by now!
Creating ghettoes
I think a major effect of this is going to be that the less well-off will be priced out of their housing in major cities, especially London. What we'll probably see is a tidal shift of poorer people moving out to the immediate suburbs and the better off swooping in to grab bargains in suddenly up and coming areas. We'll have concentric circles of wealth around our city and - effectively - no go areas where only the poor live.
Yes, 26K is a lot, but just because someone receives that it doesn't make them a scrounger. I suspect it's been chosen as a threshold for political expedience - even those on the left are going to splutter into their yoghurt at the thought of people getting all that cash for doing... nothing!
The tories aren't trying to solve a problem, they're trying to make political capital out of waging war on benefit cheats, as no one can complain about that. I guess they'll get their cheats -at least some of them- but they'll take out many needy people in the process.
Not sure that there would be the demand
Someone on £26k of benefits would be equivalent to a £50k earner after tax. I don't believe there's that many people desperate to pick up a property in an up and coming area. Much more likely is that there will be ghettos of unsold and unrentable properties caused by the lack of housing benefit going straight to private landlords. Then the price will fall and the same people can continue to live there....
If you're a private landlord getting, say £1500 per month in housing benefit for your house, and the tenant tells you he has to move out as he'll only get £1000 in future, you have to decide whether to just accept that and continue to have a tenant or chuck him out and hope you can fill the void.....depending on the landlord's situation, I bet a lot will go for the latter option.
I think the government claimed that £26k on benefits was equal
to £33k of earned income. As for the amount of money paid to private landlords, why don't councils buy or build suitable housing stock? Is it a legacy of the Thatcher era sale of council houses legislation?
I've just worked it out
Based on normal earnings, it would be someone on £34750 who would take home exactly £26k without any peculiarities in their tax affairs.
There are plenty of families (the majority?) who earn less than that in the UK now.
Maybe
But if landlords have to reduce rents, many would prefer to get rid of BTL properties; the increase of supply of homes on the market will make them slightly more affordable to some, but still out of reach to many. More better off people will move in, poorer people will still be forced elswehere.
And this assumes that it's only private landlords in the game. Housing Associations provide a lot of housing but still have to charge a certain amount if they're going to maintain their stock. Ultimately they're going to start buying in cheaper areas where they can charge more affordable rents.
As a leftie myself
I am tempted to point to the old theory of "to each according to their needs". An arbitrary cap will stop some people who are over-claiming but also stitch up a lot of people with genuine needs.
Someone once said that the definition of a conservative is somebody who would rather see ten innocent people hang than one guilty person walk free while a liberal would rather see ten guilty people go free than one innocent person hang. (It was an American quote so the terms are used in the American sense) and the whole debate about benefits seems to have polarised along those lines.
The Daily Heil or similar will find the most outrageous example they can and quite happily imply that everybody gets that level of benefits.
I see benefit manipulation and fraud in the same way as I see tax manipulation and fraud: it isn't right but why not tackle the guilty instead of everybody? It is like doing an operation with a chainsaw instead of a scalpel. Nobody points at a tax fraud and says that this employed person is a cheat so all employed people must be cheats?
The sad thing is that a large chunk of benefits is housing benefit which goes straight to landlords for often artificially-inflated rents and they are the real beneficiaries.
I know loads of people on benefits, family and friends. None of them are having a great time. Yes they have a big TV (which the tabloids seem to think is a crime. They won't be happy until unemployment means living under a bridge) but don't have a standard of life I would enjoy. Most don't ever get to go away on a holiday, maybe a week on a caravan site every couple of years for example.
What we keep forgetting is that a family on benefits just scraping by is not news. One that genuinely does have to choose between eating and heating is news, and one that manages to get a posh car and package tours on the taxpayer is also news - because they are exceptional, although the first group are likely to become less exceptional over time.
And don't get me started on the bedroom tax!
£26k a year
Is more than some hardworking families will bring in in a year. Strikes me as a reasonable amount of support unless there is a long term illness or disability which will require more support.
*"hardworking families" klaxon*
Dread phrase!
How does one
Differentiate from a lazy family though?
You've fallen into the trap
of believing that people with jobs are hard-working, and people without them are lazy. Job done, Fleet Street.
I don't think I did
My point was that there are some families full of hard working people earning less than £26k. There are also some families full of lazy people earning more than that (I have met them - they probably are lucky as much as lazy).
I truly believe that the majority of families depending on benefits are not lazy, work shy layabouts. But I also believe that there are some families who have decided that a benefit derived income serves them well and will not do anything to change their position. That's not luck, that's lazy.
I think you may have fallen into the trap of thinking I have fallen into the trap set by Fleet Street. I'm not sure who set the trap you may have fallen into. If indeed you actually did.
How does two
Differentiate from a lazy family though?
Private Rents
OK, I live in the South West, in a small town. Not much in the way of council properties nearby, so if I had to be housed on benefits I'd be on private rent.
Remember, small town, not London now. A 3 bedroom house on average down here is £800 a month, and rising. So take that as rent, add say £100 a week on food/groceries, which is keeping fairly low the way prices are rising and that's half the 26k gone already on the rent and food alone.