Category: Social security

This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.

The DWP misleads tenants about benefit changes

I know that Scottish Housing News may not be everyone’s constant study,  but they’ve been covering an interesting dispute about housing support.  The Director of Angus Housing Association, Bruce Forbes, had talked to the Dundee Evening Telegraph, expressing some criticism of the coming introduction of Local Housing Allowances in social housing, and particularly the ‘horrendous’ effect on younger single people.  The DWP replied with a general justification of the policy:

These changes are about restoring fairness to the system and ensuring that those on benefits face the same choices as everyone else. The reality is, nothing will change until April 2019, and existing tenancies signed before April 1 2016 will be unaffected.

That prompted a furious public response from Mr Forbes.  The DWP statement was irresponsible, “blatantly untrue” and “totally false”. The DWP were “peddling lies and misleading the public”.   Since then, the Scottish Federation of Housing Associations has expressed concern about the inaccurate information.   (I should declare an interest here; I have previously been a consultant with SFHA  and have worked with them on issues about benefits.)

There’s a point at which propaganda tips over into misinformation, and the DWP statement has done that – claiming that existing tenants won’t be affected.  This is not right – everyone coming onto Universal Credit will be subject to the new rules, and in due course that should be everyone of working age.  The main problem here is, of course, that people with very limited resources are suffering further cuts.  The same cuts also threaten the financial security of social landlords, which is another reason that the housing associations are worried about it.  Having said that, it is also worth remarking on the secondary issue.  The DWP has to make sure that the information it gives out to claimants is reliable, and that has to be more important than scoring political points in the local papers.

The IEA fails to understand some basic facts about disability

The Institute of Economic Affairs has published a briefing on Disability Benefits.   They claim that the cost of disability benefits could be reduced by making sure that more people with disabilities went into work.  The approach has been sympathetically reported in the Mail and the Independent.  Unfortunately, the briefing is written with a cavalier disregard for the most basic facts about disability benefits, which rather tends to undermine any arguments they wish to make about what should be done.

There are three quite simple reasons why a greater emphasis on work will not do very much.

First, disability benefits are mainly provided for people who are not part of the labour market.  Half the population with disabilities consists of elderly people (the figures used to show more than half; the 2011 census puts it at 48%).   Claims for Attendance Allowance, and a third of the claims for Disability Living Allowance, are made by older people.

Second, disability benefits are provided for many reasons which have nothing to do with work – among them meeting special needs like mobility, supporting care,  compensation for injury and even (in War Pensions)  reward for merit.  The main justification for DLA is not really to cover extra costs, as many suppose, but to compensate for long-term low incomes of people with disabilities.   None of these reasons disappears if people are in work.

Third, and following from that, many disability benefits (such as DLA and PIP) are provided regardless of people’s income or employment status.  The main benefit supporting disabilities for people of working age who are not in work is Employment and Support Allowance – and while it is true that ESA has been used to cover a hotchpotch of different circumstances, sometimes including disability, it is a sickness benefit, not a disability benefit.  Disability is neither a necessary or sufficient reason for getting it.

It’s true that the numbers of ESA claimants have persistently failed to go down, unless it is by the rather brutal approach of using disentitlement and sanctions to throw people off benefits with no income.  The main reasons why so little has been achieved for ESA claimants  are

  • the failure of psychiatric services to achieve valuable outcomes for people with long-term mental illness
  • the use of ESA as the low-income equivalent of schemes for early retirement
  • the preference of employers for employees who do not have long-term limiting health conditions
  • the penal treatment in the benefit system of part-time and therapeutic work, and
  • the perverse emphasis on individual effort to find a job, mainly focused on people who are too ill to work.

If what the IEA is saying is that more people on ESA need to work, they have about 25 years of policy failures to show that policies which try to do this are ineffective.

 

California gets rid of a nasty rule

It appears that the rule in California, which stopped families claiming extra benefits for any child born while they were receiving welfare payments, has been abolished.  The ‘maximum family grant’, introduced in 1994, is the model for the scheme in the UK, about to be introduced in April, to limit benefits to the first two children; both are based in the idea that people who receive benefits shouldn’t have babies.  Unusually the measure was opposed simultaneously by both the Catholic Church and Planned Parenthood.  Because having children is not always a choice, it included exemptions for mothers who had tried to be sterilized and those who had been raped. There is no way of administering a scheme of this type without intrusive inquiries, injustice and distress.

Stopping in-work benefits for EU workers

It’s been widely reported (for example, in the Times, the Mail and the Sun) that Theresa May has plans to restrict in-work benefits to EU workers, putting them on the same footing as non-EU claimants.  I’ve been puzzling about what this means.  The only benefits specifically mentioned in the reported briefings are Tax Credits, which in any case are supposed to be being replaced by Universal Credit.  In most cases non-EU migrants are entitled to benefits as long as they meet the various tests – residence, presence or habitual residence,  depending on which benefit we’re talking about.  So, for example, to be entitled to Child Tax Credit, Working Tax Credit or Child Benefit a non-EEA migrant is expected to have lived in the UK for three months.  Refugees and family members don’t have the three month test; but both EU and UK citizens returning from abroad, who are not working, are subject to the  test.  If Ms May was saying only that there’s to be a three-month residence requirement for everyone, she wouldn’t need to wait for Brexit; it would be compatible with EU law now.

The main restriction that actively affects non-EU migrants is something quite different:  the restriction of the terms of entry on their visa, where they undertake not to be dependent on public funds and are threatened with deportation if they do.    Treating EU migrants in the same way could only happen after Brexit.  It would mean that the issue is not mainly about benefit law at all, but about the way that Britain deals with foreign citizens.  It’s only workable if we have a straightforward way of identifying who is, and who is not, a migrant, and a clear record of the terms of entry.  That could affect millions of people.

Some responses to the consultation on social security

The responses to the Scottish consultation on social security have been  available online for about a month, but I’ve just got round to sifting through them.  I’ve not looked at most, because there are 460 of them, but what I have read reflects a great deal of thoughtful engagement, from individuals, professional groups, local authorities and the third sector.   (There are also some things to disagree with,  but I’ll leave people to find those for themselves.)

Here are some links to get you started:

It’s difficult to make sense of the submissions by reading them one by one – which is all that was possible at first.  The web page has been redesigned in a way that pretty much invites readers to enter a key term  – “cold weather”, “funerals”, “maternity”, “hearings” and so on – to see what people are saying about the topic.   However, that doesn’t work for every topic – there are 196 submissions with bits relating to assessments.  It also doesn’t show material from entries that have referred to evidence in PDF documents.  So, for example, the fullest discussion of Industrial Injuries benefits I’ve found so far is made by Thompsons Solicitors, but it doesn’t come up on a search.

The welfare cap is due to be breached

The ‘welfare cap’ was another wizard wheeze from the government that George Osborne hoped would embarrass opponents in the future.  The idea was to limit total spending on some benefits to a set figure, so that if the cap was exceeded, the government would then have to explain why.  There has just been a debate on the welfare cap, and (despite a particularly well-informed contribution from Ian Blackford of the SNP) it has said nothing much.  The motion approved in the House was this:

“this House agrees that the breach of the Welfare Cap in 2019-20 and 2020-21, due to higher forecast inflation and spend on disability benefits, is justified and that no further debate will be required in relation to this specific breach”.

There are good reasons, however, why expenditure on benefits should on occasions go up.  The main one is that many benefits are designed to go up when people’s incomes go down.  It’s also intriguing to note that the government is now expecting to spend more on disability benefits, when it initially claimed that PIP was going to save money (and fined Northern Ireland on that basis).

There is, of course, a simple way to make sure that the cap is not breached, and that would be to increase the level of anticipated expenditure to a more realistic figure.  But it’s far from clear that the global figure is telling us very much about what governments are doing.  Most benefits aren’t really ‘spent’ – they’re transfer payments, moving money from one person to another – and precious little work has been done to see if the global extent of transfers really has much impact on the broader economy.   It’s much more important what effects the benefits have on people’s lives.  In evidence to the Treasury committee yesterday , Chancellor Philip Hammond was refreshingly candid about the fact that he’d cut the living standards of people on low pay, and said directly that it was something the government had intended.

“We were elected on a manifesto that included the commitment to reduce welfare spend, particularly the spending of welfare on in-work benefits … self-evidently, the preponderance of people receiving in-work benefits will be in the lower income deciles. … At the heart of this is the decision to reduce spending on working-age welfare.” (16.21-22)

The NAO criticises the inconsistent application of sanctions

The National Audit Office has published a critical report on benefits sanctions. In 2015, 400,000 claimants were sanctioned, out of 3.5 million claimants of sanctionable benefits; the NAO reports that 24% of JSA claimants have been sanctioned.  The application of sanctions is not properly monitored,  and the DWP does not know what effect this is having.  The NAO raise doubts about consistency, accuracy and timeliness.  Their overall conclusion is this:

The Department has not used sanctions consistently. Referral rates vary substantially across jobcentres and providers, and have risen and fallen over time in ways that cannot be explained by changes in claimant compliance. While the Department is correcting errors earlier, it needs to do more to show that the quality of referrals and sanction decisions has improved. Our review of the available evidence suggests the Department’s use of sanctions is linked as much to management priorities and local staff discretion as it is to claimants’ behaviour.

The DWP, as is their wont, have blamed inconsistencies on the front line staff (p 26).  We should be careful what we wish for.  It’s perhaps worth putting this together with the information from the Couling Report, which denied (however implausibly) that the DWP had any centrally directed policy to impose sanctions or targets governing their number. If the DWP does as the NAO asks, it will have to.

There are much more serious concerns about sanctions than their inconsistent application.  There are reasons to question their purpose, their scope and their legality.  I hope that when the Public Accounts Committee will go further when they report on their inquiry.

Changing Universal Credit (again)

There are two days left for the consultation about limiting Tax Credits and Universal Credit to two children.  I’m not making a submission.  This is not a consultation about the policy, but about what exceptions should be made, including multiple births and the children of rape.  It’s a depressing process, which illustrates a general problem: if governments create stupid rules they then have even more problems to stop the anomalies  from spiralling out of control.

I’ve some sympathy for a comment made from the IFS in their work on the Autumn Statement, which included a change in the UC taper rate but maintained the swingeing cuts in the work allowance.  Stuart Adam pointed out that to date there have been four changes in the work allowance, one to childcare support and now one to the withdrawal rate.  It’s exceedingly difficult to know what the effect of cumulative small changes to Universal Credit will be, and maybe they shouldn’t be done unless we do.

 

 

Evidence to the Social Security Committee: too much water coming through and not enough fingers

On Thursday 17th, I was part of a group of academics giving verbal evidence to the Social Security Committee of the Scottish Parliament, concerning the future development of social security in Scotland.  The verbal record of the proceedings is here, in the section headed ‘Work Programme Priorities’ (that’s about the future work of the Committee, not the Work Programme).   There is also a full video of the committee (our discussion starts at 1:03).  As I can be fairly sure that most of you won’t read or listen to that discussion, here’s a shortened version of my opening statement:

… there is often a tendency to respond to the current set and diet of benefits as a laid table. The terms on which benefits are delivered always determine what it is possible to think about for the future, and it becomes extremely difficult to adapt to change or to anticipate change because of the huge pressure to make up for what has gone before. We saw that in relation to the bedroom tax … [and] tax credit cuts  … however, I am afraid that it will not be possible to deal with most of the cuts. Quite simply, there is too much water coming through the dyke and you do not have enough fingers.  …

It is important to look to the future and future priorities for the ways in which benefits are to be delivered in Scotland. There are some very large issues of huge importance coming at Scotland at great speed. The Scottish Government will take responsibility for what is, admittedly, a minor part of the total social security system but one that, nevertheless, represents a huge administrative, practical and financial challenge. That must be the priority for future work over the next five years.

In some ways, it is a minefield. Whatever happens—no matter how well the system works—we all know that, with a large system with multiple iterations that deals with tens of thousands or even hundreds of thousands of people, whatever can go wrong will go wrong, and the Scottish Government and the Scottish Parliament will get the blame when it does. We have to accept that as being part of the enterprise that we are engaged in. It is clearly important to try, as far as possible, to promote the kind of agenda that the Scottish Parliament has previously adopted relating to respect, dignity and fairness to ensure that the system works properly.

I know that it is tempting to focus on specific policies… I would argue that, rather than trying to adapt specific policies on each and every thing, the focus should be on something that is fundamental to everything, and certainly to dignity and respect: developing the administration and mechanics of benefit delivery.

There’s lots more in the full verbal report.

Redesigning funeral benefits

I was at a conference today on funeral poverty, part of the Scottish Government’s agenda for #fairerscotland.   The current system of support is very limited, and horrendously complicated.  There are five elements in a claim: the circumstances and resources of a claimant, the circumstances and resources of the deceased, the arrangements made for a funeral, the relationship between the claimant and the deceased and the situation of other relatives who might potentially pay instead.  I argued that the system could be simplified most effectively if we treated the liabilities and any claim as a matter for the estate of the dead person.  That position didn’t attract much support at first, but as the discussion went on more people saw the point of it.  This is virtually the only circumstance in the UK system where we directly oblige family members other than spouses to take on the financial liabilities of their adult relatives.

It’s always a pleasure to learn from people who know much more than I do, and the representatives from the organisations for funeral directors were particularly impressive, not just for their detailed knowledge but also for their sensitivity and awareness of the issues. Unfortunately, the profession isn’t well regulated, and I was shocked to hear of bodies in England being kept in the freezer for months until fees could be met – in one case, for 25 years.  Some problems can’t be solved by the market.  There’s a strong argument for decommodification, and while there will always be some elements of the process that depend on personal choice, there’s also a case for reducing the role of payments and charges, for example by direct provision of burial lairs or cremation.