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Welfare reform

Created on Wednesday, March 7th, 2012
by Peter McCormack

Simpler benefits for all or simply no benefits?

From October next year the coalition government will introduce a new benefit for working-age people.  At first glance its sounds very attractive.  Universal credit will replace several means-tested benefits and tax credits with the aim of being simpler and making people better off working than not.  Surely that’s what everyone wants.

Certainly our benefits system is a minefield and many claimants have no idea what they are entitled to.  It does need to be simpler.  Similarly it is frustrating for many people that they seem to be penalised if they get a job that is part-time or is low paid.

Universal credit

Universal credit is a key part of the coalition government’s welfare reform package.  As Secretary of State for Work and Pensions, Iain Duncan Smith is keen to simplify the benefits system and to ensure that working people don’t feel cheated by others receiving more whilst “doing nothing”.

But this overhaul of welfare benefits is raising a lot of concerns.  Ironically, considering it aims to simplify benefits, it seems to be quite complicated.  There is a real danger that many of those in need of benefits will be bamboozled by the whole set up.  People are individuals with their own particular circumstances and needs, and our lives can’t be put into neat boxes.  Simple solutions aren’t always possible, however desirable.

agency sign

There is a real worry too that the reforms are disguising cuts in benefits that will add to the burden of those most in need.  Yes, times are hard, but that doesn’t excuse tightening the screw on the most vulnerable, especially at a time when jobs are hard to get.  We should ensure that people are not penalised financially if the only jobs open to them are part-time and poorly paid.  The benefits system should leave them better off, and there is a real problem with housing benefit in particular in this regard.  Some of those who get into greatest difficulty are those who are in and out of part-time, temporary jobs.  They seem to finish up being worse off despite their attempts to work.  That can’t be right.

Reform

The welfare reforms do include changes to people’s eligibility to particular benefits.  Whilst universal credit doesn’t affect such things as disability living allowance (there’s an area for another day!) it does change the rules about eligibility and expectation.  This will impact on people with health conditions that affect their capacity to work and parents who are caring for children, with different criteria depending on their children’s ages.

Bedroom tax

There are real concerns too about what is being called the bedroom tax.  This involves reducing the benefits people receive if their home is considered to have more rooms than they need.  So if a child leaves home the tenants may have to try and move too or else find extra rent themselves.  This could take people away from the community in which they are settled at a time when neighbours might be most valued.  It also makes it harder for family to visit.  Older people who need occasional help, perhaps overnight, may miss out on family support as a result.  Ironically this could lead to more expensive care packages for some claimants.  Parents with shared access to children could also suffer under this ruling.  A one bedroom flat might be big enough for one person but too small when their son and daughter come at the weekend.

It’s easy to see why Frank Field, a specialist on welfare, described this part of the legislation as a “nasty, mean little measure.”  David Orr of the National Housing Federation commented, “… our voices, and those of tenants, have been ignored. This unfair bedroom tax will penalise some ofBritain’s most vulnerable families for under-occupying their homes when they have nowhere to move to.”

On top of all this there are the problems that will come from capping the benefits some people receive.  For families living in more expensive areas, especiallyLondon, the reforms could be very damaging.  This could have the effect of driving poorer people out of certain areas.  Film director Ken Loach recently described this as “social cleansing”.  He remarked, “Whole areas of London are being cleared out of people that they [the government] feel might disfigure it.”

Budgeting

The reforms will also place increased responsibility on claimants to manage their budgets.  It will be up to them to ensure that they use that part of their benefits intended for housing to pay their rent.  Many do not want this and will find it challenging.  It is likely to lead to growing arrears on their rent accounts.  Housing providers like Derwent Living will have a lot of work to do to help their customers understand the changes and in many cases support them in dealing with them.

Whatever the aims of its welfare reforms, the government is raising huge concerns for both tenants and housing providers.  The introduction of the Universal Credit does not appear to be simple and, more worrying, may not be just.  There could be a real social and financial cost for those least able to bear it.

2 responses to “Welfare reform”

  1. Josephine Gadsby says:

    It will soon be time for the peasants to start revolting this government don’t care about us, we are just Social housing rubbish. Some of us have worked all our lives and yet through no fault of our own now need help. I live in a two bedroomed flat and at nearly 60 don’t really see why I should move because some silly MP says I should, so I will have to cut down on food and heating to pay any extra rent when the time comes. As always the rich get richer and the poor get poorer. I also need the extra room because my children and grandchildren come to stay with me.

  2. Claire Barwood says:

    Excellent article Derwent.

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