Conversation between citizens and James Purnell MP
No One Will be Written Off
Pathways to Work for Incapacity Benefit
Incapacity benefit to be axed
The Gov giveth and the Gov taketh away!
Views on Tackling poverty
Three million families living in jobless householdsBy Jon Swaine 27 Aug 2008
One in seven children in Britain - almost 1.8m - now live in totally work-free households, according to the Office for National Statistics (ONS), the majority with a single parent.
There has been barely any reduction in the number of households where all adults are out of full-time work in the past five years, the figures show.
Using the Labour Force Survey of employment, researchers found that 15.8 per cent of all households in Britain that contain at least one person of working age had no one in full-time employment. It means that there is complete unemployment in a total of 3.06m families in which someone should be able to work.
This represents an improvement of just 0.2 per cent since 2003. Due to the fact that there are now half a million more families living in Britain, there are actually 43,000 more working-age families who have no one in employment than there were five years ago.
The survey, which was carried out in the three months up to June, found that there 4.29m people of working age - 11.4 per cent of the entire workforce - were living in workless households.
The study, titled Work and Worklessness Among Households, also found that 40 per cent of all single-parent families have no one in employment, while the rate of worklessness among couple households was just five per cent. The employment rate for lone parents was found to be 56.3 per cent, compared to 71.7 per cent for married or cohabiting mothers.
The figures are likely to be used by the Conservatives as further justification for their plan to offer tax incentives to married couples. Last weekend George Osborne told The Daily Telegraph that encouraging marriage is essential to building a strong society.
It is thought that a Tory government might reinstate the Married Couples Tax Allowance, which allowed couples to pool their tax-free personal allowances before it was scrapped by Gordon Brown, then Chancellor, in 2000.
The ONS discovered that the rate of worklessness was highest among some black families, with 32.7 per cent of those defining their ethnicity as "other black" having no household employment.
The worklessness rate was lowest among the Indian ethnic group, in which just 10.6 per cent of families containing working-age members recorded having no one in employment.
Online Conversation between citizens and James Purnell MP
By Citizens and Work and Welfare Secretary James Purnell MP 26 August, 2008
The DWP Secretary answered various questions online from citizens focusing primarily on the Welfare Green paper and various issues related to it such as geetting the long term unemployed back to work, education opportunities and carers and many more.
James says: Hi, it’s James Purnell here, and we’re about to start. Thanks for logging on and I’m looking forward to hearing what you think about our proposals for welfare reform.
Richard Price: James, do you see greater roles for health professionals such as doctors, nurses and pharmacists in helping those out of work for health-related reasons making a return to work?
James replies: Yes, that’s exactly what we’re trying to do - I’m glad you asked that. At the moment, we have a medical test called the Personal Capability Assessment, which we (and many in the medical profession) think is not identifying correctly the people who should be on Incapacity Benefit. So, we consulted a wide range of groups: organisations of and for disabled people, individuals, people in the medical profession. We’re introducing a new test, called the Work Capability Assessment, which focuses much more on what people can do, rather than waht they can’t. This will be adminstered, as now, by medical professionals on contract to the DWP.
But we also want to work with the medical profession to help people stay in work - much better for them, and for the taxpayer. So we are:
* piloting what we call a ‘Fit for Work’ service, which would work with companies to help people stay healthy
* piloting having Jobcentre Plus advisers in GP’s surgeries to help people get better by going back to work
* working to reform the medical certification system so that it reflects the recent evidence that work is generally good for people’s health….
Cain: Why do retired disabled people not recieve the same benifits as those that are not yet retired. I refer to car tax and insurance and indeed the supply of car? We are just as disabled as the younger person.
James replies: There have always been different benefits - Attendance Allowance for those who claim after retirement, and DLA for those who claim before. They reflect the different circumstances of people at different stages of their life. We also pay more money to the poorest disabled older people - by having premia in Pension Credit. And we’ve introduced targeted support for older people - such as the Winter Fuel Payment, free TV licences and free bus travel.
So we recognise the needs of older people, though we know that many are feeling the pinch at the moment. That’s why in the last Budget we increased the Winter Fuel Payment for this year, for example.
Ross Evans: How can we help people off incapacity and other benefits and back into work without persecuting those who have legitimate problems, many of whom are poorly educated thanks to generations of neglect?
James replies: We’re going to abolish Incapacity Benefit (IB) and replace it with a new benefit called the Employment and Support Allowance.
We will migrate everyone on IB on to this new benefit between 2010 and 2013. So, we want to reassess everyone currently on Incapacity Benefit. Those who are able to work will go on to Jobseeker’s Allowance or straight in to work.
Those with the greatest needs will go on to ESA and get a higher level of benefit, and will be able to volunteer for our Pathways to Work programme, which helps people improve and manage their health condition, and look for work.
Everyone else would go on to the standard ESA rate, and get personalised support to get back in to health and back in to work. This support will be based on the Pathways to Work programme, which we know has helped many people improve their health - over 64,000 have already found work through Pathways.
Anyone on IB who is reading this can volunteer for Pathways now by contacting their local Jobcentre Plus.
All this underlines our commitment not to write anyone off and help people who haven’t been given the right support.
Read more on our proposals in the Green Paper
Jonathan Hurley: when will the permitted earnings be increased.I started supported employment in 2003 and I could work 4and a half hours to earn my £20. due to the welcome increases in the minimum wage I can now only work 3 and a half hours, why wasn’t the minimum wage taken into account when setting the permitted earnings.
James replies: From October 2008, new claimants will be able to do 16 hours of permitted work at the minimum wage - £88.50 a week at the moment. So, for existing claimants, that will apply as you move on to the new ESA benefit between 2010 and 2013.
david: You recently visited Rochdale’s Lower Falinge estate. What contribution would you be expecting from within, rather than from without, that community and how will be government be supporting that?
James replies: I really enjoyed my visit - and was impressed by the efforts that local people were putting in to helping people on the estate get back in to work. Government can’t do this all by itself - we can create the right support and incentives, but only individuals can decide how they want to take up those opportunities. Community groups can help by making sure people who are out of work find out about the support on offer - such as training or our Pathways to Work programme. And many community groups also provide services themselves - such as the childcare and IT coaching you can get in Lower Falinge. Most people on IB are really keen to work, and local community groups can help people make that transition.
When I was leaving the estate, by coincidence (I think), there was a Jobcentre Plus bus on the estate, to help people find out about the support we provide. We need both - the state and local communities working together.
emma ayres: As a lone parent im keen to go back to work once my children are older. But there seems to be a push for me to take any low paid job. So what help will you be giving lone parents to enable them to enter employment which will give us long term work and a future prospects, not just low paid low esteem work? and provide childcare around un social hours?
James replies: We totally agree with you - we want to help lone parents get in to work but also get on at work. That’s why we have an In Work Credit - £40 a week (£60 in London). But we also want to help lone parents get training and get more money - so Jobcentre Plus advisers are now there to help you after you get in to work and to take up training opportunities. The Government helps with that too - our Train to Gain initiative will pay for many of the costs of that training.
You’re quite right to mention childcare - we’re increasing childcare, for example through schools offering childcare before and after school It’s worth asking what childcare is available in your area. It’s often more than people realise.
ann demaret: I would like to know why, in this climate of excessive prices for food, petrol,gas,electricity etc etc inflation etc why we are still have no increase in our rates of social security- how do you expect us to live if the average man in the street can’t?
James replies: I’m slightly confused by your question - social security rates do go up, in line with prices or earnings for Pension Credit.
But you’re right to say that prices are going up which is why we’ve tried to do more to help - higher Winter Fuel Payments and spending a billion pounds in the last Budget on helping families with children.
Albertina McNeill: I am concerned that efforts to get people with mental health problems off incapacity benefit and into work before they are ready will cause relapses in their conditions. What is the government doing to ensure that a) they are being assessed with their best longterm interests in mind and b) that they receive ongoing support once they drop out of the benefit safety net?
James replies: This is a very good point. The Pathways to Work programme seeks to help people with mental health problems manage their condition - and also learn how they could do that in work. So, we try to give people those skills. We’re also increasing the ‘talking therapy’ that is available, for people who would find that valuable.
But we also need to remove the stigma around mental health - and want to help change the culture of work so that we can help more people with mental health work.
Finally, we’ve changed the benefit rules so that if people come off IB and then go in to work, but find their condition deteriorates or re-occurs, then they can go back on to their old benefit at the previous rate.
I hope that’s helpful.
David Lidiard: Are all persons on incame surport to undergo medical test to see if they are able to work and what about the persons on longtearn IS.
James replies: People who are soley on Income Support won’t go through a medical test. That will apply to people on Incapacity Benefits - between 2010 and 2013, we will reassess everyone with our new medical test. Those with the greatest needs will be able to get a benefit rate which is higher, as a result.
Adam Skinner: Which of the welfare reform models in operation internationally would you regard as a role model for future provision in the UK? Are we seeking to move towards an American model where individual states have considerable autonomy in relation to welfare provision and support is offered for a limited period only to engender a strong work ethic across society or a more protective centralised Scandinavian model?
James replies: I think we need to learn the best from different countries. So, we’re not adopting some of the time-limiting proposals from America, where people can lose their benefits after 5 years, regardless of their condition at the time. We’re worried that would increase child poverty, as it seems to have done in some American states.
We do think that some aspects of their reforms worked - especially the emphasis on people doing full-time activity. in fact, that’s something we’ve also done here as part of the New Deal, and we think the evidence shows it helps people get back in to the work habit and back in to work.
But it’s worth remembering that the United States has a lower percentage of people in work than we have. So these reforms are particularly inspired by the few industrialised countries that do have higher employment rates - such as the Netherlands and Denmark. They have systems that are generous, but require people to work in return for that support. That’s what we’re trying to do here.
Carole Reilly: People are not wanting to go to work whilst the benefit system is providing more than they would earn. What are you going to do about this ?
James replies: Making clear that there’s no choice between working and claiming. If there’s a job there, people should take it. If not, they can have their benefit sanctioned.
But the great majority of people are better off for being in work - thanks in part to our tax credit system and the £40 a week extra we give to certain groups for the first year after they get back in to work.
oldpeculiar: In light of the WRGP, can the Minister give assurances that those in receipt of Carers Allowance will NOT be required to undertake WFAs and/or be referred to private sector or charity assessors? Given that Carers are to be encouraged, not forced, into looking for work does he think that in time a “Carers Discrimination Bill” will be put before Parliament to make it illegal for all employers to refuse to employ someone on the grounds that they have Caring responsibilities?
James replies: In light of the WRGP, can the Minister give assurances that those in receipt of Carers Allowance will NOT be required to undertake WFAs and/or be referred to private sector or charity assessors? YES
Not sure about whether there will be a Bill along those lines - in fact, I’d imagine that would be illegal already, but there again I’m not a lawyer.
DAVID BROWN: hi james, having been assessed and now exempted from incapacity benefit pca due to high rate care dla and having my own doctor saying i will never be able to work again are you now changing the rules for the severly disabled?
James replies: We want to give the severely disabled higher benefits and more support. So, those who are reassessed and have the greatest needs will get a higher benefit rate - by between £5 and around £16 a week. And they will be able to volunteer for Pathways to Work, but not required to do so. I hope that helps.
Jon Doyle: If your going to force people to work for dole shouldn’t they be paid minimum wage? otherwise isn’t it effectively slave or forced labour?
James replies: I don’t agree - this is about saying that if people are claiming benefits, then full-time activity is a good way of helping them get back in to work. It’s once they are working, that they would then be able to benefit from the minimum wage we introduced. We don’t want to reduce that incentive to work.
vicki finch: i am a wheelchair bound disabled person who gets carers allowance and DLA. how will the new incapacity benefit reforms effect me as i have been told i dont qualify for incapacity benefit as i havent earnt enough national insurance?
James replies: Without knowing your exact circumstances, it’s hard to answer. But it sounds like nothing much would change - we’re not changing DLA or the way carers are treated through this Green Paper.
louise: How are you going to deal with drug addicts. Simply docking their benefits will cause them to steal for their drugs therefore making the problem worse.
James replies: We want to pilot a new approach. We already know that lots of people on benefits take up treatment programmes but we want to help more to do so. Where we know that someone has a drug addiction problem - to crack cocaine or opiates - we will offer them treatment and require them to draw up a personal rehabilitation plan. They would be required to follow that plan, with the possbility of a sanction if they don’t. Drug addiction ruins families and scars conmmunities - and it’s surely better for taxpayers’ money to go into treatment rather than drug dealers’ pockets?
mick: when are you going to tackle the abuse of the disability allowance dla. i.e people getting cars for nothing wrong with them. I see them every week getting out of there car then walk about town market
James replies: It’s worth saying that DLA is overall a very good benefit - it helps around 2.9 million people, and it’s really important that it pays disabled people whether they are working or not. That is society’s recognition that it has a duty to help with the extra costs of disability.
But anybody who defrauds the system is taking money away that could be spent on people who are genuinely disabled, and we want to reduce that fraud. We’ve cut fraud to the lowest level ever recorded.
James Alexander: Hi James, I think one of the key mechanisms for getting people back into work, especially in times of economic slowdowns is to invest in education.
What role do you see colleges and other education providers playing as part of this package of reforms to encourage people to develop new skills for employment?
James replies: That’s absolutely right - and I’m working with John Denham, the Secretary of State who is in charge of skills provision, to use both our budgets more effectively to help people get skills, get in to work and get on at work. We recently published a strategy called Work Skills to do exactly that, and you may be interested in looking at it.
ray edmiston: With your reply to Jon Doyle, you are effectively creating a stigmatised system, which you are supposedly against, how can you square this with the law of the land, concerning NMW and EU regs, given that, work is work, or is that until you deem it to be not work but ‘full time activity’?
James replies: Thanks for replying - it’s not about stigmatising anyone. It’s about helping them get back in to work. It doesn’t help anyone to say that they can claim benefits indefinitely and get further and further away from the labour market. That works well for example when people are on the New Deal - it’s the same principle here.
Louisa Peacock: What will employers get out of hiring the long-term unemployed - what’s in it for them?
James replies: The answer’s simple - good employees. That’s why over 3,000 employers have signed up to our Local Employment Partnerships - where they agree to look to give jobs to people from disadvantaged groups, and in return we offer help such as pre-employment training or work placements, so people can prove themselves and try out the job in question.
Rosemary: There are many carers who for one reason or another do not claim Carers Allowance but still care full time.Can Mr Purnell confirm that in these circumstances the said carers will be exempt from the new rules.
James replies: People on Carers’ Allowance will not be required to work, as now.
Paul Booker: I would first like to say this sounds excellent, I really feel for the first time in 10 years that you are listening to us. Will there be a softly softly approach to those that don’t turn up to duty or will you cut benefits??
James replies: We’re very clear - if people abuse the system, they will be sanctioned, up to losing their benefits for 6 months. The longer people are on benefits the more we will expect of them. But that’s also because we know that our support works - whether our help for the unemployed or disabled people, it gets more people in to work, meaning more money for them and less expense for the taxpayer.
nigel pivaro: Hello James,The Green Paper states 73 per cent of claimants who have received sanctions do not repeat their behaviour. What will you do about the 27 per cent that do not learn and continue to fail to meet their basic obligations.
How will community work be tailored so participant claimants avoid being confused with criminals carrying out their communty service order sentences?
James replies: Hi Nigel, hope you’re well.
Of the other 27 per cent, the large majority only ever get sanctioned twice. And 40 per cent of those who do get sanctioned tell us they think it was fair. The goal is not to sanction people - it’s to get them to take up the support that we know helps them back in to work.
On your point re community work - the whole idea is to get people back in to work. Our providers will be paid by the results they achieve in getting people back in to work, so their incentive will be to look at activity which gets people closer to the labour market. We don’t want to stigmatise anyone.
Jayne Simms: The emphasis of your recent proposals is clearly on the worthwhile aim of getting the long term unemployed into work. However, there doesn’t seem to be a great deal of policies that will directly impact on child poverty; can you confirm whether eradication of child poverty is still a priority for the government and what proposals are being considered to tackle it.
James replies: Yes! And the Green Paper announced that we would now allow parents on benefits to keep all of the maintenance payments they get from their ex-partner. Together with the rest of our welfare reforms, we expect that will help up to 200,000 children out of poverty.
And you may know that we announced a billion pounds extra spending in the Budget - together with previous measures, that should take about 500,000 children out of poverty.
Virginia Wakely: One of the worst things for lone parents is finding local affordable housing - this goes a long way by itself in boosting morale and self-esteem and also becomes a major factor in encouraging people back to work where their children can attend a local school. Will housing be taken into account during this welfare reform?
James replies: Yes, we’re working with the Department for Communities and Local Government on how housing and employment policies can dovetail to achieve exactly that. We’re planning to bring proposals forward later this year. This is a very important area.
samuel: i am currently claiming DLA and income support, and intending to start college in september. If i am in education, how will the new system affect me.
James replies: It’s hard to answer without knowing your exact circumstances. Your DLA won’t be affected - and we’ve made it easier for people to train and retain their benefits. Maybe ask your Jobcentre Plus adviser? There may also be a range of student support available.
James says: Right, I’m off now. It’s been really interesting getting your views - if you want to reply to our consultation, then you have until 22nd October to do so.
Email email@example.com or visit http://www.dwp.gov.uk/noonewrittenofftop
Secretary of State for Work and Pensions James Purnell wants to abolish Incapacity Benefits and Income Support as part of far-reaching new proposals.
In a radical overhaul of the welfare state, Mr Purnell announced proposals to scrap incapacity benefits by 2013 and abolish Income Support to create a more streamlined system based on just two working-age benefits - the Employment and Support Allowance (ESA), for those who have a medical condition which prevents them from working, and Jobseekers' Allowance (JSA) for everyone who is able to work.
Unveiling the new reforms in a green paper published today called No one written off: reforming welfare to reward responsibility, Mr Purnell said:
"Our proposals are based on a simple deal: more support in return for greater responsibility.
"This green paper proposes a simpler benefit system that rewards responsibility, gives people the incentive to do the right thing and ends the injustice of people being written off on benefits for life without any hope of getting the support they need to get back to work.
"We will help people find work, but they will be expected to take a job."
Under the plans, people on incapacity benefits will be moved on to ESA by 2013. This will provide temporary support for all but the most severely disabled people.
Everyone currently on Incapacity Benefit and new claimants will go through a new enhanced medical assessment and be assessed on what they can do, not on what they can't. Doctors will be asked to make clear the point at which the individual should be fit for work and people will be assessed again at that point.
People with severe disabilities will get more cash under ESA. The rest who qualify for the benefit will be placed in a "work" category. They will receive personalised back-to-work support to help them prepare for work and overcome any barriers they face. It will be made clear to this group that ESA is a temporary situation to help them get fit to return to work.
The green paper also sets out proposals to move towards a streamlined benefit system, moving lone parents with children under seven on to JSA. While lone parents with children under seven would not be required to actively seek work, the green paper proposes voluntary measures to give them more support to prepare them for work and includes a 'skills for work' premium on top of existing benefits to act as a weekly financial incentive.
The conditions attached to receiving JSA will also be strengthened with a "work for benefits" scheme for the long-term unemployed. People unemployed for over two years and those abusing the system could be forced to take part in full-time activity such as community work at any point in their claim. People will have to train to get their job skills and drug users would be required to seek treatment or could lose their benefits.
In return for these greater expectations for people on benefits to find work, Mr Purnell also announced measures offering greater support. These include:
* Doubling the funding of Access to Work which provides assistance to disabled workers and their employers, which already helps 24,000 people a year gain employment or stay in their job. There will also be significant increases for the schemes which provide support into employment for the most severely disabled people. People on incapacity benefits who find work through the Pathways to Work programme could get a £40-a-week top-up on their wages to ease the transition into work
A "full disregard" for child maintenance, so that payments will not be taken into account when calculating how much out-of-work benefits a parent should get. The full disregard, combined with existing reforms to the child maintenance system, and measures to support lone parents with older children into work, will lift up to 200,000 children out of poverty.
Exploring more ways we can give disabled adults greater control over the combined budget which the government spends on their support.
The publication of the green paper will be followed by three months of public consultation on its proposals. Mr Purnell urged everyone - whether large private firms or individual benefit claimants - to make their views heard and play an active role in shaping the policies.
Pathways to Work is an innovative new approach to help people with health conditions and disabilities to consider their options for returning to work.
Who is eligible?
Anyone who is not in work because of an illness or disability can volunteer to participate for Pathways to Work.
Any new recipients of:
• Incapacity Benefit
• Income Support (because of incapacity)
• Severe Disablement Allowance
• Also those appealing against a decision which embodies a determination on incapacity for work.
The new Employment and Support Allowance (from end October 2008 will be required to participate in Pathways to Work in return for receiving these benefits.
If you make a fresh (or repeat) claim for an incapacity benefit (or Employment and Support Allowance from October 2008) you will automatically be referred to a Pathways Adviser in your local Jobs and Benefits office or JobCentre.
What support will I get?
You will be allocated your own specially trained Pathways Personal Adviser who will arrange a series of meetings with you.
At these meetings your Pathways Personal Adviser will:-
discuss with you the difficulties you are encountering which make it difficult to work; and
help you consider a range of choices which may provide the practical, health and financial supports you might need to make decisions about work .
For further information please contact your local office and enquire about Pathways to Work
Your Pathways Personal Adviser will help you consider the range of choices below:-
Help to better understand and manage your health condition or disability through the Condition Management Programme which we run along with the Health Service.
Supported work experience through our Work Preparation Programme which helps you to build up your confidence and gain work skills while having one to one support on a work placement.
Learn more about what work you might be able to do and what you can earn without losing benefit under the Permitted Work scheme.
Help to find a suitable job if and when you feel ready for work through the New Deal provision.
Extra financial support while you work. The Return to Work Credit (RTWC) is a tax free payment of £40 per week for up to 52 weeks if you work for at least 16 hours a week and earn up to £15,000 per year.
The Pathways Personal Advisers can also access a discretionary fund to help support a return to work activity.
Your Pathways Personal Adviser can provide information on an extensive range of existing help and support such as the Travel to Interview scheme and Job Grant.
Throughout your participation in Pathways to Work your Pathways Personal Adviser will help you select the help and support suitable for your needs and your circumstances. They will help you to try out work and make it pay. If it doesn’t work out they’ll make sure it doesn’t affect your benefits so you’ve nothing to lose!
Two of the benefit payments that underpin Britain's welfare state are to be abolished as part of a streamlined system that will remove the option of “a life on benefits”, the Government said yesterday.
People who are out of work for more than two years, and those caught abusing the system, will be forced to work. Incapacity benefit and income support will disappear.
Other moves to tighten the system include people having to work for six months, rather than four weeks, before they can claim benefits, and those unemployed for more than two years having to take part in a full-time activity such as community work.
The unemployed will be required to take advice and learn new skills to carry on claiming, and drug users will have to seek treatment or face losing their benefits under the plans announced by James Purnell, the Work and Pensions Secretary.
The extension of the qualifying period from four weeks to six months for those claiming benefits is aimed at those coming into Britain from the EU and Eastern Europe, it emerged.
Immigrants will be told that they cannot claim incapacity benefit - which will soon become a new employment and support allowance - until they have worked for six months. Mr Purnell's Green Paper on welfare reform said: “This reform will help to ensure that access to the UK benefits system for workers from other countries, including nationals from other European Economic Area states, is limited to those who have a connection with, and have made a contribution to, the UK.” Ministers want to address Britain's reputation as a soft touch for claimants.
The package has provoked a negative response from some Labour MPs, but the Conservatives - who claim that Mr Purnell was taking many of their ideas - promised to support it.
Mr Purnell said he wanted to end the idea there was a choice between claiming and working. “Instead, the longer people claim, the more we will expect in return,” he said.
Under the proposals, claimants will be required to intensify their search for a job and comply with a back-to-work action plan. After a year, an outside provider, possibly from the private or voluntary sector, will take over and be paid by results. Claimants will be required to work for their benefits for at least four weeks, or longer if the provider requires it.
Incapacity benefits will be scrapped by 2013 and income support will also be dropped to make way for a system based on two working-age benefits - the employment and support allowance (ESA), for those who have a medical condition that prevents them from working, and jobseeker's allowance (JSA) for those who are able to work.
Mr Purnell said the paper proposed a simpler system that rewarded responsibility, encouraged people to do the right thing and stopped people being written-off on benefits for life without any hope of getting the support they needed to get back to work. “We will help people find work, but they will be expected to take a job,” he added.
Everyone currently on incapacity benefit, and new claimants, will undergo a more rigorous medical assess- ment than at present. Doctors will be asked to make clear when the individual should be fit for work and people will be reassessed at that point.
People with severe disabilities will get more cash under ESA. Others, who may qualify initially for benefits but whose condition may improve, will be placed in a “work” category. They will then receive personalised back-to-work support. It will be made clear to this group that the ESA is a temporary benefit intended to help them return to work.
Ministers also announced that child maintenance payments will not be taken into account when calculating how much out-of-work benefits a parent should get.
I found that there is new help from Student Finance Direct for those on benefits, but in some cases it is confusing. The “Maintenance Grant” is not what it seems. On one hand it helps some and on the other the Government takes it back. One of their books say that it will come off your benefit and can count as income for certain benefits like Housing & Council Tax Benefit. This grant was recently introduced, but is it a case of the Government playing Sheriff of Nottingham again?
I am pleased that there is such a grant to help the under-privileged in Hulme. I am disgusted that it will effect certain income based benefits. Why? Surely this Government could give better help for train fares, computers, software, clothes, books, materials, sustenance, etc. towards university expenses? The booklet by SFD says that it will work out to be a touch more than they get on benefit.
Student finance which Jobcentre Plus and your local authority’s Housing Benefit section counts as part of your income:
Adult Dependant’s Grant
“In most cases, student finance replaces benefits..”
“Many students who are eligible for income-related benefits will find their income from student finance is higher than the amount of benefit they would normally receive. This may result in the student receiving reduced benefits or none at all.”
It’s like throwing 2p in a beggars cup outside McDonalds and saying, “Now buy yourself a Happy Meal and a hot drink!”
What do I mean?
“.. the fixed amounts not counted as income were (in 2007/8) £370 towards the cost of book and equipment and £290 for travel costs.”
‘Well, at least it’s something.’ you may say. Let’s add up the real cost of going to a university outside Manchester.
In any university life there is the “dissertation”, which requires a laptop so the student can work from home. There are university libraries, but I cannot use a Liverpool University library card at Manchester Metropolitan University library. To use my own university library I have to go back to my university. Which means more costs in travelling and more money. A decent laptop can cost around £600, then you need software as well.
Next is £290 for travel. At university for 2 days a week at a cost of £9.50 per day plus bus fare to and from the station that is £23 p/w at present costs using Arriva Buses & North Western Trains. For 10 weeks at university, plus any extra days that the course demands then that £290 is swallowed up quickly.
Oh, by the way. They give you an extra £10 per week not to be taken into account. Any Maintenance Loan will not be taken into account. There are grants and there are loans.
I have met overseas students who have told me how their country or company is supporting them by paying for their flights, accommodation, maintenance support and paying their course fees in full to have university education here in the UK. Getting our education, when this Government is not investing in it’s own people. This shows that other countries are more interested the future of their people and their country’s economical growth more than the UK’s Government. Britain, shamed to say, wants to keep the poor poorer and put them into deep debt. Is this “Britishness”?
I am confused to know if Incap is income based and wondering if I would be penalised by wanting to improve my chances of work in 2012. A year after the proposed opening of MediaCity UK at Salford in 2011.
One person I know on Incapacity Benefit tried getting on a City & Guilds course at WFA Media on Lucy St. She went to inquire and found that she would be CHARGED for the course, where others are getting it for free being on certain benefits. Plus, if she was from an ethnic group it would be free also.
The “Maintenance Grant” should be given unconditionally to all on benefits who want to improve their prospect of a career by seeking higher education and should not be classed as extra income.
I hope that the “Maintenance Grant” won’t effect the money I already get, so that it will give me a better chance of getting a degree. I can focus on the course concentration and not have my head full of money worries like: “How can afford to remain on the course? I’ve been doing so well and my tutors are very pleased with my progress. Now the money has run out and I’ve got a few months left”. If that does happen to the unfortunate students it is not the end of the course, they can apply to their university’s “Access to Learning Fund” which can give them the extra help they need. I know it feels like begging, but it is there to help and not to put the student down. In this day when people want to be more independent and feel awkward in asking for any support, it is to make sure that you can continue to study or until you find your feet.
The ‘Student Loan’ is bad enough. The grant looks great if it really is extra support that people need. The way forward is higher education, training and working with disability advisers to be able to offer something to employers willing to take us on in this fast technological age.
Thankfully, there are bursaries from the universities themselves at £310 per year and maybe scholarships. It’s a maze you have to go round and this takes up valuable time, especially when students should be studying.
I hope this blog will help those who may have considered higher education, but was put off by serious debt worries and hardship through university life.
What if all this money replaced benefits and all the student was left with was a little extra than normal? Then would this come under the rules of the grant and not the DWP? Technically, as I understand it, you basically sign off to go to university. This could mean that you can now take a p/t student job, low payed as they are, and have some extra money for term-time. Not a lot, but something to spend on new clothes or music or dancing at the Students Union. Then in Summer you can sign back on, it is allowed. Seeing that they won’t force you to look for work, it will take you through to September again.
In 3 or 4 years time what would you be doing? Sat around the house bored or receiving your degree with a better chance of gaining employment? Go for it!
At one time the Government would throw money to people to help them come off benefits. Now we are treated with contempt.
Old jokes often contain interesting messages. Take the joke about a couple who are lost in their car in the middle of nowhere and stop a passing local to ask directions to London, "London, you say? Well, if I wanted to drive to London I wouldn't start from here." The message behind this tale is that you should think carefully about what you do in case it makes your eventual goal more difficult to achieve. This is important when we ask how poverty can be tackled. With prices of food and fuel going up at an alarming rate we will hear a lot about poverty in the months ahead because it is those on limited income who are hit most by increased prices for essentials.
Yesterday I tried to explain why I believe "poverty" is a word best confined to describe the state of those with an income below subsistence level, I also explained (by use of very rough-and-ready figures) that I estimate something like £10,000 a year to be subsistence income for a childless couple and £6,000 a year for a single person, perhaps more in areas where housing is expensive and undoubtedly less in areas with cheap housing. Before asking what can be done about poverty we need to look at why some people have such low incomes. I am not interested in airy-fairy theories, I want to look at real life in the real world.
There will always be those without the skills to earn anything more than a low income and there will always be those who, through indolence or lifestyle choice or bad luck, find themselves with very little money. "Let them eat cake" is a fair approach to take towards those who will not help themselves but I do not believe most of the people in poverty in this country to be in that camp. I believe that the vast majority wish to work in order to support themselves and their families, they do not want to be dependent on the State. Some, of course, have no choice because they suffer from a physical or mental condition which precludes them from earning a living even though they are of normal working age. These people are in a special category which I will return to another time. Others cannot work because of their age, the position of those outside normal working age is also outside the scope of today's thoughts. Today I want to look at the lot of those who are in work but earning very little.
First it is sensible to make clear that for the vast majority in this position their only poverty is financial. A common error on the political left is the belief that those who earn low wages feel resentful towards those who earn more and are unhappy with their lot simply because they do not have much money. That is complete nonsense. Ask the average road sweeper whether he thinks an accountant should earn more than him and his answer will be "yes" because he knows that the accountant could sweep the road but he could not be an accountant. Ask him whether he feels unhappy that he is not an accountant and his answer will be "maybe it would be nice, but I do what I can, I work hard and I support my family ... here's a picture of my little girl at sports day, she won the egg-and-spoon race, she's a lovely girl". Of course he will also say he would like to earn more, but what is most important to him is that he is able to support his family through honest work. Many on the left think his income, social background and employment define him but he knows better, he knows that his values define him.
The road sweeper is employed providing a service and there is a limit to what can sensibly be afforded to pay for that service. So it is also with those in the private sector performing mundane manual tasks. The work requires little skill and adds little value, pay too much for people to do it and you price your goods out of the market. That is why automation in factories has advanced so much over the last thirty years and more. Those without skills who would formerly have been cutting shapes out of sheet metal on a foot-operated press have been replaced by computer guided machines and have had to seek employment elsewhere. Their lack of skills limits the type of work for which they can be hired and necessarily means that anything they do will be low-paid. In turn this means that their poverty is a direct consequence of an inescapable fact of life, that we can only ever be paid what our work is worth.
Government has a part to play in assisting those whose income is below the poverty line and in preventing those above the line from slipping below it when costs of living rise. Government can have both an active and a passive role. The active role involves paying money to those in poverty, the passive role involves not taking money from them. In relation to the unemployed who are seeking work the active role is potentially important but for those in work the passive role is far mightier. To illustrate what I mean I want to look at the threshold for income tax.
For the tax year 2008-2009 the income tax threshold is a touch over £6,000, less than £120 a week. Yesterday I explained how I estimate that figure to be subsistence income for a single person living alone and renting a small room. It is an income level at which saving for the future is impossible, even the need to replace a broken kettle would cause hardship, and yet additional earnings trigger a requirement to pay 20% of the extra money in tax. This is simply obscene. What makes it absurd as well as obscene is that we now have a statutory minimum wage which is meant to represent the fair minimum amount someone should be paid if they are working. It was said to be a recognition of the minimum earnings required to be able to live to modest but acceptable standard and is not, therefore, a definition of a subsistence income. The current minimum wage for someone aged 22 or over is £5.52 per hour, £220.80 for a 40-hour working week, £11,481.60 per year.
So the government tells us that £11,481.60 is the very least anyone should be paid for a full working year, yet on that sum almost £1,100 will be payable in income tax. This might not involve any chicanery because by saying £11,481.60 is the minimum to be paid the government knows it amounts to just over £10,000 after deductions. The absurdity, however, is in setting the tax threshold below the figure the government considers necessary to live a tolerable existence. Reverting to what I said yesterday, it is important to bear in mind what subsistence level income means - it means being able to afford housing, heating, water, food and clothes and having a tiny amount for discretionary spending. To impose tax at 20p in every pound above such a low level of earnings is nonsensical.
The first thing government should do to tackle poverty among the employed is to raise the tax threshold to a much more realistic level. The net income resulting from the statutory minimum wage would be a good start because it would put the threshold at a nice round figure of £10,000. We could make it £10,400 so that it is exactly £200 a week. That is hardly a fortune. Such a change would acknowledge that people in this country should not be dependent on the government to keep them out of poverty if they are able to do so by their own efforts. It would also acknowledge that it is beneficial for those in work to have use of as much of their own money as possible because they can, if they choose, save it, but the government cannot save it for them. You want to be fair to those in employment? You don't start from here, you don't start with a tax threshold so low. If it were not for years of allowing the threshold to lag the problem would not have arisen.
So, that is my first suggestion. It is not a new idea but it is fair. It will also reflect the values of those in low paid employment who take great pride in being able to pay their way. One problem with charging income tax at the margins of subsistence earnings is that it tilts the balance of power towards the government. "We will allow you a bare subsistence income but after that you must pay us one fifth because we have plans" is the current position. I want the narrative to go from the taxpayer to the government, not vice versa; I want to hear "I now earn enough to support myself in a modest lifestyle, I will now allow you to have one fifth but don't waste it." My further musings on poverty will be made against that background.
My first suggestion for tackling poverty was to increase the income tax threshold to such a level that no one has to pay until they are not just above the poverty level but substantially above the poverty level. The minimum wage means that all those in full-time employment are necessarily above that level and those who work part-time only need to work about 21 hours a week to be avoid poverty. Today I want to look at the position of the unemployed. What can government do to ensure they are not in poverty? Again I use the definition of financial poverty I gave a few days ago - being unable to pay for housing, heating, water, food and clothes.
There are, of course, some people who are unemployed but not in any financial difficulty because they have savings, but for most this is not the case. Government's role, in my opinion, is two-fold. First a subsistence level of benefits should be paid to ensure they do not starve. Benefit activists moan constantly about the amount paid being too low to allow people to live but I have seen no evidence of anyone starving to death because they have not been paid enough to buy food. They might not be able to buy flat screen televisions, computers, Axminster carpets, foreign holidays and cars but it is not the job of government to take tax from people who struggle to buy such luxuries from their wages in order to allow those not working to receive them.
Government's second role is to interfere in the world of business as little as possible. Whether business can employ everyone in the country is a moot point, what is plain fact is that increasing the administrative costs of the productive sector reduces the number of people that sector employs. Whether it be a requirement to undertake equality audits, an obligation to pay for lengthy maternity and paternity leave, the need to comply with petty health and safety regulations or any of the other hundreds of things business has to do to dance to government's political tune, it all costs money. Increases in the costs of any business must result in (i) reduced profits, (ii) other costs being reduced or (iii) increased prices. They cannot have any other effect because money does not grow on trees and businesses cannot magically create money to pay for overheads imposed by government. In all but the most exceptional circumstances, reduced profits result in a business being less attractive to investors thereby putting at risk expansion and, in many cases, making refinancing of existing debts more expensive. Similarly, increasing prices is something a business will seek to avoid because of the obvious risk to sales. That leaves cutting other costs as the first port of call and shedding non-essential staff is often the only sensible choice to make.
Those who suffer most when businesses have to cut staff to pay for bureaucratic overheads are those whose work can most easily be done by others or dispensed with altogether. That tends to be those of fewest skills, the very people who find it most difficult to find work and who, therefore, are most likely to have no cushion of savings to prevent them falling into poverty. It is no answer for government to say they will pay subsistence benefits, there is no benefit in benefits, those people want to work for a living and would be able to if it were not for government piling unnecessary costs onto business.
Regulation makes it more difficult for the unemployed to find work. My second suggestion for tackling poverty is, therefore, for government interference in business through regulation to be reduced to only that which is essential to protect against the greatest dangers. Most health and safety regulations are completely unnecessary because the risk they seek to eliminate is minimal and the cost of implementing them is vastly disproportionate. Equality and diversity targets serve no purpose at all - any employer who rejects the best candidates on the ground of race, sex, sexual proclivity or age ends up with an inferior workforce and should be left to stew in his own narrow-minded juice. In fact I am unable to think of any red tape which is of net benefit to business. It might result in some nice lists of statistics for government to manipulate as it chooses but it achieves nothing other than to increase costs and put at risk the jobs of the lowest paid.
It was not very long ago that vast numbers of wholly unskilled people were employed in small businesses even though they served little useful purpose, it happened because throughout the country there are small businesses based in villages and small towns and those businesses wanted to be seen to be part of the community. If there was a young person fresh out of school or an older person who had lost his job it was a common occurrence to find a broom and a brown overcoat being made available for them so they could be employed at a low wage to sweep the floors and empty the bins. All it took was a quiet word with a sensible owner who knew it was better to create a job and bear the modest additional cost rather than refuse, it kept the existing workforce happy because they wanted to see poor Johnny in work and it cemented relations with the village. Be in no doubt, that happens still, but not as much as it used to. Margins are trimmed by expensive red tape and the obligation to pay Johnny the statutory minimum wage makes him too expensive for many.
I have attempted to explain why I believe unnecessary regulation hits the unskilled in two ways, they are often the first to be laid-off to cut costs and many of those who would be hired voluntarily become too expensive. The real problem is that these effects do not stand alone, there are already plenty of unskilled people without jobs. Any step taken by government which increases their number makes it all the more difficult for a single one of them to find work and raise themselves above the poverty line by their own efforts.
Poverty is only a potential problem for those in employment, for those without work it is often a stark reality. I suggested yesterday that subsistence benefits should be paid to those who are unemployed but looking for work. My reasoning is that those who are prepared to take any job rather than exist on benefits should not be dissuaded by benefits being too generous. It is a tough stance but one which I believe to be justified because I have great faith in the inherent decency of people including that strand of decency which makes them want to work rather than, let's put it bluntly, scrounge.
One of the strongest justifications for having a national minimum wage is that it guarantees a living wage for those in full time work. I will not pretend that life on the minimum wage is a bed of roses for a couple with children who decide the best interests of their children requires one of them to stay at home, but a full working week will bring in a living wage provided the income tax threshold is increased to a sensible level. But what of those who do not want to work? To what extent is it appropriate to protect them financially from the otherwise inevitable consequences of their idleness? Merely asking the question would label me a fascist in the eyes of the left, but that is no more than a label and I am not interested in being unfair to anyone, my concern is that the system should do everything it can to bring the best out of people and encourage everyone to support themselves if they possibly can. Not only will that reduce the burden of tax on those who work willingly, it will also improve the lot of those who currently live on benefits a little above subsistence level but would do a lot better if they found a job.
I believe two changes to the current system to be necessary. First, permanent dependency on the State by reason of physical or mental incapacity to work should be limited to those who really are incapable of work. Over the last eleven years the government has made it easier to claim incapacity benefit, so much so that something in the region of 2,500,000 people currently claim a benefit which should be available only to those genuinely unable to work. Idleness and fecklessness are not incapacities, they are idleness and fecklessness. Fictitious bad backs are not incapacities, they are bogus excuses. No one knows how many of the 2,500,000 are really unable to work, but we all know that it is good for unemployment statistics if a vast number who are out of work are classified as unwell rather than unemployed. Yet governmental attempts to hide the true level of unemployment do not fool anyone, it is obvious (according to my personal version of common sense) that in a population of some 30 million people of working age it cannot be the case that 8% are incapable of holding down a job. The most dangerous consequence of trying to mask unemployment by calling it incapacity is that the government has an incentive to continue the pretense. For so long as they feel there is political mileage in reducing the headline unemployment rate by attaching a different label to a large number of unemployed people, they have no reason to change the system. In turn that locks the people on incapacity benefit into that state, they receive more than if they were "ordinarily" unemployed and the financial gap between being on benefits and being in work is reduced.
Secondly, those who are able to work should only be allowed to receive benefits of any kind for a limited time. Will this push them into starvation? No, it will push them into work. For quite some time this country has been able to absorb migrant workers for one reason and one reason only, that those who live in this country have been unwilling to do the jobs the migrants have taken. Not unable, unwilling. How many office cleaners, parking attendants, roadsweepers, kitchen porters, hotel chambermaids and dustmen are white and British? In all cases the answer is very few in proportion to their number in the country. That is not because the foreigners who fill those positions have stolen jobs, it is because those sitting on benefits have not applied for the work. This is a systemic problem caused, I believe, by the easy availability of benefits. I do not believe most of those on benefits would think it such a good life if they tasted work and the self-pride it brings, but there is an underclass who have never worked and have no comprehension at all of self-worth.
Recently we saw a fine example of the hopelessness benefit dependency brings. The by-election in Glasgow East highlighted an area in which generation after generation of families never work. They do not need to because they receive housing for free and enough to live on. They are told by those on the political left that they are victims who can never improve their lot because the system does not allow it. I disagree, they are not victims of a wicked capitalist economy, they are victims of those who have told them for decades they have no hope of improvement. By my definition they are not in monetary poverty but they are certainly a lot poorer than they would be if they took the jobs people travel thousands of miles to fill and they are in poverty of expectation.
It will not be an easy task to change the culture on the sink estates of Glasgow East and the other inner city constituencies and there is no painless way of changing that culture. Yet it must be changed if those people are to have a chance of living a life in which they can walk down the road with their heads held high, knowing that they are providing for themselves and their families. It is a harsh method, but imposing a strict time limit on their State benefits is, I suspect, the only way to get them out of their rut and give them an opportunity to live independent lives and enjoy the satisfaction that brings.
I cannot accept that those on the sink estates want to live on the poverty line forever, nor can I accept that they are unwilling to work under any circumstances. What I can accept is that they have been labelled victims for so long that it will take time to persuade them they can cope on their own. The jobs are there, Glasgow East is a short bus ride from vibrant hotels, pubs, restaurants and clubs who need staff, lots of staff. Thousands of jobs currently filled by transient employees from overseas could be filled just as well by locals if only they felt there was a reason to do them. It is time to be cruel to be kind. That would be real social justice.
Battling welfare benefits
Mental problems helping to keep 100000 young off sick for years
Who'll be first to offer disabled people a job?
Biting Back with Mrs Boris
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