The benefits system is unfit for purpose

Jenni Russell explains how the welfare system discourages people from taking temporary or variable-hours jobs:

The government and the welfare system tend to talk and act as if finding work is the end of the problem, and as if happy jobseekers will have nothing left to think about except the gold watch they’ll receive when they retire. But many jobs on offer, particularly those advertised in jobcentres, are precarious, temporary or part-time, or have uncertain hours.

[The benefits system] falls apart when it has to respond to fluctuating incomes or rapid changes in people’s circumstances. The majority of benefit claimants are now going into unstable jobs. They may be commission-based, or agency work, or zero-hours contracts. That means the income and hours worked can vary wildly from week to week. Someone on zero hours, perhaps with a shop or a cleaning firm, may have to be available for work at any time over a 40-hour working week. But there’s no corresponding requirement on the employer actually to give them anything to do. So a worker may do a three-hour stint one week, 17 hours the next, 32 in the third week, and four hours at the end of the month.

Trying to deal with that sends benefit offices into meltdown. People earning a low wage can still be entitled to all kinds of financial help. But if their incomes fluctuate from week to week, so will their entitlement, and the system can’t keep up. Weekly changes must be reported, and it can take weeks for each claim to be processed. Meanwhile, panicking claimants may find that their housing benefit has been cut or suspended, or their jobseeker’s allowance withdrawn, on the assumption that what they earned three weeks ago is what they’re earning now.

The system is just as bad at responding to people who leave benefit for what turns out to be a short-term job.

The solution for all this is of course to replace the complex benefits system with a citizens’ income.

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2 Responses to The benefits system is unfit for purpose

  1. burkesworks says:

    On paper, a citizens’ income is a splendid idea. The problem comes in the real world when it’s time to set the bar as to how high or low it should be, and real practical difficulties come on board when calculating how much of that CI will be earmarked for rent, assuming CI would replace *all* benefits including Housing Benefit/Local Housing Allowance. Also, regarding HB/LHA, there are local factors to take into account; rents in London are far higher than those in, say, Belfast. How would it be implemented so that claimants are not priced out of certain areas?

    • cabalamat says:

      The problem comes in the real world when it’s time to set the bar as to how high or low it should be

      I think it should be set roughly at the same level of redistributiveness as the present system.

      real practical difficulties come on board when calculating how much of that CI will be earmarked for rent

      None of it would be eaqrmarked for anything, people would just be given a lump of money they could spend as they wished.

      assuming CI would replace *all* benefits including Housing Benefit/Local Housing Allowance.

      That’s my assumption, yes.

      Why is housing expensive? Not because houses are expensive to build and maintain, but because of artificially restricted supply. End that, and houses, like any other manufactured good, is cheap.

      Also, regarding HB/LHA, there are local factors to take into account; rents in London are far higher than those in, say, Belfast. How would it be implemented so that claimants are not priced out of certain areas?

      Where one lives is a lifestyle choice. If Alice likes eating caviar but Bob likes eating baked beans, Alice doesn’t get more benefits because she chooses a more expensive lifestyle. It should be the same with housing.

      Having said that, I do think that with the right reforms, housing in London would be cheaper, just like it would everywhere else.

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