Increasing someone's pay because of benefit cuts

[buckingfrolicks]

My company employs a small number of people, all paid well above the living wage and in line with SE England national averages for the jobs.

One person has 4 children all at school and a spouse who doesn't work.

This person has asked for a pay rise because their family has had a significant (several hundreds) cut in benefits as per the Government changes.

This person has asked for a pay increase as a direct result.

Would it be unreasonable to say no? The employee is a good worker and not one we would want to lose. However, no one is irreplaceable!
If the job had, say, an increase of 6K a year (what the person is asking for), then we would be able to recruit someone on that salary with more experience, qualifications and skill, than the current post holder.

As an employer we are generally left of centre and in favour of supporting people, including our employers - we aim to be a good employer and keep good staff.

So WIBU to say no to a pay increase?

oh good grief :( I certainly did not intend to do a benefit bashing or goady thread, honestly! If you search my posts you'll probably see some that are pro-benefits staying as they are, that berate employers for not paying a living wage - as i said, I'm left of centre. This is NOT about benefit bashing or large family bashing.

I am genuinely interested in thinking through, with the help of other people's input, what some of the angles are about the impact of the benefits cuts, on the employer/employee relationship, and I used this specific, live example to try and do that. If it sounds like a judgey or goady post then I apologise absolutely.

It is a genuine conundrum to me.

A job is 'worth' 25K. Person X can do the job well for 25K. Our government says 'person x gets another 6K in benefits because of their personal circumstances'. Everyone's happy.
The government then stops the 6K in benefits.

This has direct consequences not only on person X but also on employer Y, who can either carry on paying 25K knowing Person x cannot survive on that; increase their pay by 6K to enable Person X to manage (with knock on consequences in terms of colleagues' pay and possibly the overall financial viability of the business); or accept that X will leave and need to be replaced by a new person willing to work for 25K.

I think what the benefits cuts will do longer term is push salaries up.

The government then stops the 6K

that's the thing - I wouldn't believe he lost 6k as the benefits cap doesn't apply. I would assume he is lying and just trying it on, so your whole starting point is skewed. sorry.