Millionaire on benefits- rare of course- but is it time for means testing disability benefits

[Flippityflops]

Close friend is a millionaire .
Has not worked since age 40 .
He now has a disability and on his account s advice , he claims non means tested benefits he says .

if this is indeed true- given that such benefits cater for additional expenses of living with a disability, and he absolutely does not need it .. isnt it time that this benefit is means tested in these different times to prioritise the financialy vulnerable.

He for example told me - unsure if its true - that he bought a beautiful 3k painting wirh the money.
it’s gorgeous ive seen it and it dows add value to daily living .

its a bit like the taxpayer is giving him a huge freebie and we cant afford it and those in his income bracket.

Are we suggesting means testing it for kids too? My son gets DLA but he doesn’t have an income (as he’s 7). That money is for him, the paperwork makes it clear that that money is to be spent on him and his needs. It’s not family income. Are we means testing that too, and what would it be based on? Household income?

Means testing based on household income and non-cash assets would also leave disabled people open to financial abuse.

ie. disabled person with a low personal income, living with a partner or parent in an expensive house, partner/parent earns over the means test cut off... They'd be in a very vulnerable position!

So it'd have to be done on the claimants assets/income alone.

But that then means that the saving, even if the cut off point was quite low (and 60K is pretty low, does not necessarily mean someone is able to live a carefree 'money no object' lifestyle by any means!), will be minimal, but the paperwork astronomical.

This seems to be based on guesswork. Is 'not that much' still a net cost? Nobody seems to have done any working out. Bear in mind that if it's not the same income point as for CB, the same system can't be used. There won't be any of the savings you get with running systems that have the same qualifying criteria. There's also no reason to presume that people won't bother claiming disability benefits in the same way some don't bother with CB, because the populations are quite different.

CB would be a cliff edge if it were also tied to PIP/child DLA, particularly if we were to withdraw in full which seems to be what people are talking about. It could instead be a high effective marginal rate if tapered, and those are also bad.

Remember that this is people who'll already be paying 40%, so the incentive for them to simply work less will be there. Some of them will respond to it. So will some of the people who don't have children but still think loss of DLA plus 40% tax makes it not worth doing Friday afternoons.

You can make exactly the same argument about CB and yet we do means test it this way. Lots of benefits are done at a household level as this is most practical and fairest way. If the millionaire's wife was disabled then it would be reasonable to expect him to support her.

Nobody said the threshold had to sit at the 'money no object' level. It's more whether you can reasonably be expected to support yourself without additional government help. This should be everyone's default and we should all seek to do this unless it really isn't possible in which case we can use the 'safety net' provided by the state. The default shouldn't be that you claim unless you are absolutely loaded. We simply can't afford to do that.

As we're now discussing the practical questions, I think it would be useful for supporters to confirm whether they want it to be tapered like CB or withdrawn totally once you hit a certain income point, and also whether they envisage a cohabiting partner's income being considered too. There seem to be a variety of views.

edit- forgot to also say, what of parental income for kids, bio parents or the adults they live with, or do people just envisage leaving that as it is given that few kids on DLA will have their own income anyway?

The reality is that we won't know until we do it. So much of this depends on human behaviour. You think people will still claim if above threshold but there is evidence from CB that people don't necessarily do this. Means testing CB has undoubtedly been a net positive for the government.

You could taper disability benefit in exactly the same way you taper CB. CB fundamentally is not a cliff edge tax so you are wrong to suggest this.

The arguments about not means testing disability benefits in terms of productivity are exactly the same as the ones applied to CB. We have been means testing CB for over a decade now and there are no plans to stop this.

You won't know until you do it covers literally any new idea anyone ever has. It's not a reason to do something in itself.

Also, to clarify, I didn't say people won't avoid claiming as is the case with CB, I said the two populations are different (as you pointed out yourself) therefore you cannot presume the same will apply.

It's useful that you've clarified you mean tapering like CB rather than total withdrawal above a certain income like eg personal allowance. Both were possibilities. I agree, and said in the post you quote, that if tapered it would be a high effective marginal rate rather than a cliff edge. Presumably you know that those are also bad policy?

There is no way to means test without creating a high effective marginal tax. Means testing in itself isn't inherently bad policy. It has pros and cons like universal benefits do.

Of course not really knowing how a policy will plan out isn't a reason to do something but nor is it a reason not to do something either. This is especially true if current policy isn't working and is unaffordable and unsustainable. There are absolutely massive flaws in the current system that need to be addressed. It won't ever be perfect but we can reasonably estimate the impact of means testing disability benefits using the precedents we do have which include CB. Of course it involves different groups of people but as means testing this specific group hasn't happened before then it's some of the best evidence we have available.

Even some of the income related disability benefits are available to those who are of high wealth - people who get injury related compensation can have this ring fenced when it comes to claiming benefits.

The best evidence we have available and evidence of any value are two different things. Although I don't even know if the CB situation is the best evidence available on this point, since there are already disabled people who don't claim some of the existing disability provisions. But let's say for the sake of argument it is: that doesn't mean it tells us what a different population will do.

Means testing isn't inherently bad, but again that doesn't mean it's going to be good for the particular benefit you want to means test, at the level you want, using the method you want. Not least because of the way people respond to high marginal rates, and we already know this is a problem in the UK.

If people only want to make arguments from principle, that's fine, but anyone who thinks changing the status quo will save money needs to show us their working out if they want to be taken seriously.

I fundamentally disagree. Where is the working to show that it won't save money? Where is the irrefutable evidence to substantiate the calculations?

Your stance would mean we wouldn't be able to change almost any element of fiscal policy that has some interaction with human behaviour (which is nearly every single policy). Want to raise Vat then this will impact consumer behaviour. Raise Income Tax and this will lower the incentive to work. How much any policy is likely to impact human behaviour always relies on an element of guess work.

So no, means testing disability benefits is absolutely a serious proposition. Where you draw the threshold, whether you taper etc will impact the numbers but it is definitely an area that could deliver real savings. The obvious challenge is at what cost to the disabled and their quality of life not whether the policy in itself has the capacity to save money as it clearly does.

Sibling claims high rate DLA and PIP for two kids.

Sibling also pays seven figures in tax.

We have had a few debates about it!

Edit: It's more EHCP and blue badge related than anything else.

It doesn't have to work like that though. Again, the comparison with CB is relevant where you can claw the money back from people that don't need it but these people won't lose the gateway to other benefits

DLA/PIP/AA are not an out of work benefit and are not means tested. They never have been. The biggest benefit costs are Universal Credit and Housing allowances. Perhaps should curtail them to save more money? 🙄

The numbers earning enough to meet a significant income threshold must surely be tiny though. Only 1 in 5 people on PIP now works at all because the criteria have been applied more and more harshly so it's now only for those with quite a significant degree of disability who are deemed disabled enough to be awarded at all. And of the 1 in 5 that work, a high percentage work part time in minimum wage or low paying jobs. Another small percentage work full time in minimum wage or low paying jobs. Of the tiny, tiny fraction that work full time in jobs paying enough to live off, how many are actually high earners earning enough for some threshold? I can't imagine it's more than the tiniest fraction and the amount they receive is so small it just seems very hard to believe it could recoup any real money. Many of these unusual high earners will only receive the basic £290 a month so only a little over £3000 a year from a tiny number of people. An even teeny tinier portion will be simultaneously eligible for the full amount which is still less than £10,000 a year and able to earn a high income. I agree that figures would be useful and I would reconsider my position were they to show otherwise but it just seems impossible from the tiny amounts awarded and the tiny number of people who must be in a position to earn a lot while simultaneously pretty severely disabled.

They only give an automatic badge for PIP but Attendance Allowance is always waved through and medical evidence can also be used for individual cases.

Restricting them to people on PIP would be illegal.

In fairness, sibling wouldn't claim anything were it not needed for the gateway element.

They don't have a mobility car despite being entitled as it makes no financial sense.

DH, who has had many wealthy clients over the years, commented that many of them can’t be bothered with claiming the state pension, never mind PIP. It would cost them more to pay their accountant to claim it, than it’s worth. Besides which, these people pay so much tax, PIP pales into comparison. It just looks like greed from the net beneficiaries, that they want even more for themselves from the net contributors.

The amount claimed by wealthy people in PIP is immaterial, compared to the amount screwed increasingly from the population by corporate capitalism. The working population are encouraged to scrap among themselves over crumbs, while wealth is being funnelled upwards all the time! The disabled are just scapegoated, as a distraction!

If he is a Millionaire then he is a tax payer.
Therefore he is paying for his own painting.

He is doing nothing illegal.

Disability payments are often too high. Some people are paid a huge amount of disability payments yet earn not one cent more and pay no tax at all towards their care..

Give an example from a reputable source of disability payments being too high, when Scope estimates the additional costs arising from disability were going to be £1,067 pcm in 2024, whereas PIP at the highest rate for both in 2025/6 comes to £812.23 pcm. Nobody is getting reimbursement in full for their extra costs arising - so who is getting disability payments too high?

Disability benefits are nothing to do with work or earnings, it’s about a contribution to those costs.

People, who get PIP and live in their own accommodation, rented or whatever, will pay tax, if they buy most goods (other than children’s clothes, basic food, etc) in the shops (VAT), have a car (VAT on it’s purchase, RFL, duty and VAT on petrol), pay council tax, and VAT on energy bills, etc! People tend to spend all their benefits on their costs related to disability, so the money is returned to the economy and creates more jobs.

People funded by social services in residential care must pay all their benefits except an inadequate allowance of about £26 per week, for personal expenses, towards their care. Even the £26 will likely go on goods and services, bearing VAT.

The only people, who don’t pay anything towards their care are funded by NHS Continuing Healthcare Funding. To get that, the bar is so high for medical needs, the claimant is going to be in no fit state to work, in my experience.

Far be it from me to question the veracity of the posters who start these innumerable threads about relatives/friends who are openly and outrageously abusing disability benefits in some way, but it's always surprising how garrulous these definitely not at all imaginary benefits cheats are. If I were of a suspicious disposition it might strike me as extremely unlikely that the, surely completely not made up, subjects of these posts are so keen to give such full and minute accounts of their PIP applications, medical history and financial circumstances to these nosy OPs with seemingly no provocation.
Perhaps these OPs should sell their, absolutely not fictitious or lavishly embroidered, stories to The Daily Mail, they're probably running short of scare-mongering clickbait articles about greedy, feckless disabled people draining the country dry.