Cap on benefits to 26k- am I missing something?

[buggyRunner]

As far as I can gather it's the normal benefits ie housing/ cb and wtc. This seems like a large sum. Is it accross the board or does it include disability related benefits? Are the figures misleading?

Should we cap a family's income to the equivalent of £35k a year because it may mean they can no longer live in an area where a working family earning £35k a year cannot afford to live?

Niceguy
80% of HB recipients ARE working. And they still cannot afford to live there.

See, Mme, that's why I think there should be a Central London exemption for people in low-paid jobs.

Sooty
Yes, that is another problem. The toothless CSA. Did you know that 2/3 of resident parents receive no maintenance payments from the absent parent?

And now the government is proposing changes that the resident parent will have to PAY for the CSA-replacement agency to take up the case.

£100 - or £50 if you are on benefits.

NiceGuy - They ARE precisely the people that WILL be affected by the benefits cap. IDS's claim that 'no-one on WTC will be affected' is just a soundbite designed to make the general population feel OK about the changes. It's just SPIN. The benefits cap starts in April 2013, when Universal Credit comes in. At that point, WTC will CEASE TO EXIST. And as it will NO LONGER EXIST, those people will NO LONGER BE EXEMPT FROM THE CAP. It's a bloody spin-doctor produced soundbite that realistically means NOTHING when WTC is abolished and UC comes in.

Add to that the fact that any money paid under Universal Credit DOES NOT have a separate amount for people that work or don't - it's just that the AMOUNT of earnings you receive over your 'personal' earnings disregard is taken off the 'maximum amount of UC payable at the rate of 65p in every pound. There will also be OTHER deductions made. Like any help with childcare costs will come OUT of the utter maximum that you are allowed (it's often less) of £2,166.67pcm too. After they have deducted 1.5 times whatever the housing costs help you are claiming for is. It's a fairly complex calculation, but in essence, it means that people with dc - even one - that they have to pay childcare for - working FT for NMW - will be significantly worse off, to the point of being unable to afford any AVAILABLE housing NEAR THEIR JOB - don't forget that they are EMPLOYED.

Lily
It is an interesting idea, just not sure where they would draw the boundaries. Even going pretty far out of town, when we looked at houses they were very expensive.

You could do it on the tube map! Say, for anyone working in Zones 1-4 and earning less than £x, could get an additional housing allowance, or be exempt from the cap.

Or you could do it on average house prices within an x-mile radius of your work, depending on what a 'reasonable' distance to travel is.

Bear in mind that a Nursery for day-care for the under school-age in my town costs a whopping £52 a DAY...a person on NMW EARNS just £45.60 a day, as they are not paid for their lunch break, so they are classed as working for 7.5 hrs a day.

Do the MATHS!

Oh - and school-holiday care for school-age children costs £50 a day, too. It costs £12.50 for THREE HOURS after-school club too. So it's no better if your dc are school age, really!

(oh - and that £45.60 NMW earnings is BEFORE tax!)

But would people then move in and out of these zones according to their circumstances?

I think by making this more complicated (which is what Universal Credit is going to do - Hunty has almost self-combusted trying to work it out) we make it more difficult for the truly needy to access assistance.

I wrote a long blog post (it is on the blog that I linked to earlier) about the Welfare State.

I believe we are abusing our Welfare State by expecting it to pay for the shortfall between incomes and outgoings, particularly housing, travel and childcare costs. It was never meant to pay these costs.

It was meant to be a safety net for the most unfortunate. And now they cannot access this because the WS is so stretched.

The Government HAVEN'T yet decided whther child maintenance will be included in the benefits cap. I am hoping not - I'm ALREADY screwed. If they deduct that additional £288.33pcm from the UC they will pay me, I might as well throw us all off a brisge, because we'll be living UNDER one!

How many employed people are getting over £35K in benefits just out of interest?

Mme - that is quite shocking about CSA and the proportion that actually goes towards the children. It is very hard for anyone to survive on one income in London unless in shared accommodation. But I am not sure that the tax payer should be funding instead of absent fathers. I really hope this is not an area which is highly fraudulent (claiming dad is not there to get HB).

yy I agree it's horrendously complicated.

As we have it at the moment though, there is horrendous resentment, because there are seen to be 3 'classes' (bad word, but ykwim) of people - the 'people on benefits', the 'workers who pay for everything' and the 'super-rich'.

And obviously, this is not correct, because, for example, in group 1, you have people who are in low paid jobs, people who cannot work through disability, people who are carers etc. In group 2 you have a huge variation (often because of geography) in terms of disposable income, and in group 3, who are often derided as 'fatcats', you have some bankers, some business people, and then people like JK Rowling....

But it is definitely true that there ARE people who milk the system, both at the top and the bottom. And I think the basic premise that IDS put across is a good one - that if you are able to work, it should pay you to do so. How you define 'able to work' is a whole different kettle of fish.

Hunty
Found this on Guardian website, it seems to suggest CB will not be exempt. Or am I reading it wrong?

The Department for Work and Pensions said there had to be a limit on the amount of money benefit claimants could receive.

"We think that limit is set at a fair rate of £26k ? the equivalent to someone earning £35,000 before tax. If you take child benefit out of the cap, it will simply become ineffective, failing the very principles of our reforms, which is to bring fairness back into our welfare system while ensuring that support goes to those who need it."

"SO, under the current Tax Credits/Benefits system, this family receives £1,849.37pcm after housing costs. Under the new Universal Credit, this family will receive £1,222.50 after housing costs. This is a drop of £626.87pcm, or £144.66 A WEEK."

I feel really mean posting this because your personal circumstances sound really difficult. FWIW I can't see many people begrudging you living off benefits and the troubles with getting the disabilities recognised sound awful.......but the trouble with your actual figures is that there will be so many living off less after housing costs that work full time and that also have 3 or 4 kids to support. This is the reason so many support the cap.

Sooty My assistant (I'm disabled) her partner & 2 kids both work ft, get hb on private rented (ex-council) house. The council won't even put them on the waiting list. They've been evicted about every 18mths - 2yrs when landlords get repo'd for not paying mortgage or decide to sell up. Currently, her ds bedroom has water running down the walls, clothes in wardrobe mouldy etc. The kids have changed schools, got rid of their belongings to save on moving stuff, etc.
Buy to let mortgages are given on proof that local rent (ie what you can charge) is at least 20% higher than mortgage repayments. But nobody else can get access to those mortgages. The Building soc/bank then gets their profit on the deal, so does ll - all paid by hb.

Here Hunty

Sooty
I agree with you. The government should not be making up the shortfall when absent parents do not stump up. Some women fight for years and then get awarded pennies. No joke. Here read more about it

If you are looking to educate yourself on the other side of the spin, then Frothers is a good place to start. It is written by MNetters from all walks of lives. Most are Labour supporters but we do have Lib Dems and Tory voters who are upset at the cuts. We concentrate on issues that will affect children and families, and those with SN and their carers.

A friend of mine lives in Westminster. She has 3 children. They are all boys and one is a teenager, the other two are preschool. Her DH left her.

She lives in a 2 bedroom flat with many many stairs and an often broken lift despite the fact that she needs to clunk prams up and down.

Her neighbours aren't nice.

Her rent is just under £2k per month.

She is on a list to move as she is overcrowded, but she has been told that she is likely to remain on that list for at least 10 years.

Her teenage boy has one room, she and her two preschool children share the other. Her kitchen/living room counts as a bedroom apparently.

Benefits should not be capped. Rent should be.

Mme - that's what I am saying, IDS this morning has revealed that Child Benefit WILL be included in the cap, therefore the Universal Credit that is payable to that family will be reduced penny-for-penny by any Child Benefit they receive.

Huntycat's issue though isn't with the benefits cap. It's whether:

1. Is she able to work with her current health issues, as the system says she is, but she says she is not? So was this assessments correct?

2. Is she making additional costs due to her children's health care issues, and if so, why is she not receiving DLA or other support for that?

The system seems to assume she is a healthy parent with healthy children - if that's the case, then there is no reason why she should be earning more in benefits than the average nurse or teacher. But if that's wrong, and she can't work, or has higher costs/carer responsibilities due to the many health care problems in her family, then she should be made exempt from the cap.

So the issue here is how well the government understands and deals with possible exceptions to the system. It's not whether the £26k cap is ok for healthy families.

Ciske said what I wanted to say about Hunty's situation.

I don't have disabled children, but I would imagine that Hunty has extra costs to do with the children's disabilities.

Ciske yy, I totally agree with your post.

Fwiw (and I know this won't be popular), I don't really see why people like the ones in my family who have decided to live off benefits for their entire lives SHOULD receive the same as the average teacher or nurse - they spend their lives shopping and going on holiday, or going out to clubs, or watching TV etc etc - and I really don't see why they should receive the same amount of money as someone who does a really hard job all day.

For someone who has difficulties such as a disability (either themselves or a child, or a partner), then I'd give them as much help as they need.

Lily
I absolutely agree with you that people who don't want to work should not get benefits.

But how do you find out who wants to work, and who doesn't.

Who would love to work (like Hunty) but because of health or childcare restrictions cannot work. Or just simply cannot get a job.

If you penalise the first, then you automatically penalise the latter. There is not a one-size-fits-all solution.