Welfare And Benefits Flashcards
What are contributory benefits?
Benefits paid on the basis of previous contributions. Pay in when you are young healthy and in work and draw out when you are old sick or unemployed.
National Insurance introduced by liberal gov in 1911 is the obvious example. Old age pension is dependent on NI contributions, you get higher Jobseeker’s Allowance if you have paid NI
What are Non-contributory benefits?
These are paid on the basis of need, not dependent on previous contributions.
Some of these benefits, such as Jobseeker allowance and Housing benefit are dependent on income and claimants are required to undergo a ‘’means test” to ensure they need the benefit
Some universal benefits are paid regardless of income, for example winter fuel payments and free TV license for the elderly. Child benefit used to be universal but coalition gov introduced restrictions on people earning over 50k
How much do benefits cost?
Very expensive
Social protection - mainly pensions and benefits largest items of public expenditure, costing about £256bn a year - about 30% of public spending
What are other welfare benefits?
Unemployment benefits
Child benefits
Housing benefit
Child and working tax credits
Disability benefits
What will happen as the population ages and life expectancy increases?
It will get more expensive
What do some people argue about universal benefits?
That universal benefits not dependent on contributions weakens the idea that people have a stake in the system
It is no longer a temporary safety net - people remain on benefits for many years, even in times of economic prosperity
Some argue that handing out benefits without concoctions acts as a disincentive to work, promotes idleness and traps people in poverty
When people on benefits enter employment what do they face?
Very high marginal tax rates, this means they pay a large proportion of each extra pound they earn in tax and lost benefits - plus they have to for child care, communising costs etc
What is Jobseeker’s Allowance
Paid to adults working fewer than 16 hours a week. Higher payment for those with significant NI contributions
What is Income support?
Non-contributory benefit for those on low income and not in full-time employment
Employment and Support Allowance and Disability Living Allowance?
Paid to sick and disabled. Paid in different rates depending on disability.
What did Coalition gov introduce that proved controversial?
Introduced Work Capability Assessments
What is Welfare Reform Act 2012
In 2012 Coalition gov introduced radical reforms that will be rolled out gradually through 2017 (deadline pushed back) at a cost of 2bn
What is idea of Welfare Reform Act 2012?
Idea is to simplify a complex system and ensure that work pays and remove disincentives to work
Idea is that claimants will be able to retain more of their benefit as they move into work, removing the problem of high marginal tax rates
What is the “keystone” of the 2012 act?
Universal Credit
What will be the 6 other benefits Universal Credit will replace
Means tested part of Jobseekers Allowance
Means tested part of Employment and Support Allowance
Income Support
Child Tax Credits
Working Tax Credits
Housing Benefit - rent element only
What did the 2012 Act also introduce?
The Benefits Cap
Idea that people should not get more money than the average family in work
What can the total amount of benefits not exceed a week?
£500 (£26,000pa)
What was the benefits cap reduced to in April 2017?
£20,000pa (£23,000 in London)
What families does the benefit cap mostly affect?
Mostly affects those living with a lot of children in expensive housing in central London
What was the Child Tax Credit Limited to?
From April 2017 Child Tax Credit limited to the first two children
What will happen to Child Tax Credit?
Being phased out by universal credit, but two children rule will still apply
What are the exemptions for the two child rule
Adopted children
Multiple births (twins)
Non-consensual conception (rape)
How is housing benefit administered?
By local authorities on behalf of the Department of Work and Pensions
What is housing benefit?
Pays all or part of the rent of the low income tenants
What is local housing allowance (LHA) set amount of housing benefit paid if you are in private rented accommodation. The amoun
A set amount of housing benefit paid if you are in private rented accommodation. The amount you get depends on where you live
What was there huge controversy over (housing benefits)
The bedroom tax, more correctly known as the spare room subsidy
What is the idea of bedroom tax?
Idea to free up larger properties for families on the waiting list
Those with spare rooms lose £40 a month in housing benefit
What are pensions?
Pensions are a contributory benefit paid to people when they retire
Why will cost of pensions increase?
People living longer and ageing population
How has the governemnt responded to rising pension costs?
By equalising the retirement age of men and women, gradually raising the retirement age to 66 in 2020 and 67 in 2026, linking it to life expectancy in the future
