More holes in the safety net
From April this year. most social security claimants will find themselves even worse off as a result of new benefit rates that have gone up by less than prices, the abolition of some benefits and the erosion of others. Although most of the changes to the social security system contained in last year’s Social Security Act will not be introduced until April next year, there have already been some changes from April this year which can only mean even greater hardship and deprivation for the most vulnerable sections of the population.
The maternity grant of £25 which used to be available to all mothers without their being subjected to a means test has been abolished. It has been replaced with a new grant of £80 (still not enough to buy all the things necessary when a baby is born) which will only be available to mothers already in receipt of Family Income Supplement (FIS) or Supplementary Benefit. Also the tax-free maternity allowance has been replaced for most women with “statutory maternity pay” which will be subject to tax.
Disablement benefit for people assessed at less than 14 per cent disability has been abolished. (The DHSS cynically rates different types of disability so that, for example, loss of a middle finger is assessed at 12 per cent, and entitles the person concerned to a lump-sum payment). Around 90 per cent of all awards each year are for people who are in this category.
The death grant of £50 has been abolished. Instead there will be a means-tested funeral grant (or loan, when the new Social Fund is introduced next year) for those on FIS. Supplementary Benefit or Housing Benefit. As with the abolition of the maternity grant the declared intention behind this change is to “target” benefits on those who are deemed to need them most. Behind this rhetoric of cost-effectiveness is the fact that for many people birth and death will be events they can ill afford.
Non-means-tested benefits, like retirement pensions, child benefit and unemployment benefit, have all been effectively cut in real terms because once again they have not been up-rated in line with prices. Unemployment benefit – an insurance-based benefit – has become more difficult to get because of a more searching “available for work” test which means that you have now not only got to state that you are available for work, but prove it by showing that you are prepared to travel, take low-paid work and. in the case of women with young children, that alternative child-care arrangements could be made immediately in the event of a job offer. If you do not prove this to the satisfaction of officials then you can be disqualified from receiving benefit for 13 weeks. (The period of disqualification has just been increased from six weeks).
Supplementary Benefit claimants currently get their rent and rates paid in full through “certificated” Housing Benefit. Until recently claimants paying off a mortgage received their mortgage interest repayments in full. But this year the DHSS will only pay half of those repayments for the first 16 weeks on Benefit. In addition to the 4.6 million households dependent on Supplementary Benefit, a further 3.9 million households get “standard” Housing Benefit. In order to operate this scheme there is a notional weekly “needs allowance” – the amount that is officially deemed to be the minimum necessary to live on. Applicants for “standard” Housing Benefit whose weekly income is equal to the “needs allowance” are entitled to a rebate of 60 per cent of their rent and rates. If their income is below the “needs allowance”, Housing Benefit is increased and where it is above then there is a corresponding decrease in benefit. Under the new plan for Housing Benefit, to be introduced in 1988, there will be a marked reduction in the “needs allowance” and, as a result, it is estimated that two million people will have their Housing Benefit cut. In an attempt to reduce the impact of such a big cut, the government has this year put up the needs allowance by much less than the rate of price increases. And, at the same time, the amount of benefit granted to those with incomes above the “needs allowance” has been cut so that now, for every pound that a claimant’s income exceeds the “needs allowance” the rent rebate that they will get will be reduced by 33p instead of 29p. which was the old rate.
Eventually the government is determined to make everyone pay at least 20 per cent of their rates which will, according to the Social Security Advisory Committee s report for 1986/87:
result in a real cut in the value of the safety net for the poorest people in society, with increased hardship or increased debt or both.
There is both an obvious economic motive behind this plan and also a less obvious political one. The Tories have long believed that Labour does well in poor inner city areas where there are large numbers of low paid and claimants because such people are inclined to vote for high-spending Labour councils which also put up the rates. They hope that by making everyone think that they pay at least part of the rates, everyone will also react against the effects of profligate Labour council policies and be less likely to vote them in again. Well that’s the theory anyway, although it seems unlikely that even if this is really how people decide how to cast their vote, that making people poorer by effectively cutting their benefits will make them more likely to vote Tory!
These latest changes to the already grossly inadequate benefit system represent just one more cynical attempt to attack the poorest, most vulnerable people in society in the name of economic efficiency. Not only will the elderly, the disabled, the unemployed and the low paid get poorer as a result, but their lives will be more closely monitored by the state because of the shift away from universal benefits to means-tested benefits. More and more people will now have to beg for their pittance rather than claim it as a “right”.