Nobody gets rich on benefits

The discussion about the impact of so-called benefit cap is generating a lot of heat and very little light, and risks being a diversion from the real issues in the UK Government’s welfare reform agenda.

The limit of £500 on the total amount a household can receive in benefits will affect very few people.  It’s not easy to find out just how many, but BBC reports estimate the figure to be around 50,000.  This sounds a lot, of course, until it is compared with the total number of claimants of out-of-work benefits – which stands at 4.7 million.  In other words, just 1% of claimants receive more in benefits than UK average earnings.

Doubtless some will claim that even 50,000 people are 50,000 too many.  But the benefit system is very tightly managed, and pays extremely low sums.  The average weekly amount of benefit received by Jobseekers’ Allowance claimants in Wales is £63.69, for Incapacity Benefit / ESA claimants it is £64.38 a week and for Income Support claimants £85.64 a week.  Even with Housing Benefit covering all of a claimant’s rent, the vast majority of claimants receive very substantially less than Osborne’s £500 limit.

Any household that manages to receive more than £500 a week in benefits can only do so if they have very substantial needs indeed – typically those are needs that arise from the presence of children in the household who attract Child Benefit of £20.30 a week for the first child and £13.40 for subsequent children and Child Tax Credit payments of varying amounts with the most being payable for disabled children.  We don’t know much about the circumstances of the 1% of people getting more than £500 a week, but the simple maths of benefit rates means that it is highly likely that they are either families with more than one disabled child, or with an unusually large number of children.  Are disabled children and the parents who cannot work in order to care for them who the Chancellor means when he refers to living on benefits as lifestyle choice?

The focus on the benefits cap shifts attention away from the extremely low rates of benefits that the vast majority of people receive. It promotes the idea that benefits are some sort of special offer payable to anyone who fancies a few free quid, not an essential safety net that is payable only in certain circumstances. And last but not least the debate about the cap hides the appalling fact that the number of Job Seekers Allowance claimants in Britain has increased by 77% since 2008 – not because they’ve spotted a cash-cow but because they’ve been chucked out of work thanks to the recession and spending cuts.

Victoria Winckler is Director of the Bevan Foundation