As the Covid 19 crisis plunges the nation into unemployment, the Tory flagship welfare reform policy - The Benefit Cap - cascades its clutches across the country, taking no prisoners, like never before.
The recent increase to the basic benefit rates under the Covid-19 regulations deemed far more generous than the usual incremental annual rises (and let's be honest, the generosity here is measured against the recent five-year benefits freeze), provides the perfect opportunity for the rest of the population to experience life as a benefit claimant.
The all-too-familiar ground-hog day of stress and anxiety from a life on benefits becomes commonplace for many.
Perhaps this is the catalyst for change to the Government's harmful austerity policies.
Introducing the benefit cap
The flagship policy, introduced in 2013 and accelerated through the roll-out of Universal Credit (UC), is feared by many; justified by politicians; and ignored by the rest of the population. It was a policy most working people would never envisage having any connection to, and as a result, the decimation of the welfare state continued regardless.
The policy became popular with the British public by creating the narrative that it was inconceivable for someone on benefits to receive more money than someone who was working.
The public was asked to consider its moral position, and in the absence of truth from a bias media, was asked to judge whether someone who they deemed as 'workshy' - portrayed as someone who couldn’t be bothered to go to work and spent their day smoking cigarettes and watching Sky TV - should get paid for the luxury of doing so when the rest of us had to work hard.
And so it was that the benefit cap was born out of a belief that there was such a thing as the deserving and the undeserving poor; that things which come for free shouldn’t come easy.
How does it work?
To explain the benefit cap to anyone who hasn’t experienced it, and indeed for many that have, is to decry it as a complicated, arbitrary and bureaucratic policy, designed to cause maximum disruption to a person's life - economically, socially, and psychologically (God forbid anyone who should get too comfortable on benefits).
In practice, a cap is applied to the total amount of benefits a household can receive. If the total amount including UC entitlement and child benefit when added together is more than the set figures (below) then benefits are capped and the UC award is reduced by the amount over the threshold.
For single parents with resident children outside of London, the cap is pence over £1'666 per month, the equivalent to £20’000 per year, and £23’000 per year for people inside of London. The higher the rent or the more children within the household, the greater the risk of being subject to the cap.
The reality for many
A single parent with three children living in a two-bed social housing property, after having the benefit cap applied and a deduction for an advance loan they were forced to obtain whilst waiting a minimum of five weeks for their first UC payment, receives a monthly benefit amount of around £1480.
At ease, critics of the benefit claimant. Don’t get too excited, it’s not all a bed of roses.
Rent is a minimum of £380 every four weeks, in addition to rent and council tax arrears accrued during the initial five weeks waiting period for the first UC payment. Then there are historic tax credits overpayments once deemed not recoverable, now suddenly appear on the UC award letter (one underlying function of UC that is rarely discussed is its use to recover old debts that claimants thought had previously been cleared).
Then there are the usual bills: council tax contributions; gas and electric; tv licence; water; food; travel costs; mobile phone and internet. Plus the added costs of school uniforms; emergencies such as the washing machine breaking down; high-interest loans with loan sharks; birthdays and Christmas; and clothes and shoes for the children.
Most benefit claimants are unable to take advantage of cheaper utility tariffs or low-interest loans.
Forget about any luxuries, or weekend activities, or afterschool clubs.
Once upon a time you’d be forgiven for thinking that it’s not a significantly low amount to live on, or for believing the media who make outlandish slurs about people on benefits - that they shouldn’t complain about being poor; if they don't like it, they should go and get a job.
Despite this being a widely held view across the public, there is not a shred of evidence to suggest that people become too comfortable on benefits, or that the punitive measures of sanctioning and punishing people incentivise them to work; on the contrary, there is insurmountable evidence that confirms these measures cause debt, destitution and suicide.
But then Covid-19 happened and suddenly the UC claims line was swamped with people who’d never claimed a benefit in their life; the critics of benefit claimants now found themselves completely reliant on the same system they’d snubbed.
The Government, in its wisdom, had to do something to appease all those voters who suddenly found themselves without an income and asking how on earth one is supposed to manage on the equivalent of £73.10 per week. So, it increased the basic benefits rates.
All is not as it seems
The Chancellor was praised for his generosity and for recognising the predicament hard-working people now found themselves in; the one million claims for UC were, in the Government's view, made by the deserving poor, unlike those historic claimants who were, of course, the undeserving poor.
But not to worry, because everybody would benefit from these increases, right?
A reckless folly?
The increase in the basic benefit rates, implemented from April 2020 for one year, now takes many people who weren’t previously subject to the cap, over the threshold. For new claimants, this may seem immaterial, but for those who were already claiming benefits, including those that worked whilst claiming a UC top-up and were therefore exempt from the cap, will now find themselves subject to the cap, and in many cases much worse off.
Combine that with a deeply punitive and inherently flawed system, manifested through what’s known as ‘administrative errors’, many claimants will receive only a fraction of the purported increase, whilst others will receive even less than what they received when they were on the old, lower rates.
People are poorer from a policy that was supposed to make them better off at a time when everybody needs much, much more.
A reckless folly or contrived punishment? The answer remains to be seen. But with a Government who has decimated society through austerity and relentlessly demonised benefit claimants for ten years, and now finds itself in complete disarray amidst a national crisis, it’s hard to not be cynical about their motives.
Time to reflect
So, whilst lawyers across the country gear up to take the Government to court over their actions to discriminate, yet again, against benefit claimants, we know one thing is for sure: the benefit cap will be an unwelcome policy to many more people than was ever intended.
Let us hope some much-needed reflection paves the way for a change in how we view each other, how we treat those who fall on hard times, and how we must invest in and nurture the welfare state for the benefit of all. One can never know when a national crisis may rear its ugly head, and a tattered welfare state might be all that is left.