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Tag Archives: tax credits

The reality of the Coalition’s crackdown on tax credits

02 Monday Jun 2014

Posted by Mike Sivier in Benefits, Employment, Housing, tax credits

≈ 18 Comments

Tags

agencies, agency, austerity, collection, debt, disability, disabled, earn, employer, hospital transport, low, minimum wage, national, NHS, pay, pension, poor, sick, tax credits, Tony Blair, working, zero hours


Nothing more to say: This Tax Credits advert was intended to warn people to keep up-to-date with information they send HMRC about their Tax Credits claim; now it seems the message is much simpler - they want to stop paying you anyway.

Nothing more to say: This Tax Credits advert was intended to warn people to keep up-to-date with information they send HMRC about their claim; now it seems the message is much simpler – they want to stop paying you anyway.

A guest blog by ‘Mimismum’.

What follows was posted to Vox Political as a response to Tax Credits and Debt Collection Agencies: Peachy’s Comment. It details the facts of the situation for just one struggling family and as such was worth a larger audience than it would have received as a comment on another article.

This government scares the s**t out me. I don’t know how much more stress I can take now. It has gone beyond anything like “austerity” or “in it together” rhetoric and is now a witch hunt against the poor or low earners, sick and disabled – even going as far as blaming us for our own predicament.

We have seen our family income go from £800 from my other half’s wage back in 2009 to just under £350 now, due to successive redundacies. He works and has never had any unemployment in the past 12 years, and yet each time he calls tax credits to say there is a change in our income they lower the award (ha! thats a rich term for it now, its garbage to call it an award) based on his predicted income, even though its gone down and down.

Last year he worked overtime for two weeks, got paid an extra £20 in the month and they hammered us by cutting his Working Tax Credits by £30 a week for the entire year! He recently got made redundant again and is now working two temp jobs (one of which is zero hours) and he has got hours bouncing around all over the joint. Family life has been shot to s**t, and when he rang Tax Credits to tell them they just said, “Oh well, as long as it’s over the 24 a week you are okay.”

Today they shoved some money in the bank. He rang to ask what the hell it was for; they can’t tell him because “We haven’t had the renewal paperwork in.” For goodness’ sake, we just wanted to know what this extra money is, it’s not rocket science! The guy refused to tell us!

My other half had to use it to pay bills because his wages were short due to the zero hour contract job changing how they pay wages now – because of that stupid pension scheme c**p the government forced on everyone. Even though he already has one from his previous job, this company took money for their pension and said they wouldnt pay into his! Oh, and because his old employer forgot to send his P45, he had to pay emergency tax as well!

We can’t do this any more. The stress of him working two jobs, my disability, and having children is driving a wedge between us. One of our children has autism, and I am struggling to maintain a routine that they desperately need – and I can’t. The other half is now on National Minimum Wage for both crappy jobs; both want exclusivity out of him and now keep rostering him on during the other job’s time. Both knew he had a second job when they took him on, and now we find out that tax credits can send debt collectors and bailiffs around for money they say anyone owes, just like that.

I wish to god Tony Blair had not invented tax credits, because it gives employers a get-out clause for paying decent wages. I can’t get hospital transport fees out of the NHS for trips I have had to make and even though they were claimed within the time allowed – no payment has been forthcoming because “it’s too late now” for them to pay out. I have another appointment in two weeks’ time which I have to cancel as I cant get there, because my other half can’t take time off work from either job – and my physio is about to strike me off for the same reason.

I am sick of this mess; we dont deserve this, and if we find out Tax Credits have overpaid us as well I don’t know what we would do. We have an income of less than average and we pay our own rent; we don’t claim Housing Benefit because the council stuffs it up and we get into arrears so we manage on our own.

We claim less of what we are entitled to because I am scared they will want it back, and now they are playing this game with tax credits.

I don’t want to be punished any more for being disabled, a parent or married. I have had enough of being poor and scared. All I want is for my other half to have a decent job with a decent wage, and there is nothing out there now.

No jobs, nothing, and it’s getting worse.

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Inflation drop doesn’t mean wages will rise

16 Wednesday Apr 2014

Posted by Mike Sivier in Business, Cost of living, Economy, Employment, People, Politics, Poverty, Public services, Tax, UK, Utility firms

≈ 16 Comments

Tags

banker, beast, bill, boss, Coalition, Conservative, Customs, debt, Democrat, economy, Ed Balls, employment, FTSE 100, fuel, George Osborne, government, groceries, grocery, health, hmrc, income, inflation, insurance, Keith Joseph, Liberal, Media, medicine, Mike Sivier, mikesivier, MP, Nicholas Ridley, people, politics, privatise, Revenue, salary, self-employed, shareholder, social security, starve, starving, tax credits, Tories, Tory, unemployment, utility, Vox Political, wage, welfare, welfare state


'For the privileged few': If you're earning the average wage of £26,500 per year, or less, then nothing George Osborne says will be relevant to you.

‘For the privileged few’: If you’re earning the average wage of £26,500 per year, or less, then nothing George Osborne says will be relevant to you.

Why are the mainstream media so keen to make you think falling inflation means your wages will rise?

There is absolutely no indication that this will happen.

If you are lucky, and the drop in inflation (to 1.7 per cent) affects things that make a difference to the pound in your pocket, like fuel prices, groceries and utility bills, then their prices are now outstripping your ability to pay for them at a slightly slower rate. Big deal.

The reports all say that private sector wages are on the way up – but this includes the salaries of fatcat company bosses along with the lowest-paid office cleaners.

FTSE-100 bosses all received more pay by January 8 than average workers earn in a year. Their average annual pay rise is 14 per cent. Bankers get 35 per cent. These are all included in the national private sector average of 1.7 per cent, which means you get a lot less than the figures suggest.

Occasional Chancellor George Osborne said: “These latest inflation numbers are welcome news for families.” Why? Because they aren’t sinking into debt quite as fast as they were last month? They’re great news for the fatcats mentioned above, along with MPs, who are in line to get an inflation-busting 11 per cent rise; but as far as families are concerned, rest assured he’s lying again.

“Lower inflation and rising job numbers show our long-term plan is working, and bringing greater economic security,” he had the cheek to add. Employment has risen, although we should probably discount a large proportion of the self-employed statistics as these are most likely people who’ve been encouraged to claim tax credits rather than unemployment benefits and will be hit with a huge overpayment bill once HMRC finds out (as discussed in many previous articles).

The problem is, Britain’s economic performance has not improved in line with the number of extra jobs. If we have more people in work now than ever before in this nation’s history, then the economy should be going gangbusters – surging ahead, meaning higher pay for everybody and a much bigger tax take for the government, solving its debt reduction problem and ensuring it can pay for our public services – right?

We all know that isn’t happening. It isn’t happening because the large employment figures are based on a mixture of lies and low wages. The economy can’t surge forward because ordinary people aren’t being paid enough – and ordinary working people are the ones who fuel national economies; from necessity they spend a far higher percentage of their earnings than the fatcats and it is the circulation of this money that generates profit, and tax revenues.

Osborne compounded his lies by adding: “There is still much more we need to do to build the resilient economy I spoke of at the Budget.” He has no intention of doing any such thing. He never had.

Conservative economic policy is twofold, it seems: Create widescale unemployment in order to depress wages for those who do the actual work and boost profits for bosses and shareholders; and cut the national tax take to ensure that they can tell us the UK cannot afford a welfare state, opening the door for privatised medicine and private health and income insurance firms.

This is why, as has been discussed very recently, leaders of the Margaret Thatcher era including Nicholas Ridley and Keith Joseph determined that the defeat of the workers would require “the substantial destruction of Britain’s remaining industrial base” (according to ‘The Impact of Thatcherism on Health and Well-Being in Britain’). It is, therefore, impossible for George Osborne to seek to build any “resilient economy” that will improve your lot, unless you are a company boss, banker, or shareholder.

The plan to starve the public sector, as has been repeated many times on this blog, has been named ‘Starving the Beast’ and involves ensuring that the tax take cannot sustain public services by keeping working wages so low that hardly any tax comes in (the Tory Democrat determination to raise the threshold at which takes is paid plays right into this scheme) and cutting taxes for the extremely well-paid (and we have seen this take place, from 50 per cent to 45. Corporation tax has also been cut by 25 per cent).

This is why Ed Balls is right to say that average earnings are £1,600 per year less than in May 2010, why Labour is right to point out that the economy is still performing well below its height under Labour…

… and why the government and the mainstream media are lying to you yet again.

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Victims tell how they were unfairly knocked off sickness benefits

25 Saturday Jan 2014

Posted by Mike Sivier in Bedroom Tax, Benefits, Cost of living, Disability, Employment and Support Allowance, Politics, Poverty, tax credits, UK

≈ 33 Comments

Tags

allowance, bedroom tax, benefit, Centre, CESI, Conservative, contribution-based, David Cameron, debt, Department, disability, disabled, DWP, economic, employment, ESA, fuel, government, housing benefit, Iain Duncan Smith, IDS, Incapacity, Inclusion, income related, Income Support, Jobseeker's Allowance, married, Mike Sivier, mikesivier, minimum wage, national, office, ONS, Pensions, people, politics, poverty, sick, social, social security, statistics, Steven Dix, support, tax credits, Tories, Tory, unemployment, victim, Vox Political, welfare, Wonga, work, working


130628esaappeals

‘Have 230,000 sick and disabled people been wrongly knocked off-benefit and forgotten?’ That was the question posed on this blog just two days ago, based on an analysis of statistics from the ONS and CESI. Without more input from the Department for Work and Pensions it is impossible to answer the question – but two former claimants have come forward with stories that support the allegation.

“I’m one of them!” wrote Steven Dix on Twitter. “My wife and I are now £400 a month worse off, with IDS’ ‘help’!”

He explained: “When I was on Incapacity Benefit it was indefinitely – then came ESA.”

Mr Dix was put on contribution-based ESA totalling £97 per week – but this only lasts for a year. After that, “I was told that my wife, who is on minimum wage at Asda, earns too much for me to get income-related ESA.

“We were told we could only apply for Working Tax Credits, but guess what? Because I got ESA in the tax year 2013/14 we don’t get anything until tax year 2014/15 when we will have to apply again, and we can’t have anything backdated until then!

“We married on September 3, 2013; we did not qualify for housing benefit between then and December 25, 2013 and so now have £400 rent arrears to make up, and I have to find another £68 for overpayment of housing benefit (the bedroom tax) to pay back for that period too!”

Mr Dix stated that he had been made to feel like a criminal. “My crimes? I’m disabled and got married!

“The government keep on about how they’re helping working taxpayers and how they are helping married couples like my wife and I, but I really am wondering how much worse things would be if we weren’t getting David Cameron’s ‘help’!

“Now of course I have no independant income, I’m unable to work, and only have £168 DLA at the lower rate per month, half of which goes to Wonga.com!”

So this victim clearly deserves sickness benefit because he is unable to work, but has been denied it because of the arbitrary 365-day limit on contribution-based ESA; his low-paid wife can’t claim Working Tax Credits because of a legal loophole and so they have had to take money from a payday loan firm – the one that famously contributes to Conservative Party funds.

How convenient for Wonga.com and the Tories. How devastating for Mr Dix and his wife.

On Facebook, a person going by the moniker Nomine Deus tells us: “I was kicked off-benefit (long term Incapacity) in 2012.

“I am not eligable for Jobseekers [Allowance] or Income Support as my wife works and is paid just over the qualifying amount for one and works too many hours for the other. I live out in the sticks and would be forced to travel to sign on at my own expense and then put onto workfare etc, again at my own expense (or rather my wifes expense). I am forced, therefore, not to sign on at all.

“We are already in fuel poverty and struggling financially. I am still suffering my original condition. I believe there must be many like myself out there.”

These are only two stories of people who have fallen through the holes Iain Duncan Smith has created in what used to be the safety net of social security.

Who can doubt that there are many, many more?

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Coalition spins a li(n)e about disabled people and work; media ignore it

08 Wednesday Jan 2014

Posted by Mike Sivier in Benefits, Conservative Party, Corruption, Disability, Employment, Liberal Democrats, People, Politics, UK, Workfare

≈ 16 Comments

Tags

allowance, benefit, benefits, cheat, Coalition, Conservative, declare, Democrat, Department, disability, disabled, DWP, Easyjet, employment, ESA, fiddle, government, ignore, Jobseeker's Allowance, Lib Dem, Liberal, Media, Mike Sivier, mikesivier, news, Pensions, people, politics, programme, self-employed, sick, Sir Stelios Haji-Ioannou, social security, statistics, support, tax credit, tax credits, Tories, Tory, training, unemployment, Vox Political, welfare, work, work-related activity group


workprogramme1

Is it possible that the news media are finally learning to examine Coalition press releases critically, rejecting those that don’t stand up to scrutiny?

There’s a crumb of hope in the fact that the latest disinformation about disabled people has received a very poor pick-up in the press. This is probably because it is easily-disproved nonsense.

The release claims “More than 500 disabled people a week supported into work or training”, which is a grandiose claim when one remembers the trouble suffered by the DWP in doing just that, only a few months ago.

According to the text, the DWP reckons more than 78,000 “opportunities for disabled people” have been created since 2011, where they have either found a job or “taken a significant step towards the workplace”.

But the logic falls down when you get to the quotation from Sir Stelios Haji-Ioannou, founder of Easyjet. He said: “Already over 100,000 disabled entrepreneurs employ an equivalent number of people in their business start-ups.”

Firstly, in the light of other quoted statistics that say 21,000 (of the 78,000 initially mentioned) have been on work experience placement, while more than 10,000 more started in sector-based work academies, one must wonder where 53,000 of the people mentioned by Sir Stelios came from.

Secondly, did you notice that he let the cat out of the bag (so to speak)? “Business start-ups”, is it?

Didn’t we all discover, via a BBC 5 Live investigation back in February last year, that job seekers on the work programme were being encouraged to declare that they were self-employed – when they aren’t – in order to get more money in tax credits than they would on Jobseekers’ Allowance?

This is just the same scam, applied to people on disability benefits like the work-related activity group of Employment and Support Allowance. Once their year on ESA runs out, they have a choice of going on Jobseekers’ Allowance (which is problematic as they cannot say they are fit for work), going without benefits altogether, or taking the self-employed cheat.

Some of them might be working but it seems likely that the vast majority aren’t.

Meanwhile, the government gets to fiddle the unemployment statistics to make it seem that the Work Programme is succeeding and more people have jobs.

It is right that the news media should not promote this blatant false accounting. Instead (as Elizabeth Caldow states in the comment column below) they should be exposing it for the outright fabrication that it is.

There should be a law against it.

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The verdict: Universal Credit is a Governmental Disgrace

05 Thursday Sep 2013

Posted by Mike Sivier in Benefits, Conservative Party, Politics, Public services, UK

≈ 25 Comments

Tags

allowance, Amyas Morse, benefit, benefits, budgeting loan, child, Coalition, computer, Conservative, Department, Department for Work and Pensions, Director General, DWP, employment, government, housing benefit, Howard Shiplee, Iain Duncan Smith, income based, Income Support, IT, Jobseeker's Allowance, Labour, Liam Byrne, Mike Sivier, mikesivier, NAO, national audit office, Pensions, people, politics, returned to unit, RTU, social security, support, tax credits, Tories, Tory, UC, unemployment, Universal Credit, Vox Political, welfare, work, working


Can the DWP do anything right? Universal Credit joins the Work Programme and the murderous administration of Employment and Support Allowance on the list of Iain Duncan Smith's failures.

Can the DWP do anything right? Universal Credit joins the Work Programme and the murderous administration of Employment and Support Allowance on the list of Iain Duncan Smith’s failures.

The National Audit Office has published its ‘early progress’ report on Iain Duncan Smith’s flagship Universal Credit scheme – and it is damning.

The report states that, after years of development in which £425 million was spent on the scheme, the Department for Work and Pensions does not even have a detailed view of how Universal Credit is supposed to work.

I should just stop there and spend the rest of this article discussing that one piece of information. After months and years of listening to ‘RTU’ ranting about how Universal Credit was going to be a revolution in benefit claims, we now know that he does not know – and never bothered to work out – how his revolution was going to be delivered!

Nor does Howard Shiplee, the ‘director general’ who has been talking it up on the media over the last few days.

Universal Credit is an attempt to “simplify” six major areas of social security into one streamlined payment system. They are: Income Support, income-based Jobseekers Allowance, income-based Employment and Support Allowance, tax credits (child and working), housing benefit and budgeting loans.

However: “Poor control and decision-making undermined confidence in the programme and contributed to a lack of progress,” the report states. This is directly attributable to the Secretary of State – it is his failure.

The report – and we should remember that this is from an organisation concerned with whether the government is spending our money wisely – concluded that the DWP has not achieved value for money.

The department was over-ambitious in both the timetable and scope of the programme, the report states. This is interesting in itself. How can its scope be “ambitious” if nobody even knew how it was supposed to work?

According to the NAO: “The Department took risks to try to meet the short timescale and used a new project management approach which it had never before used on a programme of this size and complexity. It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility.” In other words, from its employees right up to its ministers and Secretary of State, the DWP could not justify the risks it took with taxpayers’ money and never bothered to investigate the likelihood of failure.

“Given the tight timescale, unfamiliar project management approach and lack of a detailed plan, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress.”

The report singles out for particularly strong criticism the computer system intended to run the new benefit. “The Department is not yet able to assess the value of the systems it spent over £300 million to develop… Over 70 per cent of the £425 million spent to date has been on IT systems,” it states.

Then it says, “The Department, however, has already written off £34 million of its new IT systems and does not yet know if they will support national roll-out.” So the systems are not – to use a favourite DWP phrase – “fit for work”.

In fact, some parts don’t work on any level at all: “For instance, the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments.” Meaning: In the single Job Centre where UC has been introduced, employees have been working out claims on paper.

“Such checks will not be feasible or adequate once the system is running nationally.” It seems amazing, but Iain Duncan Smith probably needed to see that, written down in black and white, or he might never have considered the possibility.

Problems with the IT system have delayed the national roll-out of the programme (and for that, considering all of the above, we should all breathe a long-drawn-out sigh of relief). “In early 2013, the Department was forced to stop work on its plans for national roll-out and reassess its options for the future… The Department will not introduce Universal Credit for all new claims nationally in October 2013 as planned, and is now reconsidering its plans for full roll-out.

“Instead, it will extend the pilots to six more sites with these new sites taking on only the simplest claims. Delays to the roll-out will reduce the expected benefits of reform and – if the Department maintains a 2017 completion date – increase risks by requiring the rapid migration of a large volume of claimants.”

The DWP intends to spend £2.4 billion on Universal Credit up to April 2023. To put that in perspective, that’s twice as much as the government loses on all benefit fraud – not just those being bundled together here – every year. And this will “increase risks”.

The spending watchdog found that the DWP took some action at the end of 2012 to resolve problems, but was unable to address the underlying issues effectively.

“The programme suffered from weak management, ineffective control and poor governance,” said Amyas Morse, head of the National Audit Office.

Despite all this, the report incredibly states that “the programme still has potential to create significant benefits for society, but the Department must scale back its delivery ambition and set out realistic plans”.

Liam Byrne will no doubt seize this as an opportunity, yet again, to offer Labour’s help to find a way forward and bring Universal Credit back on track. He should be discouraged from doing so. This ‘flagship’ hasn’t so much sailed as sunk.

Universal Credit is a FAILURE.

It should be SCRAPPED – before that idiot Smith wastes any more of our money on it.

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Will the government’s benefit raid turn us all into April Fools?

15 Friday Mar 2013

Posted by Mike Sivier in Benefits, Conservative Party, Disability, Economy, Justice, Law, Liberal Democrats, pensions, People, Politics, Powys, Tax, tax credits, UK, unemployment

≈ 16 Comments

Tags

adoption, bedroom tax, benefit, benefit cap, benefits, bureau, carers allowance, charge, child, Child Benefit, Citizens Advice, clinical negligence, Coalition, Conservative, debt, Department for Work and Pensions, disability, Disability Living Allowance, disabled, divorce, DLA, DWP, economy, employment, Employment and Support Allowance, ESA, family, government, health, housing, Iain Duncan Smith, Incapacity Benefit, Income Support, independent living fund, Jobseeker's Allowance, legal aid, Liberal, Liberal Democrat, local housing allowance, maternity, Mike Sivier, mikesivier, Parliament, paternity, pay, people, Personal Independence Payment, PIP, politics, poverty, sick, social security, spare room subsidy, state, tax, tax credits, Tories, Tory, underoccupation, unemployment, Universal Credit, Vox Political, welfare, working


ripwelfarestate
Why is the cumulative effect of the government’s raid on benefits and other public services continuing to be ignored by the public at large?

Are people deliberately sticking their heads in the sand, perhaps in the hope that, if they avoid it long enough, it’ll go away?

That’s not going to happen.

Here’s an analysis of what’s happening, compiled by Vox Political for a local Mid Wales organisation. It makes sobering reading.

THE HEADLINE FIGURES

Working-age benefits including Jobseekers’ Allowance, Employment and Support Allowance and Income Support

One per cent rise in each of the next three years, from April 2013.

Child Benefit

Frozen until April 2014. Will rise by one per cent in each of the following two years.

Maternity, Paternity and Adoption Pay

One per cent rise in each of the next three years.

Carers’ Allowance and Disability Benefits (other than ESA)

Rise in line with inflation (2.2 per cent in April)

Child Tax Credits and Working Tax Credits

Rise by one per cent for the next three years, from April 2013. Basic and 30-hour elements – uprating will not apply until 2014.

Local Housing Allowance

Capped at a one per cent rise for two years from April 2014

The one per cent cap in those benefits that are affected will take £3.7 million out of the UK economy over the next three years.

THE BENEFIT CAP

A limit will be put on the total amount of benefit that most people aged 16 to 64 can get. This is called a ‘benefit cap’. Local councils will be introducing this between 15 April and 30 September 2013.

This affects: Carer’s Allowance, Child Benefit, Child Tax Credit, Employment and Support Allowance (barring support group), Housing Benefit, Incapacity Benefit, Income Support, Jobseekers’ Allowance, Maternity Allowance, Severe Disablement Allowance, Widowed Parent’s Allowance (also Widowed Mother’s Allowance or Widows Pension if receipt began before April 9, 2001), Bereavement Allowance, Guardian’s Allowance.

The expected level is £500 per week for couples and lone parents – equivalent to £26,000 per year (net); and £350 per week for single adults.

Across the UK, 56,000 households will be affected by the benefits cap, including 1,680 in Wales. Job Centres have already notified those who will be affected; they do not include “a vast amount” in Powys.

LEGAL AID

Legal aid in civil cases is cut by £350 million, meaning people who need qualified advice on social welfare debt, benefits, employment, family problems, clinical negligence, divorce and housing problems will not get it. Those people may have to pursue the cases on their own behalf, clogging up the civil justice system, perhaps for years to come.

More than 500,000 people in need of advice will be denied the help and justice they need.

INDEPENDENT LIVING FUND

The Government has closed this to new applications, and plans to permanently close the scheme from 2015. the ILF provides money to help disabled people live an independent life in the community rather than in residential care.

Disabled people could be forced out of independent living arrangements and into residential care, or trapped at home by the fund’s closure.

This will take £320 million out of the national economy.

NEW BENEFIT – THE PERSONAL INDEPENDENCE PAYMENT

On April 8, 2013, the Personal Independence Payment replaces Disability Living Allowance. PIP will maintain links to passported benefits where possible, and there are special rules for claimants who are terminally ill.

The differences are that claimants must have still have their problem nine months after they apply; and there will be planned interventions and an early reconsideration process.

It is being rolled out gradually and will not affect new claimants in Wales until June. From October, claimants on fixed period awards that are coming up for renewal will be reassessed, along with young people coming up to age 16, and indefinite awards with a change of circumstances. Nobody else will be reassessed until October 2015.

There is no PIP claim form available from the usual sources. Claims are to be made by telephone on an 0800 number, when claimants will be asked general questions – including their bank details. Then a form will be posted to the claimant. It will be individually-addressed and bar-coded with the claimant’s details.

This ‘Digital By Default’ idea creates problems, especially in rural areas. Access to broadband internet is still an issue in places, and capability to use the internet is just as much an issue. People who might have access to broadband may still need help going through the claiming process.

For those with fluctuating conditions, the form will provide an opportunity to explain them.

Claimants can have help completing the form, and reports from health professionals such as occupational therapists and doctors may be added to it.

The form will go to a health professional working for the company Capita (in Wales; other parts of the UK have Atos). They may decide a claimant’s entitlement straight away, but most will be asked to attend a face-to-face interview. It is possible that this company may carry out home visits if the need presents itself.

Attendance with a friend, relative, partner, health professional or similar is encouraged.

All evidence will be reviewed and a report will be sent to the Department for Work and Pensions to make a decision.

The health professional will not make any recommendations at all – a DWP case manager will review the evidence and make a decision.

If a claim is disallowed or reduced, they will phone on three separate dates, at three separate times, to explain the decision. There are concerns that claimants with particular issues such as mental health problems might not understand.

Finally, as part of an ongoing process, questions and replies about PIP will be posted on the Frequently Asked Questions (FAQ) page of the DWP’s PIP website, www.dwp.gov.uk/pip

If people are receiving low-rate care component Disability Living Allowance, we believe it is unlikely that they will get Personal Independence Payment.

The www.parliament.uk website itself makes it clear that “A key aim of the new benefit is to deliver savings of over £1 billion a year by 2014-15, rising to £1.5 billion a year by 2016-17.”

HOUSING BENEFIT – THE BEDROOM TAX

This affects:

People who are working but on low pay, who must therefore claim housing benefit in order to keep a roof over their heads. This means it applies to 93 per cent of people who have claimed housing benefit since the Coalition government came to power.

Separated parents who share the care of their children and who may have been allocated an extra bedroom to reflect this. Benefit rules mean that there must be a designated ‘main carer’ for children (who receives the extra benefit). This is likely to cause friction within these former-family groups.

Couples who use their ‘spare’ bedroom when recovering from an illness or operation.

Parents whose children visit but are not part of the household – but households where there is a room kept for a student studying away from home will not be deemed to be under-occupying if the student is away for less than 52 weeks (under housing benefit) or six months (under Universal Credit). Students are exempt from non-dependant deductions, but full-time students will not be exempt from the Housing Cost Contribution (HCC) which replaces non-dependent deductions under Universal Credit. Students over 21 will face a contribution in the region of £15 per week. Are you confused yet?

Families with disabled children; and

Disabled people, including those living in adapted or specially designed properties (this could mean these people will be required to leave that home for another one, with the added expense of having to re-install all the special adaptations).

The government has withdrawn, under pressure, the application to Foster carers. The original rationale was that foster children were not counted as part of the household for benefit purposes.

It has also withdrawn the application to families of young people serving away from home in the armed forces.

Pensioners will not be affected. The government has clarified that couples in which one member is of pensionable age will both be exempt from the Bedroom Tax. But couples of mixed age claiming for the first time under Universal Credit (after it is introduced – possibly in October this year – will have to wait until both are of pensionable age before being exempted from the charge).

Housing benefit will be restricted to allow for one bedroom for each person or couple living as part of the household. However:

Children under 16, who are either both boys or both girls, will be expected to share. This will undoubtedly create many family feuds as puberty is not known for its calming effect on young people.

Children under 10 will be expected to share, regardless of gender. Again, this will create problems for families. It is not a normal situation and it seems bizarre for the government to suggest that it should be.

On the ‘plus’ side, a disabled tenant or partner who needs a non-resident overnight carer will be allowed an extra bedroom for that carer.   If you have a ‘spare’ bedroom under the new rules, you will lose 14 per cent of your housing benefit; for two or more extra bedrooms, you’ll lose a quarter of your benefit. According to the government’s impact assessment, this means 660,000 people will lose an average of £14 per week (£16 for housing association tenants).

Now for the complications.

After Universal Credit is brought in, if only one member of a couple is over pension age, the bedroom tax will apply to the household. If one is receiving Pension Credit, they will be unaffected.

There are currently six different rates of ‘non-dependent deductions’ – amounts removed from housing benefit according to the earnings of people aged over 18 who live in a household but are not dependent on the tenant for financial support. This will become one flat-rate ‘housing cost contribution’ that will be deducted from housing benefit. It will not apply to anyone aged under 21.

Under UC, each adult non-dependent will get their own room, but each must pay the full, flat-rate housing cost contribution – unless aged under 21 and therefore exempt.

Under UC, lodgers will not get a room allowance but any income is disregarded. They will not count as occupying a room under size criteria rules. Currently any income is taken into account and deducted pound for pound from benefit, apart from the first £20. As this income is completely disregarded under UC, my best guess is that the government expects this amount to cover any loss in both housing benefit and Universal Credit. I have a doubt about that. Taking in a lodger will also affect home contents insurance policies, potentially invalidating them or raising the premiums.

Bedroom tax will not apply in joint tenancy cases.

Until UC comes in, benefits will be protected for up to 52 weeks after death; afterwards the run-on will be three months.

And until UC comes in, tenants will receive 13 weeks’ protection where they could previously afford the rent and housing benefit has not been claimed in the previous year; afterwards, the size criteria will apply immediately.   Pre-1989 tenancies are not exempt from the bedroom tax.

Disabled children are not exempt, even though David Cameron wrongly claimed they were.

If you’re on a low income, aged over 40 with children who have left home, or disabled, you could be not only slightly but severely and unfairly affected. It seems likely you will have to choose to either pay the extra amount, or move. Surveys say around a third of tenants will try to move, mainly to one-bedroom properties. This is far more than the government has anticipated in its planning.

There is a national shortage of one bedroom council and housing association homes, meaning many tenants will have no choice but to move into the more expensive private sector or stay put – even though they will not be able to afford the extra costs.

The majority will stay put, but nearly eight-tenths (80 per cent) of those are worried about going into debt, with two-fifths (40 per cent) fearing they will accumulate rent arrears.

The evidence shows that, whether you move or stay put, landlords will lose income which evictions and homelessness will increase. A trial of the benefit changes in Torfaen saw rent arrears rise SEVEN-fold to £140,000 over seven months. This was a trial of Universal Credit, of which Housing Benefit will be a part. From this we can conclude that Universal Credit will create more problems, possibly much worse than what we are facing now.

I am glad to report that the plan to withdraw Housing Benefit from claimants aged under 25 has been withdrawn. But anyone under 35 will be entitled to only the shared accommodation rate of housing benefit.

There will be an impact on family relationships – people will be forced to move into properties together. Young people under 35 who can’t live independently because the shared accommodation route won’t let them do that. People are being forced into ‘pressure-cooker’ situations.

People will have to move their home because of the bedroom tax. That will have an impact – not just on individuals, but on education if a child has to move away from a school where they have friends, to a new area.

The government claims the bedroom tax will save £480 million, affecting £660,000 homes who will have to pay at least £700 per year each. But this is only if families refuse to – or are unable to – move to what the government calls suitable accommodation. There is no chance of this happening because the government has not allowed such accommodation to be built; therefore we may see it as a trap, from which to plunder millions from the poor.

THE WIDER IMPLICATIONS

There will be a rise in rent and mortgage arrears.

There will be generally less income – less money available. That’s also for people owning local businesses as benefit income is spent locally and High Street shops will receive less.

There is a huge risk that more and more people will access ‘lenders without conscience’. Responsible lenders, such as credit unions, are fantastic places to put money, but the services provided are different, depending on the union. They will see more and more people coming to them. That will impact on their business model and the risks will be greater.

An increased demand for advice – for example from the Citizens Advice Bureau – is already happening. The figures will ramp up significantly over the next 12 months and beyond. Funding is decreasing.

There will be a big impact on social landlords and the housing market – the availability of affordable housing and landlords’ ability and willingness to rent to tenants on benefits.

Pressure on the appeal system means people waiting longer for the outcome of appeals.

There will be pressure on public sector resources – local authorities will bear the brunt of this, at a time when they have received difficult financial settlements.

The fund for Discretionary Housing Payments is increasing, though – but not by enough. These payments may help people top-up to pay accommodation costs. Given the effects of the reforms, people will also be looking for these payments and in those circumstances, the budget won’t touch the sides of what’s needed.

And the cumulative impact on child poverty will be huge, with an extra 200,000 children falling below the poverty line.

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Life and death issues – Labour’s living wage v another Tory weapons junket

05 Monday Nov 2012

Posted by Mike Sivier in Business, Conservative Party, Economy, People, Politics, Powys, UK, War

≈ 2 Comments

Tags

aeroplane, Arab, avoidance, benefit, benefits, Coalition, Conservative, Conservative Party, David Cameron, Downing Street, economy, Ed Miliband, evasion, fighter, G7, government, human, India, Iraq, Israel, jet, Labour, Labour Party, living wage, Mark Thatcher, Middle East, Mike Sivier, mikesivier, Parliament, people, plane, politics, Powys County Council, Prime Minister, Revenue, rights, tax, tax credits, Tories, Tory, Typhoon, Vox Political


We’re all about the money: David Cameron is in the Middle East, hawking our jet fighters to foreign powers.

It’s a matter of priorities.

On the left hand, we have the Labour Party, campaigning strongly for the so-called “living wage” – an earnings level for British workers that will provide enough for them to look after their families, heat their homes, feed their kids, care for their elderly relatives and plan for the future (as Ed Miliband was set to say at a speech today).

On the right hand, we have Conservative leader (and comedy Prime Minister) David Cameron, off on a junket to the Middle East in a bid to sell Typhoon fighter jets to Arab nations.

… Because that always works well for us, doesn’t it? (/sarcasm)

Conservatives have been selling weapons to foreign countries for decades. We know that 16 British firms were listed as having supplied arms to Iraq (the information is in a 12,000-page dossier the Iraqis kindly supplied to the UN in 2003). It has been alleged that one of the arms dealers involved in those sales was Mark Thatcher, son of the former Conservative Prime Minister. It’s a certainty that these companies were making their sales while the Conservatives were in power during the 1980s and 1990s, and probably benefited from Conservative government trade missions.

Perceptive readers will, at this point, assert that Labour governments have also sold to foreign powers, and this is true. I have been able to find evidence of sales to India and to Israel during Tony Blair’s controversial premiership.

It’s a very murky subject and nobody in British politics can say their hands are clean.

The best I can suggest is that Labour didn’t sell arms to anyone who was likely to use them on British citizens. The Conservatives were indiscriminate (and we know – or at least have good reason to believe – that arms sold to Iraq were indeed used against British soldiers).

Cameron himself has already earned adverse media coverage for selling arms to countries with questionable human rights records – in other words, those that might use those weapons on their own citizens. He has tried to talk these claims down –

– but it is telling that he has made damn sure there will be minimal media coverage of this trip. Downing Street has spent two years trying to restrict media access to the PM’s overseas visits, making him the only G7 leader who is not accompanied abroad by a full press corps. The preferred total is just one broadcaster (presumably, one who has been specially selected by Downing Street and who is, therefore “one of us”).

The deals Cameron hopes to make are said to be worth more than £6 billion to the UK. However, considering this government’s miserable record in tackling tax evasion and avoidance, one wonders how much of that will make it into the Treasury.

Contrast this secrecy with the full-on publicity campaign for the living wage, under way courtesy of Ed Miliband and the Labour Party, here in Blighty. The living wage is £7.45 per hour (outside London; £8.30 within the capital) – only a little more than £1 above the minimum wage, but it could make a big difference to workers across the country.

For every £1 spent in the private sector on getting workers up to the living wage, around 50 pence of that would come back to the government in savings on tax credits and benefits, and in higher tax revenue. In other words, it would help pay off the national deficit and debt.

“The living wage isn’t an idea that came from politicians,” says Mr Miliband in his speech today. “Or from academics in thinktanks.

“It came from working people themselves. People who recognised that they were giving their all for organisations that could afford to pay just a little bit more to give dignity to them, but who weren’t doing so. People who recognised that their firms might be more likely to succeed if they did.

“Our economy is not working for working people but just for a few at the top – a few taking ever-more of a share of the national cake, while other people struggle more and more to make ends meet.

Mr Cameron’s arms junket is living proof of the truth of those words.

Postscript: In his speech, Mr Miliband lists Labour councils that have introduced the living wage. I’m happy to add that Powys County Council, although independently-run, has pledged to research the possibility of introducing the living wage at the earliest opportunity.

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A tale of two plans

08 Saturday Sep 2012

Posted by Mike Sivier in Business, Conservative Party, Economy, Labour Party, People, Politics, Tax, UK

≈ 1 Comment

Tags

'Pre-distribution', benefit, benefits, borrow, borrowing, cabinet, Coalition, Conservative, conservatories, conservatory, credit crisis, debt, economic, economy, Ed Miliband, employee, employer, extension, fiscal austerity, government, inflation, Jacob Hacker, Labour, living wage, loan shark, low-wage, make work pay, Mike Sivier, mikesivier, minimum wage, Parliament, people, planning permission, politics, poverty, productivity, redistribute, reshuffle, skill, skills, staff, tax, tax credits, taxes, Tories, Tory, VAT, Vox Political, wages, wealth, workforce


This person is building a conservatory. Are the Tories seriously suggesting that he is helping solve the financial crisis?

Both the Labour Party and the Conservatives have unveiled new plans to revive the UK economy, in the wake of last week’s deeply unimpressive Cabinet reshuffle. Let’s take a look at them.

Labour is offering us the impressively-titled ‘Pre-distribution’ – a system which asks employers to pay their staff more money in wages, in order to eliminate the need for the government to take higher taxes and then redistribute the wealth, thereby lessening the huge differences between the benefits enjoyed by the very wealthy and the privations suffered by the very poor.

Labour leader Ed Miliband, announcing the policy, called for firms to be responsible in their attitude to wages, and to focus on the long-term.

He said it would require a major shift in philosophy for the Labour Party, as many redistribution options – for example, increasing tax credits – will not be possible when Labour next returns to power, although redistribution of tax wealth will always be necessary.

He said pre-distribution – a term he has taken from US economist Jacob Hacker – is about lifting the UK away from being a low-wage economy, because this has made us unable to pay our way in the world. We must have higher wages – and therefore our workforce needs higher skills.

In fact, this is just an impressive title for something Labour has already spent a considerable period supporting – the ‘Living Wage’. The idea is that, while the minimum wage went some way towards lifting people out of poverty, it did not finish the job.

Consider workers who do 29 hours a week on minimum wage. They do not qualify for tax credits and the amount they earn may not cover their outgoings. How do they survive?

Under the current government, the only choice is to borrow, if they don’t have savings. So they go to richer family members and ask for a handout (a humiliating experience, made worse if a person is working full-time) or, much worse, they go to loan sharks.

Recent reports have indicated that people working full-time – 37 or more hours a week – are still not earning enough to cover their overheads and are having to do the same.

The current system therefore makes it possible for people to get into phenomenal amounts of debt, and we know that debt is what caused the global credit crisis of 2008. As more and more people go overdrawn, banks will fall into trouble. The amounts might not be as much – individually – but cumulatively they become a problem.

Also, consider the working atmosphere created by the current attitude to wages. Employers have enjoyed wage increases that have multiplied their earnings by – what is it – eight and a half times over the last 30 years. Employees have seen theirs rise by something like 27 per cent – less than the rate of inflation. Therefore their earnings have dropped in real terms, and that’s why we see the problems I have outlined above.

As a result of this, workers become demoralised. What’s the point of going to work for a business where the bosses make out like bandits and the people who actually create the wealth are treated like dirt? As a result, productivity slumps. Of course it does. Where’s the incentive to produce high-quality work at high speed? This leads to a drop in sales as orders fall off due to dissatisfaction. If the trend continues, the company fails. I have seen this happen to a major employer in the town where I live. It has been forced to remodel itself, cutting back and back, but still fell into receivership and may now be under its second new owner within 10 years. The problem for managers is they never decide to cut back on the source of the problem – poor managers who take too much of the profit; they always cut down the workforce, reducing their chance of profitability still further.

This is also what happened with my last employer – a newspaper company that is struggling because it is top-heavy. I left because bosses ignore my advice and went ahead with a plan that I knew would harm sales of the edition where I worked. Sure enough, within a few months it had merged with another edition. The solution from management? Cut down on anything other than management. Ridiculous.

And, by the way, British industrialists: A saving is not a profit. If you cut back one year in order to keep your head above water, what do you do when it doesn’t carry over into the next?

Labour’s alternative would pay workers enough money to have something left over, after they have covered their costs. They will have spending power. This means they will be able to buy more, invest more – they will have breathing space, and a sense of personal worth. From that will come a sense of pride in their work and a feeling that they are valued by their bosses. Productivity improves, as does the quality of the product. Orders increase. The company flourishes and is able to employ more workers. The cycle of growth then repeats itself.

Isn’t that better?

The plan also shows up the Conservatives’ lie that cutting benefits will ‘make work pay’. Forcing people off of a benefit system that doesn’t pay their costs and into a job that doesn’t pay their costs is no solution at all and any Tory who spouts this nonsense in the media is to be mocked and targeted for unseating at the next election (in my opinion).

In contrast, the Conservatives have announced that home owners will be allowed to build large conservatories and extensions without needing planning permission. The Tories hope a home improvements boom will stimulate the economy.

Don’t laugh; they’re serious.

They haven’t realised that this will only benefit those who, firstly, own their houses; secondly, have enough spare cash to pay for what has been described as a “large” extension to their dwelling and; thirdly, want one. Apparently there are around 200,000 applications a year – that’s a drop in the ocean when you live in a country of more than 60 million.

The relaxation of planning rules will only last until 2015, because the Tories want to persuade homeowners to get on and build these extensions as soon as possible – again, failing to realise that we are in the middle of a time of fiscal austerity, which they are enforcing, and we simply don’t have the cash.

Therefore, the solution proposed by the government is for private individuals to borrow more, in order to fund the scheme and pay the builders. Isn’t that what the Tories have been mocking Labour for proposing on a national level – even though Labour isn’t currently proposing that?

Also, what about the 20 per cent VAT that goes on home improvements?

And what about the increased aggro between neighbours, as our quiet leafy suburbs get turned back into construction sites?

So the choice seems to be: Pay workers more, see increased long-term productivity and less concern over debt; or get homeowners to put themselves in debt by borrowing to pay for home improvements they probably don’t need and create a short-term boost in the construction industry.

Which one gets your vote?

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