Wednesday, 29 August 2012

Welfare Mythbuster

Massive hat tip to Red Peppers here. They've compiled this handy mythbuster to tackle various myths about welfare which I'm reposting here - in particular I think the first three myths make for very interesting reading.

Welfare reform is almost inevitably contentious. Answering the question of who should receive how much financial support relies on often competing conceptions of fairness, with rival views about who needs, and who deserves, our help, not to mention the most just and efficient way of providing it. These issues are worth debating – but the current debate is being conducted on shoddy terms. Myths and stereotypes abound. These serve not only to unfairly stigmatise claimants, but to obscure the questions we might want to answer about how best the state can provide support to people who need it. 

Myth: There is a major problem of ‘families where generations have never worked’ 

Reality: The academics Paul Gregg and Lindsay MacMillan looked at the Labour Force Survey, the large-scale survey of households from which we get most of our statistics about who’s in work. In households with two or more generations of working age, there were only 0.3 per cent where neither generation had ever worked. In a third of these, the member of the younger generation had been out of work for less than a year. 

When they looked at longer-term data, they found that only 1 per cent of sons in the families they tracked had never worked by the time they were 29. What’s more, while sons whose fathers had experienced unemployment were more likely to be unemployed, this only applied where there were few jobs in the local labour market. So ‘inter-generational worklessness’ is much more likely to be explained by a lack of jobs than a lack of a ‘work ethic’. 

Myth: Most benefits spending goes to unemployed people of working age 

Reality: The largest element of social security expenditure (42 per cent) goes to pensioners. Housing benefit accounts for 20 per cent per cent (and about one fifth of these claimants are in work); 15 per cent goes on children, through child benefit and child tax credit; 8 per cent on disability living allowance, which helps disabled people (both in and out of work) with extra costs; 4 per cent on employment and support allowance to those who cannot work due to sickness or disability; 4 per cent on income support, mainly for single parents, carers and some disabled people; 3 per cent on jobseeker’s allowance; and 2 per cent on carer’s allowance and maternity pay, leaving 3 per cent on other benefits. 

Myth: Benefit fraud is high and increasing 

Reality: The latest Department for Work and Pensions estimates show that in 2011/12 just 0.7 per cent of benefit expenditure was overpaid due to fraud, including a 2.8 per cent fraud rate for jobseeker’s allowance and a mere 0.3 per cent for incapacity benefits. Even if we put together fraud with ‘customer error’ – people who are not entitled to benefits but not deliberately defrauding the state – the rate of false claims is 3.4 per cent for JSA and 1.2 per cent for incapacity benefit. 

The claim that benefit fraud is increasing is similarly false. Because there have been changes in how fraud has been calculated over time, we have to look at combined fraud and ‘customer error’ for JSA and income support. This declined from 9.4 per cent to 4.8 per cent of spending from 1997/98 to 2004/05, and has since stayed roughly flat. 

Myth: Couples on benefits are better off if they split up 

Reality: This one has recently been comprehensively disproved by research from the Joseph Rowntree Foundation, who concluded: ‘The simplest question that can be asked in testing the couple penalty is: does the benefits system provide a different proportion of a family’s daily living needs if they live together and if they live apart? The clear answer from the calculations in this paper is no. The benefits system provides very similar living standards to families living together and apart.’ 

Research in 2009 for the Department for Work and Pensions looked at whether different benefit systems had any impact on people’s decisions about whether to stay together or not. They concluded that ‘on balance, the reviewed literature shows that there is no consistent and robust evidence to support claims that the welfare system has a significant impact upon family structure’. 

Myth: The welfare bill has ballooned out of control 

Reality: The government has repeatedly claimed that welfare expenditure grew unsustainably under Labour. In fact, total expenditure on welfare was 11.6 per cent of GDP in 1996/97; under Labour it averaged 10.7 per cent up to the crash. Afterwards benefits for children and working age adults rose from an average 4.9 per cent of GDP up to 2007/08 to 6 per cent. This is what you would expect during a recession. 

Myth: Most benefit claims are long term 

Reality: The government persistently frames benefit claimants as ‘languishing in dependency’. So how much of the benefit caseload is long-term? It depends whether you count people at a single point in time or look at people moving on and off benefits over a period. The numbers paint a completely different picture. For example, in 2008, some 75 per cent of incapacity benefit claimants had been receiving the benefit for more than five years, and only 13 per cent for less than one year. But over the period 2003–8, only 37 per cent were long-term while 38 per cent were on benefit for less than a year. So if you count claimants at just one point in time, as government tends to do, you will overestimate how much of the caseload is long-term – and underestimate how many people move on and off benefits over time. 

Myth: Social security benefits are too generous 

Reality: Out of work benefit levels fall well below income standards based on detailed research into what ordinary people think should go into a minimum household budget. Research by the Joseph Rowntree Foundation found that while pensioners do in fact receive 100 per cent of what people think they need, a single adult of working age receives 40 per cent of the weekly minimum income standard and a couple with two children receives 62 per cent of the weekly minimum. 

Myth: Most people who claim disability benefits could be working 

Reality: There are two main kinds of disability benefits: disability living allowance (to cover the extra costs of disability) and employment and support allowance (income replacement for those not in employment). The most basic misunderstanding is that the latter is only for people who are ‘completely incapable of work’. The welfare reformer Sidney Webb commented in 1914 – in the midst of one of many previous panics about ‘true disability’ – that the only people who could do no work at all were ‘literally unconscious or asleep’. The question is whether suitable jobs exist, and whether these people would be able to get them. 

Once we understand this, three problems face us. First, just because we’re living longer doesn’t mean we’re in better health; improved medical care means that many people born with impairments or suffering traumatic injuries are able to live longer. Second, jobs are in some ways worse than in the early 1990s: people have to work harder and have less control over their job, which makes it more difficult for people with health problems to stay in work. And while we now have anti-discrimination legislation, this only forces employers to make ‘reasonable’ adjustments; the evidence not only suggests these are often limited, but that employers are less willing to employ disabled people as a result. 

Finally, many of the people claiming incapacity benefits are people with low employability in areas of few jobs. These are the very employers that are less likely to make adjustments. Some people end up in a situation where they are not fit enough to do the jobs they can get, but can’t get the jobs they can do. 

Completely incapable of work? Not necessarily. Penalised for their disability by a labour market that has no place for them? Definitely. 


  1. Oh i wish this was just a nightmare and I wish i could be wrong
    If this is true (below link) then 99.9% of disabled people will be thrown to the wolves

    And they read nothing like the ones above :-(

    I pray this is just a nightmare and I can wake up and for it to not be so inhumane. tho with cameron at the helm - it dont feel like a dream!

  2. BBC Question Time 28th june 2012

    Paddy Ashdown (in response to a question from Julie Searle (sp?)? "Why should me and my partner continue working, paying taxes, struggling on a tight budget when those on benefits do nothing and get paid a lot more?"):

    "Let me see if I can give, if I may, some historical background to this... the welfare system was set up after the beveridge report in 1945/46.
    It was something which, I think, was a most magnificent and remarkable achievement to do. It gave poor people, the disadvantaged and the hopeless real chances in our society. Now I accept Julie's point completely that that great system , by the way built on the principle I want to come back to - giving people a hand UP rather than a handout- has degenerated. It's got tangled. It's got out of sync with both society and the view expressed here ... that people shouldn't be getting something for nothing. It shouldnt be a lifestyle... is one that I think is shared across all political parties.. certainly my party - I know the tories do and i know labour does as well.

    Government after government since I've been in politics 20 years and more - nearly 30 now - have said we will reform the system, we will make a fundamental change to this. We''ll live up to the principles of beveridge but we'll do it a new way - all of them have ducked it (dimbleby interrupts sorry have ducked it or failed? )...have ducked the challenge - they've fiddled at with the edges, they've ducked the central challenge.

    (There is then some interplay between Dimbleby and Ashdown about making the point in timely fashion and Ashdown then continues...)
    Now I'm actually proud. I am proud that this government has begun to try genuinely to tackle that.. some of the ideas coming forward from Ian Duncan smith and my good colleague Steve Webb, I think... Universal Credit for instance.. are a genuine attempt to move us back to this and one of the reasons it has been slowed up by the way is because it has been consistently opposed by Labour in the House of Commons.

    But i think there is a radical change coming.. Now when you change from this system to that system, there are some uncomfortable moments along the way and individuals are going to get caught out but I'm very, very clear that the propositions put forward by this government now will fundamentally change this system in exactly the direction you want and everyone else here has sought as well...."

    1. How do you say that attacking the disabled will change the system in a good way? Yes if you can work work, but WHO will actually employ most of these people who have such terrible disabilities? Remploy might have - But thats shutting now. So who (in this world of health and safetyisms) Will employ someone who keeps falling over, takes so much time off sick cos they ARE sick? And if a 100% healthy person cannot get a job when they look for years - Who is gonna jump up and take an unhealthy burden on?

      Apparently UC is failing already in just the testers.

      I can see your points but I fail to see who is going to employ someone who has so many disabilities and would become a burden to a company who wanna make money not lose it, and the big bucks is whatmatters in this money led world these days.

      Sad but true. Also Cameron said abotu snippets of time or something like that that people who could only work for 1hr say would be aided to - Nobody gonna employ someone for 1hr a day or a week.
      Just amkes no sense to attack the weakest and LIE about the fraud in it. When they know damned well nobody would employ them anyways.

  3. Excellent, thank you.

    Can I use it, please?

    1. Sure - please remember to credit Red Pepper for writing the mythbuster though.

  4. Yes Of course... thanks...


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