This article was written by Tom Clark, for The Guardian on Tuesday 4th November 2014
The occupational pensions of MPs, ministers and the prime minister could be classified as welfare spending in the tax transparency statements that George Osborne has promised every taxpayer.
Her Majesty’s Revenue and Customs is writing to millions of tax-paying households with detailed figures on how the government spends their income tax and National Insurance contributions. Welfare is recorded collectively as the single largest expenditure, consuming nearly one pound in every four.
This presentation has been criticised as a politically motivated departure from Treasury officials’ original plan to break down social security into the components paid to different parts of the population, such as elderly, disabled and unemployed people.
By revealing that payments specifically earmarked for the unemployed, for example, represented only 3% of the total, this approach may have set back Osborne’s case for a fresh £12bn in benefit cuts.
Now experts are drawing attention not only to the lack of differentiation in the welfare chunk of spending but also to the inclusion of substantial elements of spending that would not normally be considered welfare at all, notably personal social services and public sector pensions. Even ministerial pensions are likely to be covered.
The Treasury said: “The headings in our tax summaries are based on internationally recognised (UN) definitions.” But in a briefing note published on Tuesday, the Institute for Fiscal Studies detailed how the welfare total included £28.5bn on “personal social services”.
“This is a number that in many analyses one would want to report separately from other welfare spending,” the IFS said. “Unlike other elements of ‘social protection’ it is not a cash transfer payment and in many ways has more in common with spending on health than spending on social security benefits.
“Another £20bn of the spending counted under welfare is pensions to older people other than state pensions. That includes spending on public sector pensions – to retired nurses, soldiers and so on. This is not spending that would normally be classed as welfare.”
Declan Gaffney, a social security researcher, said the inclusion of public sector pensions was bizarre.
“The Treasury needs to clarify exactly how it arrived at these figures, and publish the workings – spelling out exactly whose pensions it included. Does it, for example, include MPs and the prime minister himself?”
Gaffney has used IFS tables to calculate a more conventional figure for total welfare less state pension expenditure, and concludes that the government’s choice of definition inflates the published welfare spending total by around 40%.
The Treasury did not respond to a question about whether the pensions of MPs, ministers and the prime minister would be classified as welfare.
A spokesman for PCS, the civil service union, said:
“Tens of thousands of civil servants work hard to deliver social security support and they know how important and necessary it is. For their pensions to be hijacked as part of the government’s latest political attack on our welfare state is absolutely disgusting and it exposes just how far ministers will go to poison the well of public opinion.”
Source – Welfare Weekly, 04 Nov 2014
The Welfare Reform Committee in Holyrood has accused the UK Government of being “in denial” over the link between welfare reforms and increasing demand on food banks.
Committee members visited a number of food banks across Scotland and took written evidence from providers including Trussell Trust, Oxfam Scotland and the British Red Cross, as part of an inquiry into the supposed link between benefit changes and food bank usage.
The committee also commissioned research from the Heriot Watt University in Edinburgh.
The committee raised concerned that the increased use of benefit sanctions against some of the poorest sections of society is behind the startling rise in food bank usage.
In the year leading up to September 2013, official Government figures show that nearly 900,000 Jobseeker’s Allowance (JSA) claimants had their benefit payments cut or stopped completely – the highest figure since JSA was introduced.
22,840 sick and disabled people in receipt of Employment and Support Allowance (ESA) were also sanctioned during this period.
This, in part, has led to MSPs arguing that it is “insulting to suggest” that there is “no robust evidence linking food bank usage to welfare reform”, as suggested by Tory employment minister Esther McVey in a letter to the Scottish Government.
McVey recently postponed a meeting with the committee to discuss the impact of welfare reform in Scotland. This resulted in Labour MSP Ken Macintosh accusing the UK Government of deliberately trying to “avoid answering questions” about the “significant and negative impact the welfare changes have had on some of our most vulnerable”.
Scottish Labour MSP and convener of the committee, Michael McMahon said:
“The UK Government can no longer ignore the evidence that their welfare reforms are having a real impact on people’s ability to feed themselves.
“There can be no place for this in a modern, prosperous nation, just as there should be no need for food banks.
“Our evidence showed some low paid workers need to access food banks.
“This makes it even more insulting for them to insist that people using food banks are anything other than in desperate need of help. Help the welfare system should be providing, not charities.
“Allowing this Dickensian model of welfare to take root is simply unacceptable. Ignoring the problem cannot be part of the solution.”
The committee’s Deputy convener and SNP MSP Jamie Hepburn, said:
“All our committee members visited food banks across Scotland.
“We were impressed by the professional and respectful way that the volunteers dealt with people who came to them, often in their hour of greatest need.”
Hepburn said that the UK Government needed to “own up to the role it is playing in causing the increase in demand and stop pretending this is simply all about people looking for something for nothing”, and that any such suggestion “insults the vulnerable members of our society using food banks and the volunteers that run them”.
Hepburn slammed the government’s welfare changes for “pushing people to the brink – and often beyond”.
A spokesperson for the Department for Work and Pensions (DWP) dismissed the report as not being “based on solid evidence, but on the opinions of those interviewed”, adding:
“The truth is that employment is going up, benefits are being paid to claimants more quickly and independent experts tell us that there are fewer people struggling with their food bills compared with a few years ago.
“The Trussell Trust and other foodbanks agree that increased awareness has helped to explain their recent growth.
“We spend £94bn a year on working age benefits and the welfare system provides a safety net that supports millions of people who are on low incomes or unemployed.
“Our reforms will improve the lives of some of the poorest families in our communities by promoting work and helping people to lift themselves out of poverty.”
> Said the DWP spokesperson, as their nose grew another metre…
Source – Welfare News Service, 02 June 2014
Good to know ! Another point to make, perhaps, is wherever possible to use local Credit Unions instead of banks. Although I don’t think you can have benefits paid into them ? Not into mine, anyway.
There is an Act of Parliament which over-rides banks taking charges from your account if you are in receipt of any of the following benefits.
• Income Support
• Tax Credits
• Child Benefit
• Job seekers allowance
• Incapacity benefit
• Disability living allowance
• Attendance Allowance
• CSA payments
• Other DWP payments.
These social security benefits are granted to stop hardship and are designed to meet basic day to day needs, and are exempt and are protected under the Social Security Administration Act 1992 sub section 187. from arrestment in terms of section 187 of the Social Security Administration Act 1992 (see Enforcement of Civil Obligations in Scotland, Scottish Executive report, at paragraph 5.245).
Section 45 of the Tax Credits Act 2002 Chapter 21 part 1 is an identical provision to the said section 187 of the 1992 Act. This stipulates that the banks can not apply…
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