Topic: Is £26,000 per household per year enough to live?

[Thespence]

GM - If the cap is £26K take home/cover rent do you know how much someone would have to earn to get that much.

[GM]

About 35k.

[Thespence]

Cheers!

[Interpolic]

One of the things I found when I was on a very low wage after University was that the costs associated with work - travel, lunch, etc - meant I wasn't any better off than when I was on the dole at all.  Everything's so dear these days man, you can see why people take the easy option, particularly when their parents do the same.

[Ian W]

Being freelance and 'between contracts' the last couple of weeks, sitting around at home is so much cheaper than going to work it's untrue. Save £30 a week on my travelcard for starters. Wouldn't choose it still, but I can see the point about costs associated with working.

[GM]

There's a few reasons why I have concerns about IDS's welfare reform package, and why I'm fairly convinced that it's not about "making work pay" or "making things fairer" as the Tories suggest. They're about demonising people on benefits, spreading misconceptions and untruths about the level of benefits so that the perverse extreme cases (which I agree are outrageous) are misunderstood by the masses to be the norm rather than the exception. What this government really wants to do is emulate the American workfare model, which quite frankly doesn't work. From a very crude taxpayers' perspective, the benefits of having a comprehensive welfare system need to be weighed up against the disadvantages of higher crime, bigger bills for crisis health and social care interventions and the degeneration of poorer areas to the point they become cesspits of social destruction. Nobody seems to want to recognise this fundamental reality though, so we'll carry on dismantling the welfare state, all the while still paying our taxes and NI contributions, and when we need the safety net that we've been paying for, it simply won't be there. That, quite frankly, is what we are looking at right here, and I think it's very worrying.

For anyone who works in construction - there will be a knock-on impact on your industry too (not that it needs any further kicks in the proverbials, either) - because when housing association and council landlords stop receiving Housing Benefit directly from the DWP and have to rely on the tenants to do it, we will see a massive increase in rent arrears. That will, in turn, mean that lenders (who basically fund the cost of housing development) will ratchet up the cost of borrowing to housing associations and councils, and that will mean increased rents, and increased housing benefit bills...

[Mowen]

The fact you could get an unlimited amount in rent so you could live practically anywhere is extremely unfair as well.  If your on benefits, then you should not be allowed to live in wealthy areas where people who work could only dream of affording to live there.

I know what you mean - it's frustrating to know that however much I work as, say, a nurse in the City, I won't be able to live anywhere near my work. However, if you talk about not allowing poor people to live in wealthy areas you're talking about ghettoizing cities. That's not a way to heal society.

We're already seeing an exodus of the poor in London to an extent, a good case in point is Elephant and Castle. The huge blocks where families have lived and been brought up are being ripped down to be replaced with newer, nicer, fancier buildings. Which will be so expensive that those they're kicking out won't be able to live there anymore.

Whilst E&C is a bit of a dump and probably needs something doing this sort of behaviour (or 'regeneration') sits very uneasily with me; they're kicking out people who've made their lives there essentially to let tossers (a bit like me) who have no connection to the area but do have more cash and like the location in.

There is something to be said for limiting the amount of money available specifically for renting places to an extent but chopping them down and forcing people to leave areas they've always lived in is just not right.

Sometimes gentrification is the only way.

It would increase the wealth of the area which produces more benefits.

Isn't this what you did at Uni greg? 

Surely that's a short sighted view of it though. Yes (in this example) the wealth of E&C will increase, it will become a nicer place to be and I'm sure there will be numerous knock-on benefits. But the people being forced out are extremely poor and will have no choice but to relocate to areas that already have severe issues of their own such as Camberwell and Peckham effectively creating ghettos for want of a better word.

It just smacks of sweeping the problem under the carpet, get it somewhere we can't see it and deal with it later.

[Mowen]

This £26,000 cap would include Housing Benefit. I know that sounds a lot of money, but what people need to understand is how Universal Credit (the new all in one benefit for people of working age) will work. Claimants who live in social housing and receive housing benefit to help them with their rent have traditionally been able to have their HB paid direct to their landlord. That means that they know, whatever else happens, the roof over their heads is taken care of. That sounds to me like a far better way of doing things than the way this government want to do things, which is effectively to hand over a large monthly lump sum payment (Universal Credit) to claimants, which would include their housing benefit, and then expect them to budget and pay their landlords, the utility companies, food bills etc. What the government fails to recognise is that many social housing tenants will find budgeting beyond them, and will quickly find themselves in rent arrears and out on the street.

Whilst it probably does make more sense to pay that housing benefit straight to landlords, what's the problem with asking people to take a bit of responsibility for their own life?

Are there people out there so slow that they can't reconcile basic add and subtract sums? Everyone else has to do it.

Oh I know, mate. I know. And yes there really are people who - as a result of disability, mental incapacity or illness or other health issues - would find budgeting really hard. But the point I was trying to make is that benefits (Universal Credit) will be paid direct to the claimant, 4 weekly, in arrears...and they won't necessarily have bank accounts as they may live in areas where banks are unwilling to provide any sort of service. So what we are waiting for the Government to tell us is how they envisage claimants being able to get this money and how landlords can be sure they'll see any of that housing benefit money at all...

I know this isn't your main point but FYI banks actually have to offer a service to customers by law as far as I know; there's no opportunity for credit of any sort and they're extremely limited in what you can do with them (I think you can usually only withdraw cash from their own cashpoints as there's no appetite for the customer to go overdrawn) but if a customer has an address I'm pretty sure the bank has to offer this service. Generally known as a cash account or basic banking.

[GM]

This £26,000 cap would include Housing Benefit. I know that sounds a lot of money, but what people need to understand is how Universal Credit (the new all in one benefit for people of working age) will work. Claimants who live in social housing and receive housing benefit to help them with their rent have traditionally been able to have their HB paid direct to their landlord. That means that they know, whatever else happens, the roof over their heads is taken care of. That sounds to me like a far better way of doing things than the way this government want to do things, which is effectively to hand over a large monthly lump sum payment (Universal Credit) to claimants, which would include their housing benefit, and then expect them to budget and pay their landlords, the utility companies, food bills etc. What the government fails to recognise is that many social housing tenants will find budgeting beyond them, and will quickly find themselves in rent arrears and out on the street.

Whilst it probably does make more sense to pay that housing benefit straight to landlords, what's the problem with asking people to take a bit of responsibility for their own life?

Are there people out there so slow that they can't reconcile basic add and subtract sums? Everyone else has to do it.

Oh I know, mate. I know. And yes there really are people who - as a result of disability, mental incapacity or illness or other health issues - would find budgeting really hard. But the point I was trying to make is that benefits (Universal Credit) will be paid direct to the claimant, 4 weekly, in arrears...and they won't necessarily have bank accounts as they may live in areas where banks are unwilling to provide any sort of service. So what we are waiting for the Government to tell us is how they envisage claimants being able to get this money and how landlords can be sure they'll see any of that housing benefit money at all...

I know this isn't your main point but FYI banks actually have to offer a service to customers by law as far as I know; there's no opportunity for credit of any sort and they're extremely limited in what you can do with them (I think you can usually only withdraw cash from their own cashpoints as there's no appetite for the customer to go overdrawn) but if a customer has an address I'm pretty sure the bank has to offer this service. Generally known as a cash account or basic banking.

I know that mate, but the reality is that about 1.5million people in the UK have no access to a basic banking account, whether that's because of poor credit history, lack of savings or whatever, meaning that they are having to resort to loan sharks and other high interest money lenders to make ends meet. Once they're caught in that trap it's a never-ending downward spiral for them. I really wish that this welfare reform process had, as one of its objectives, tackling this lack of basic banking facilities and lack of access to affordable credit.

[Mowen]

I see, didn't realise you were referring to the ability to borrow money as part of the banking. It's a tough one to tackle that as I can't see how they're going to persuade banks to take on business they're almost guaranteed to lose money on if rolled out on a large scale.

[neesy111]

Pretty sure there are plans to make everyone have a basic bank account, although we are in a minority who get there bank accounts for free, in most countries you have to pay a monthly fee.

Money management should be in the school curriculum.

[GM]

Pretty sure there are plans to make everyone have a basic bank account, although we are in a minority who get there bank accounts for free, in most countries you have to pay a monthly fee.

Money management should be in the school curriculum.

Damn right. That's the second thing you've said in here that I agree with wholeheartedly. This is getting worrying.

[GM]

I see, didn't realise you were referring to the ability to borrow money as part of the banking. It's a tough one to tackle that as I can't see how they're going to persuade banks to take on business they're almost guaranteed to lose money on if rolled out on a large scale.

Used to be something called the Girobank. It worked well enough.

[neesy111]

The fact you could get an unlimited amount in rent so you could live practically anywhere is extremely unfair as well.  If your on benefits, then you should not be allowed to live in wealthy areas where people who work could only dream of affording to live there.

I know what you mean - it's frustrating to know that however much I work as, say, a nurse in the City, I won't be able to live anywhere near my work. However, if you talk about not allowing poor people to live in wealthy areas you're talking about ghettoizing cities. That's not a way to heal society.

We're already seeing an exodus of the poor in London to an extent, a good case in point is Elephant and Castle. The huge blocks where families have lived and been brought up are being ripped down to be replaced with newer, nicer, fancier buildings. Which will be so expensive that those they're kicking out won't be able to live there anymore.

Whilst E&C is a bit of a dump and probably needs something doing this sort of behaviour (or 'regeneration') sits very uneasily with me; they're kicking out people who've made their lives there essentially to let tossers (a bit like me) who have no connection to the area but do have more cash and like the location in.

There is something to be said for limiting the amount of money available specifically for renting places to an extent but chopping them down and forcing people to leave areas they've always lived in is just not right.

Sometimes gentrification is the only way.

It would increase the wealth of the area which produces more benefits.

Isn't this what you did at Uni greg? 

Surely that's a short sighted view of it though. Yes (in this example) the wealth of E&C will increase, it will become a nicer place to be and I'm sure there will be numerous knock-on benefits. But the people being forced out are extremely poor and will have no choice but to relocate to areas that already have severe issues of their own such as Camberwell and Peckham effectively creating ghettos for want of a better word.

It just smacks of sweeping the problem under the carpet, get it somewhere we can't see it and deal with it later.

This is where the lack of social housing is one of the root causes to it all.  If there was enough social housing for most then you wouldn't have this mass exodus from people in private housing to a place where they can afford under the cap.  It would go half way into fixing the housing market by making more private properties available and bring private rents under control to a sustainable level.

[neesy111]

Pretty sure there are plans to make everyone have a basic bank account, although we are in a minority who get there bank accounts for free, in most countries you have to pay a monthly fee.

Money management should be in the school curriculum.

Damn right. That's the second thing you've said in here that I agree with wholeheartedly. This is getting worrying.

 

[GM]

Pretty sure there are plans to make everyone have a basic bank account, although we are in a minority who get there bank accounts for free, in most countries you have to pay a monthly fee.

Money management should be in the school curriculum.

Damn right. That's the second thing you've said in here that I agree with wholeheartedly. This is getting worrying.

 

All I'm saying is that there's a job for you in Glasgow if you ever want it, mate.

[neesy111]

Pretty sure there are plans to make everyone have a basic bank account, although we are in a minority who get there bank accounts for free, in most countries you have to pay a monthly fee.

Money management should be in the school curriculum.

Damn right. That's the second thing you've said in here that I agree with wholeheartedly. This is getting worrying.

 

All I'm saying is that there's a job for you in Glasgow if you ever want it, mate.

Cheers.  Will keep it mind.

[GM]

Workless families: a convenient untruth
A belief in inherited underclass idleness is spreading, but in reality multiple generations who have never worked is very rare
Editorial · guardian.co.uk
http://www.guardian.co.uk/commentisfree/2012/feb/02/workless-families-convenient-truth-editorial?fb=native&CMP=FBCNETTXT9038

As the Commons debated welfare on Wednesday, Anna Soubry – one of the ablest new Tories – insisted that "often third generation" long-term unemployed could not be "exempt from the real world". A belief in couch-bound idleness as an inherited underclass trait is spreading. Iain Duncan Smith talks of communities in which "three generations of the same family have [often] never worked", and David Cameron punts variants of the same factoid. It is not just Conservatives who believe in estates where the meaning of work has dropped from living memory: Labour's Barry Sheerman recently urged understanding jobless youths in the context of their workless families.

It is not hard to see the appeal, for the right, of stories about "Shameless estates". The coalition's unprecedented benefit cuts require a justification, and the idea that welfare consigns whole communities to the scrapheap strengthens the case for drastic action. Sketching a feral underclass, not moored in ordinary morals or everyday practices such as working, also creates useful political distance between the mainstream and the marginalised, who face the deepest cuts. But for the British left too, so often weirdly nostalgic, there is a certain appeal in tales of hope having been extinguished across swaths of modern society.

The "never-worked families" hypothesis is convenient for ministers and alarmist columnists, but is it in any way true? Important new work from the authoritative CMPO thinktank at Bristol University explores how disadvantage trickles down the generations – but also takes a cool look at the facts. Using the best official data, the research confirms worklessness is a major problem: in 3.7m working-age households, 18% of the total, nobody has a job. But two-generational worklessness is far rarer – workless parents and grown-up children are found together in only 0.9% of households. As for homes with two generations that have never worked, the fraction drops further, to less than 0.1% of the total. Of course there will be some "never-worked" families where children have flown the nest, but the little data available suggests these, too, are uncommon.

The truly double-generation long-term unemployed family is, then, a rare species. As for the politicians' "third-generation" perma-idlers, these are on the critically endangered list – if not entirely fictional. The Joseph Rowntree Foundation set out to identify and investigate 20 such "never-worked" families in deprived Glasgow and Teesside, but it found not a single one. The reality is not permanent idleness, but permanent insecurity. Yes, there are individuals who give up on the jobs market, but most have relatives who flip between low pay and unemployment. It is a complex picture – tough to caricature and tougher to address. But it has the merit of being true.

I thought this resonated with my own experiences of working in this area of public policy/public service provision over the past 15 years. The sad fact is the media want to portray people as lazy and feckless because that suits them and the rich want to believe it because it justifies the fact they take more out of the system than they ever put in. C'est la vie....