By Charlie Kimber
Downloading PDF. Please wait... Issue 2216

Means testing benefits traps millions in poverty

This article is over 11 years, 5 months old
The government is preparing to means test key benefits such as child benefit and the pensioners’ winter fuel payment.
Issue 2216

The government is preparing to means test key benefits such as child benefit and the pensioners’ winter fuel payment.

This would mean that to get these benefits people would have to prove they had a low income.

But the difficulties and complexity of applying for such payments puts some people off—and means that vital benefits are not claimed.

Recently the charity Age UK showed that Britain’s pensioners are missing out on £5.4 billion in unclaimed benefits each year, despite 1.8 million of them living in poverty.

This includes £1.5 billion in unclaimed council tax benefit by the elderly, with pensioners less likely to claim this aid than younger people.

For the 44 percent of pensioners eligible to claim, council tax benefit could leave them an average £728 better off a year.

In February, 27 leading charities revealed that overall more than £16 billion in means-tested benefits and tax credits currently goes unclaimed every year.

As many as half of all working households entitled to housing benefit (worth an average £37.60 per week) do not claim it and up to three million households are missing out on an average £13 a week in council tax benefit.

Take-up of housing benefit and council tax benefit have both fallen over the last decade.

It is generally 10 percent lower among families from minority ethnic backgrounds.

Means testing is just another way of taking money from poor people.

Some newspapers and politicians say they are concerned that well-off or “middle class” people get child benefit or winter fuel money when they don’t really need it.

It gives the impression there is a fixed pot of money for welfare—which isn’t true.

We should keep such benefits universal—and tax the rich heavily to fund benefits and services properly.

The Tories are threatening to cut off benefits from people it deems to be problem drug users.

Yet within days of entering government, ministers decided not to proceed with Labour pilot projects that would have followed this approach.

They cited a Social Security Advisory Committee report that concluded: “There is little, if any, evidence that strong mandation will support problem drug users to succeed in treatment and move towards the labour market.”

It added that a punitive approach may also push people to “other sources of income such as crime and prostitution”.

If the Tories go ahead with these plans they will break another election promise.

During the election David Cameron angrily denied that he planned to cut winter fuel payments. And on Newsnight, Philip Hammond, now the transport secretary, promised, “We have made a decision to rule out means testing child benefit. The universality of child benefit is really important to people, it reassures them about the availability of that benefit.”

But the Tories said they weren’t going to put up VAT—yet it goes up 2.5 percent in January.

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