Chancellor George Osborne’s other announcement to introduce a cap on benefits at £26,000 is even more unfair than the child benefit changes.
Our guest writer is Pete Challis, chair of the ALG Housing Committee (1990-99)
The media have made much of the unfairness in the proposals to remove eligibility for child benefit to any family where there is a higher rate taxpayer. The unfairness that one person earning more than £43,875 will lose their child benefit while two earners whose combined incomes is £80,000 will keep child benefit was immediately seized on.
But chancellor George Osborne’s other announcement to introduce a cap on benefits at £26,000 is even more unfair. It takes no account of housing costs, family size or council tax and penalises couples.
To illustrate the postcode lottery that is being created and the impact, compare the following. (Note that the calculations do not include child tax credits, which is a further factor and penalty.)
Take a couple (Couple A) on job seekers allowance with 4 children living in a 4 bedroom home in the private rented sector in Camden. They pay £400 a week in rent (£20,800 a year) – the new ceiling being imposed from next year, their council tax is £1,332 (Band D). Their job seeker’s allowance (£5,343) immediately takes them over the cap.
Their job seeker’s allowance is effectively cut from £102.75 a week to £74.38 a week and they effectively lose all child benefit.
Now take the same couple (Couple B) on jobseekers allowance with 4 children but this time living in a 3 bedroom home in the private rented sector in Camden. They pay £340 a week in rent (17,680 a year), their council tax is still £1,332 (Band D). They keep job seeker’s allowance (£5,343) and child benefit for Child 1 but effectively lose some child benefit for Child 2 and all child benefit for children 3 and 4.
Compare them with a single parent on jobseeker’s allowance with 4 children who also lives in a 3 bedroom home in the private rented sector in Camden. The rent is £340 a week (£17,680 a year), their council tax is now £999 (single person discount Band D). They keep job seeker’s allowance (£3,432) and they keep child benefit for all their children.
In order to keep all their child benefits the couple (Couple D) must move into a 2 bedroom home with a rent at £290/week, the children share the two bedrooms and they sleep in the living room but they keep their Jobseekers allowance and all their child benefit.
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Camden |
Camden |
Camden |
Camden |
Birmingham |
| Couple A | Couple B | Sngl prnt C | Couple D | Couple E | |
| HB | £20,800 | £17,680 | £17,680 | £15,080 | £11,369 |
| CTB | £1,332 | £1,332 | £999 | £1,332 | £1,261 |
| JSA | £5,343 | £5,343 | £3,432 | £5,343 | £5,343 |
| CB 1 | £1,056 | £1,056 | £1,056 | £1,056 | £1,056 |
| CB 2 | £697 | £697 | £697 | £697 | £697 |
| CB 3 | £697 | £697 | £697 | £697 | £697 |
| CB 4 | £697 | £697 | £697 | £697 | £697 |
Alternatively, if the couple (Couple E) could move into a 5 bedroom property in Birmingham (£218.63 a week) they would be unaffected by the cap.
48 Responses to “Housing benefit changes even more unfair than child benefit cuts”
Evidence based.
Its pretty absurd to say that people who earn less than 26k can commute into the capital, whereas those who get it on benefits can’t. Why the hell not?? Granted it might make there lives slightly more difficult- i am willing to concede they might get slightly sweatier and be distracted by a noisy youth/bob crowe when getting the tube to an interview- but when you are solely in recepit of the state, your comfort is contingent on others paying from it.
Evidence based.
And yes, they might have to move away from their friends- tough. I have friends who live in Kensington, I don’t get to live with them because as a working man i don’t earn enough, and that fine. When i want to see them I get on a tube/train/bus/bike. Seriously, can people subsidised to 26k not do that??? Madness
jeff marks
I can’t really understand people who think people in this country should be paid many times what someone in Africa would get for a 70 hour week – for doing absolutely nothing. Sounds like racism to me.
Ash
As Jeremy Hunt has explained, the solution is really very simple: if there is any possibility that at some time during the next quarter of a century or so, you or your partner might find yourselves out of work and reliant on benefits due to redundancy, ill health, bankruptcy etc, you should simply refrain from having children.
(Alas, since such things are unforeseeable, this means everyone without a private source of unearned income to fall back on will have to refrain from reproducing. We must face the fact that children are a luxury the working classes can simply no longer afford. Harsh, but fair.)
Chris
@Jeff Marks
“why do way people who don’t work anything? can’t they just starve?”
LOL, are you actually mental or just taking the piss?