A paper by abrdn Financial Fairness Trust argues that the means tested beneft system, which should act as a safety net, is '..not only inadequate but also unfair.'
'Four main characteristics of means-tested benefts for working-age adults contradict the idea that they provide the “safety” of a guaranteed income to avoid destitution.
(i)Declining value. Working age benefts have fallen relative to both prices and earnings, from levels already assumed to be no better than subsistence.
(ii) Shortfalls in meeting basic human needs. These cuts leave people having to forego some of the key essentials of life, with some groups not even having enough benefts in total just to cover food and home energy requirements.
(iii) Inconsistency across groups. There are wide variations in the extent to which different groups’ needs are met. Families with three or more children on minimum benefts are only half as well off as pensioners, and working age adults without children only a third as well off.
(iv) Holes in the net. The fnal, particularly damning characteristic is that the
majority of people who need these benefts to survive have even less to live
on than standard beneft rates imply. This can be, for example, because they
are paying back loans taken out while waiting for their frst payment, because
they have their benefts capped or subjected to the two-child limit, or because their rent is not fully covered by the housing component, so they need to top this up by drawing on the daily living component.'
'Most people on UC with private-sector rents do not have their rent fully covered, because of Local Housing Allowance limits... Over 300,000 tenants in social housing must also fnd money from their general benefts to cover rent deducted from their Housing Beneft or UC entitlement through the “bedroom tax... The two-child limit, which means that only the frst two children are taken into account in calculating UC, systematically underprovides for the four in ten children of claimants (39%) who have at least two siblings (apart from those where all children were born before 2017) ... The Beneft Cap arbitrarily limits total benefts, regardless of need. It currently affects over 80,000 claimants.'
'A large proportion of UC claimants are having deductions taken from their benefts, to repay loans, many of which have been incurred in order to cover living costs while waiting for their frst payment. Nearly half (45%) of UC claimants have some deductions being made, ranging from very small amounts to a maximum of 25% of an award. This can leave actual income far below the full level of entitlement.'