Citizen’s Income News, Autumn 2012

The World Bank has published a report, The Cash Dividend: The rise of cash transfer programs in Sub-Saharan Africa, by Marito Garcia and Charity M. T. Moore. The authors conclude: ‘Much can already be learned from Sub-Saharan Africa’s experience with cash transfer programs. Evaluations of unconditional programs have found significant impacts on household food consumption (for instance, Miller, Tsoka, and Mchinji Evaluation Team 2007 for Malawi’s Social Cash Transfer Program; Soares and Teixeira 2010 for Mozambique’s Food Subsidy Program); nonfood consumption (for instance, RHVP 2009 for Zambia’s Social Cash Transfer); and children’s nutrition and education (including Agüero, Carter, and Woolard 2007 and Williams 2007 for South Africa’s Child Support Grant). A recent experimental evaluation found that a program for adolescent girls conditioned on their school attendance improved enrollment, attendance, and test scores in Malawi. Unconditional transfers in the same program decreased early marriage and pregnancy among girls who had already dropped out of school.’ (p.8).

The Institute for Fiscal Studies has published a report, Reforming Council Tax Benefit, which reviews the Government’s plan to localise Council Tax Benefit: ‘Universal Credit is intended to simplify the benefit system by reducing the number of different benefits that claimants and administrators must contend with. Keeping council tax support (the means-tested benefit with the largest number of recipients) separate – and indeed allowing it to vary across the country – severely undermines this simplification. Universal Credit is also intended to rationalise work incentives by replacing a jumble of overlapping means tests with a single one, ensuring that overall effective tax rates cannot rise too high. Again, separate means tests for council tax support could undermine this, with the potential to reintroduce some of the extremely weak work incentives that Universal Credit was supposed to eliminate. It is difficult to think of reasons why the government’s original plan to integrate CTB into Universal Credit was inferior to what is now being proposed’ (pp.8-9). ‘Achieving coherence between council tax rebates and Universal Credit is complex. The need to make the new rebates fit with Universal Credit makes local authorities’ task of designing schemes, already a difficult challenge given the tight timescale, into a truly formidable one. There is nothing in the Universal Credit system that will make it straightforward to identify those who should be passported onto a full council tax rebate. That could make running a council tax rebate scheme based closely on the current system extremely challenging for local authorities … the advantages of localisation seem to be strongly outweighed by the disadvantages, particularly in the context of the welcome introductionof Universal Credit’. (p.107)

The Joseph Rowntree Foundation has published a new report, Does the tax and benefit system create a ‘couple penalty’? ‘The use of the MIS [Minimum Income Standard] scale, which uses research into minimum living costs to show greater economies of living in a couple than the official equivalence scales, suggests that separation penalties are larger and couple penalties smaller than those scales would suggest. Indeed, it shows no case of significant couple penalty other than in the scenario where the absent parent is able to live cheaply in social housing. Moreover, even the official scale used by the Government (the OECD scale) does not show a clear-cut economic advantage for families on low earnings to split up. In the single earner cases shown here, it shows a couple penalty in one scenario, a separation penalty in three scenarios and no difference in the other three. On the other hand, for a couple with two earners, it shows a substantial couple penalty in all but one of the five scenarios looked at here. So an in-work couple penalty can be identified for a particular group of couples on a particular set of assumptions.’ (p.29).

On the 30th May 2012 the General Conference of the International Labour Organization reaffirmed that the right to social security is a human right and recommended that member countries should ‘establish and maintain … social protection floors … Schemes providing such benefits may include universal benefit schemes, social insurance schemes, social assistance schemes, negative income tax schemes, … .’