A difficult year for claimants and staff

2013 won’t be an easy year for the UK’s benefits system: it won’t be easy for people reliant on benefits, and it won’t be easy for Department for Work and Pensions (DWP) or Her Majesty’s Revenue and Customs (HMRC) staff. Much has already been written about the current and future sufferings of benefits recipients:

  • the benefits cap, which will make it difficult for many families to remain in high rent areas. Moving away will make it more difficult for them to maintain family networks, and the exodus will put more pressure on housing in outer London boroughs – and it’s not these families’ fault that what were once low rent areas are now high rent ones;
  • the withdrawal of the value of Child Benefit from families in which one partner is eaning more than £50,000 might make quite a hole in a household’s standard of living if outgoings are difficult to reduce. The situation is replete with injustice: a household in which both partners earn £49,000 pa, a total of £98,000 pa, won’t see its net income fall, whereas a household with one earner earning £60,000 pa will lose all of its Child Benefit or will lose all of its value through the tax system.
  • Universal Credit will in theory make life easier as people move in and out of employment, and it will mean that someone earning an extra pound will keep more of it than they do now. However, in practice the system will rely on HMRC computers telling DWP computers what everyone on benefits is earning, accurately, month after month. DWP systems are based on households and HMRC’s are based on individuals. Has anyone yet known a new government computer system work perfectly, all of the time?
  • Council Tax Benefit is being localised, meaning that every borough council in the country has to invent its own rules for administering the benefit. Either those calculating Council Tax Benefit will need to adjust the benefit as Universal Credit changes month by month, or Universal Credit systems will need to take into account hundreds of different local Council Tax Benefit systems.

We don’t envy anyone currently receiving Child Benefit, in-work means-tested benefits (‘Tax Credits’) or out-of-work means-tested benefits; and we don’t envy DWP, HMRC and local authority staff who will have to administer all of this and get it right all of the time.

Thirty-five years ago I worked for what was then the Department for Health and Social Security, administering means-tested Supplementary Benefit. This was before word processors, and the code (the rule-book) extended the length of a bookshelf. It was my job to insert the new pages when they came round once a month. We could cope with minor changes to the system – just about. But the complex lives that people led meant that changes of circumstance always created havoc with people’s benefit entitlement and with their payments. I worked on the reception desk. I was the one they came to see when their payment was late, or it was wrong. It often was.

DWP, HMRC and local authority staff are going to spend the next two years handling major changes to the benefits system. Thirty years ago, complex changes to just one benefit, Housing Benefit, caused the system to crash. Hundreds of different bureaucracies nationally and locally will this year and next attempt transitions from one highly complex bundle of systems to another. We really don’t envy them.

One positive outcome might be an increasing desire to ask serious questions about the system as a whole. Is a complex means-tested system really fit for purpose in our fast-changing and complex world? If not, what kind of a system would be appropriate for such a world?

There are good reasons for believing that a Citizen’s Income – an unconditional, nonwithdrawable income for every individual as a right of citizenship – would be a useful foundation for the system that we shall now need. (The FAQs page on our website, www.citizensincome.org, gives some of these arguments)

We look forward to joining in the debate – and hope that there will still be people left in HMRC and the DWP to debate with.