Benefits no longer inflation proofed

[pdq1]

http://www.bbc.co.uk/.../uk-politics-19629997

Is this a good idea to save £10bn? Some say inflation rises to the benefit just adds to the inflation figure.

[mike11111]

From a purely logical point of view it is not a good idea, in fact a very silly one. The whole point of state funded benefits is, as I understand it, to enable those who for whatever reason are unable to provide for themselves through private income or wages, to live at a level the government considers reasonable in a civilised society. If such a doctrine had been applied when I worked in the Family Allowance department 45 years ago, then the current rate of child benefit would be 40p per week for two children!

[factor-fiction]

I think the argument may be that this year benefits went up around 5% whereas those in work enjoyed average increases of much less. But it probably won't happen to any significant degree because there will be too many claims that the disabled etc are being penalised

[ABerrant]

mike11111 - your maths is a bit faulty; you seem to have ignored the bit in the article which proposes linking benefit to average earnings.

Family allowance in 1967 was 10/- (50p) per week.
Average earnings in 1967 was around £22 pw.

Average earnings now is around £500 pw.
Therefore pro rata child benefit would be around £23 pw in comparison to the current rate of £33.70 for two children (£20.30 + £13.40).

[Hopkirk]

I haven't had a pay rise for years, so why should the unemployed?

[pdq1]

Good points. But is this idea short termism. The inflation rate which mattered last Sept was 5.2% which means benefits rose quite sharply compared with wages. However last month the inflation rate was nearly half that amount. So come this September figures for inflation they will drop even further.

[emmie]

hopkirk, because some of the unemployed can get tuppence halfpenny for their pains, and their unemployment may not be their fault. Do we not have to eat too?

[Essell]

If we are to believe the pundits, life will be much tougher for us all in the next decade, and particularly the low paid. Cost of living will rise, but wages will flatline. If benefits rise with inflation, those working in the lowest paid jobs will struggle compared to the unemployed. However, in an age of prosperity, with good wages and low inflation, benefits could fall compared to average income. It makes sense to tie all benefits in with average income doesn't it?