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oldsport

Should All Benefits Be Means Tested?

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I was wondering how people see the role of benefits in the welfare state.

So many people on this site are firmly against most benefits.

But have you ever thought about what you would do if you became so ill that you really couldn't work again.

I'd never really thought about this until it happened to a close family member a few year ago who after working and saving for many years now has to claim Incapacity Benefit whcih at the moment isn't affected by her savings as it's a contributory benefit dependent on NI contributions.

Would you be happy to lose your savings and then live on the breadline on means tested benefits or do you think the state should continue to provide contributory benefits for those who really are too ill to earn a living?

Have you taken out any insurance instead which will replace your income in the long term if you can't work? If so what type, Permanent Health Insurance, Income Protection Insurance, Critical Illness Insurance?

Edited by oldsport

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Have you taken out any insurance instead which will replace your income in the long term if you can't work? If so what type, Permanent Health Insurance, Income Protection Insurance, Critical Illness Insurance?

...I would make most of those mentioned compulsory when taking out a mortgage ...otherwise the state has to provide .....why..?.... :rolleyes:

Edited by South Lorne

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Unless you’re a Single mum it is a very difficult and stressful experience getting help. I suffer from a long term illness and work full time I don’t claim anything even though I would be able to claim DLA mobility etc.

When I am unable to work, I wouldn’t expect the government to disqualify me from benefits as I have been a contributor to society.

When you say means test I would agree if it was based on past contributions. But not all people on benefits have the choice of going to work.

It's a tricky question but the few seem to have ruined it for the many who need help.

Edited by ant1980

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I was wondering how people see the role of benefits in the welfare state.

Benefits should be a safety net and there are really only two sensible options - 1) means tested but tapered so you are never worse off by working 2) a national dividend which everyone gets but that is effectively clawed back in tax for people earning over the tax threshold.

I more I think about it the more I like idea 2 because its so simple to execute and doesn't reward people for not saving. Invalidity is the only special case I would cater for.

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Benefits should be a safety net and there are really only two sensible options - 1) means tested but tapered so you are never worse off by working 2) a national dividend which everyone gets but that is effectively clawed back in tax for people earning over the tax threshold.

I more I think about it the more I like idea 2 because its so simple to execute and doesn't reward people for not saving. Invalidity is the only special case I would cater for.

A universal wage (fairly low but survivable - i.e. will pay for some basic accom and food) with some additional help for severe disabilities makes sense to me. Not sure how to factor kids into it - maybe full wage at 18 and do it by percentages until then (a 2 years old gets 200/18% = 11%). I don't think that's enough to make having a load of kids a soft option.*

* I'm not totally convinced this happens in the kind of numbers a lot of posters on here imply, but I'm happy to try and keep everyone happy...

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Benefits should be a safety net and there are really only two sensible options - 1) means tested but tapered so you are never worse off by working 2) a national dividend which everyone gets but that is effectively clawed back in tax for people earning over the tax threshold.

I more I think about it the more I like idea 2 because its so simple to execute and doesn't reward people for not saving. Invalidity is the only special case I would cater for.

Oh and it goes without saying that only fully naturalized british citizens would be eligible for anything, ditto for access to non-emergency NHS treatment.

Edited by goldbug9999

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...I would make most of those mentioned compulsory when taking out a mortgage ...otherwise the state has to provide .....why..?.... :rolleyes:

Personally I support it but can't give any ideological basis.

It's one of those benefits like the state pension that is specifically linked to your national insurance contributions record. You only get it if you've worked and paid enough contributions in the past.

The alternative would be paying for private insurance to cover income in case of long term ill health, but the take up rates in the UK for this type of insurance are tiny, less than 1% IIRC. I've actually done this, but as I say that's very rare.

And renters can also get seriosuly poorly! Bye Bye STR fund if it was means tested

Edited by oldsport

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I got a years private unemployment cover, thats it. It costs about 10% of the NI contributions I make and provides a far, far better standard of cover, for a year at least.

Out of curiosity I just had a look at permanent health insurance, as I felt private insurance cover was far better value than compulsory government schemes, at least compared to the National Insurance payments I personally pay. And indeed, permanent health insurance is also pretty cheap (£150 a year is my quote from Legal and General, thats with a years excess but that'd be covered by the scheme I already got) compared to National Insurance.

It looks to me like the reality is that these public schemes are actually absolutely terrible value for money. If there was the option of losing NI completely and buying your own health and unemployment insurance, and pension provision, you'd probably all be a hell of a lot better off.

That said, I'm sure the reason the private sector offers such apparently good deals is because they have to outmatch the compulsory government scheme.

Of course you get screwed by the government anyway as if you're getting paid by a private insurance scheme, they won't give you any means tested benefit, so once again looking after yourself in this country is officially frowned upon.

Edited by EUBanana

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If I became seriously ill\disabled? Probably be screwed, homelessness would be inevitable as I'd not be able to cover the rent\bills. So I guess begging on the street would be the only option...

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Out of curiosity I just had a look at permanent health insurance, as I felt private insurance cover was far better value than compulsory government schemes, at least compared to the National Insurance payments I personally pay. And indeed, permanent health insurance is also pretty cheap (£150 a year is my quote from Legal and General, thats with a years excess but that'd be covered by the scheme I already got) compared to National Insurance.

I also found that Permanent Health Insurance (which I think is exactly the same as Income Protection insurance) is surprisingly cheap, as long as you take a long excess/deferred period, although it goes up massively as you get older, but hopefully by then you no longer need it.

Cheaper than the short term policies you get with loans etc. and much better cover.

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I was wondering how people see the role of benefits in the welfare state.

So many people on this site are firmly against most benefits.

But have you ever thought about what you would do if you became so ill that you really couldn't work again.

I'd never really thought about this until it happened to a close family member a few year ago who after working and saving for many years now has to claim Incapacity Benefit whcih at the moment isn't affected by her savings as it's a contributory benefit dependent on NI contributions.

Would you be happy to lose your savings and then live on the breadline on means tested benefits or do you think the state should continue to provide contributory benefits for those who really are too ill to earn a living?

Have you taken out any insurance instead which will replace your income in the long term if you can't work? If so what type, Permanent Health Insurance, Income Protection Insurance, Critical Illness Insurance?

Have an ex mate who is nearly 50 , in all his life he has worked for about two years paying NI , that was when he first left school. Since then due to a heart condition he has never worked apart form cash in hand .

For the last ten years he has qualified for top rate DLA. shinney new car every 3 years taxed, insured and serviced . Free house ect his total package is worth £35k pre tax and he works on the side ,ran up £12k on credit cards and declared himself bankrupt ,walked away from all the debt's.

The state have really looked after him.

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Have an ex mate who is nearly 50 , in all his life he has worked for about two years paying NI , that was when he first left school. Since then due to a heart condition he has never worked apart form cash in hand .

For the last ten years he has qualified for top rate DLA. shinney new car every 3 years taxed, insured and serviced . Free house ect his total package is worth £35k pre tax and he works on the side ,ran up £12k on credit cards and declared himself bankrupt ,walked away from all the debt's.

The state have really looked after him.

How can I apply to get this heart condition?

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How can I apply to get this heart condition?

Exactley ,

Have seen him carry a five foot side board up stairs , just him and one other person. Amazing what he is capable of but tells the DLA he can only walk a few paces.

His name is MR PONCE , ponceses of the state and everyone else that he can con.

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Would you be happy to lose your savings and then live on the breadline on means tested benefits or do you think the state should continue to provide contributory benefits for those who really are too ill to earn a living?

I think this would be a good idea, as long as having to pay into the benefits system was means tested too. If you wouldnt qualify for benefits then you dont have to pay into the scheme. I mean who in their right mind would pay for insurance that wouldnt cover them?

Edited by Johnny Storm

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A universal wage (fairly low but survivable - i.e. will pay for some basic accom and food) with some additional help for severe disabilities makes sense to me. Not sure how to factor kids into it - maybe full wage at 18 and do it by percentages until then (a 2 years old gets 200/18% = 11%). I don't think that's enough to make having a load of kids a soft option.*

* I'm not totally convinced this happens in the kind of numbers a lot of posters on here imply, but I'm happy to try and keep everyone happy...

A universal wage has to be very low to avoid it seeming very strange and completely distorting our current income models.

For example a £3000 per year universal wage would be about the same spend as our current benefits system and wouldn't change the balance of payments much. On the other hand I wouldn't want to live on it. But I probably could whilst looking for work, this is about the same as job seekers allowance, which I probably wouldn't get because I have savings.

A £10000 per year universal wage would be something I would be able to live on but not with my current lifestyle. This would mean vastly higher taxes though. If someone on average wage ( 26k ) were to get the same take home they would have to be paying over 60% tax.

In order to prevent higher income tax payers from having a massively reduced take home, there would have to be a lower tax band of 40% for higher earners.

The cost of this would be over half a trillion a year. Would we be able to cover that with these taxes?

The incentive for tax dodging would be huge too.

What is fairly low but survivable?

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Legalise euthanisia. I dont want to be a vegetable if an accident occurs likewise I dont want to fester in a nursing home.

Everyone form an orderly queue behind the gunsight...

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I am not against benefits provided they look after the genuinely needy. The problem we have at the moment is a benefits system that hands out money to almost everyone in the country just for existing, whether they need it or not.

I think the tax and benefits system need to be integrated and massively simplified. So we need to combine all income taxes and all benefits into one system.

My solution is this:

£15000 personal allowance and a flat income tax of 50% on top of that. (this would work out as a tax cut to anyone not already a higher rate payer - think about NI and employer's NI if you don't believe me).

The only benefit should be a 50% negative income tax. (Or a citizen's income of £7500.)

This could also replace state pensions (and be a small lift in them too.)

If £7500 is enough to live on, then we wouldn't need a minimum wage law either - and people also wouldn't have to go and work for low wages. But if they wanted to work for £2.50 an hour they would still be better off doing that than if they didn't work at all.

That is enough for an individual to live on in rented accommodation - not exactly pleasant, but then there needs to be an incentive for work.

No extra benefit for children - if you want them then you have to pay for them.

Also - in order to claim you would have to have paid your taxes for several years with the one caveat below of those mentally/physically incapable of working.

Having run the numbers - this actually turns out to be about revenue neutral and is a tax cut for everyone earning less that about £45k per year.

So we would get a better targeted benefits system and a stimulus package all in one, we could cut the size of government and release lots of people into the workforce to do more productive things, and also it might help generate lots of lower paid jobs that would serve as training jobs for the unemployed young.

The only exception should be for people who are completely incapable of working for themselves - though they would get the benefit of the £7500 citizen's income.

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as long as you take a long excess/deferred period

You can get unemployment protection to cover that economically, though.

, although it goes up massively as you get older, but hopefully by then you no longer need it.

...yeah. That's really the main flaw of private insurance and is the best argument in favour of a safety net. Some people are just uninsurable through no fault of their own. Not merely the old.

That said. As someone in reasonable health and with an average job, I personally would be much better off with NI replaced by private schemes.

Cheaper than the short term policies you get with loans etc. and much better cover.

I read somewhere ages ago that the deals you get bundled with mortgages, loans and such are all terrible value and you should really shop around if buying insurance. Part of the "shopping around" has me looking at unemployment insurance and think "not bad!". Never bothered with it until recently, but given the recent economic difficulties I thought maybe it's wise, and it's not expensive.

Of course. I got no idea how much they'll wriggle when it comes to time to pay up. I'll report back if I get scammed or jerked around in the end. :P

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Benefits largely are means-tested. I'm an unemployed truck driver (if you ain't buying it, we ain't moving it) and all I get is £65 a week and my NI stamp paid. My rent and council tax come to about £650 a month but that isn't paid because I have more than £16,000 in savings. Even the £65 only gets paid for 6 months (based on having paid National Insurance for 35 years) then I won't get any state benefits, other than my stamp paid.

Not that I am bellyaching, recessions are what savings are for.

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Benefits largely are means-tested. I'm an unemployed truck driver (if you ain't buying it, we ain't moving it) and all I get is £65 a week and my NI stamp paid. My rent and council tax come to about £650 a month but that isn't paid because I have more than £16,000 in savings. Even the £65 only gets paid for 6 months (based on having paid National Insurance for 35 years) then I won't get any state benefits, other than my stamp paid.

Not that I am bellyaching, recessions are what savings are for.

I'm sorry to hear that.

It is sad, though, that those who have worked are treated worse than those who have never worked. That doesn't mean to say that you blame those who never worked, as some at least have legitimate reason, but even so there is an imbalance here.

There should be a negative income tax or something like that, it seems the only fair way.

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  • 224 Brexit, House prices and Summer 2020

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