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No, Most U.k. Homes Do Not Get More In Welfare Than They Pay In Tax

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Do more than half of British households get more back from the government in benefits than they paid in tax?

That statistic was widely reported on Tuesday, based on a report by the Centre For Policy Studies. It produced a bulletin announcing this news, adding that it was evidence of “the scale of the challenge which remains to reduce welfare dependency.” It set out its key finding: “In 2013/14, 51.5 percent of households received more from the state in cash benefits and benefits in-kind than they paid in taxes.”

The report is based on data from the Office For National Statistics. Here you can see how taxes and benefits stack up across the different income deciles:

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Give And Take: How different U.K. income groups pay to the government and receive back

But the ONS did what the CPS didn't: it explained what it meant by “benefits-in-kind.” These are the government services that people receive which can be quantified: free state education, free healthcare, subsidies for trains and buses.

-1x-1.png

If you don't think that things like the National Heath Service and state schools are what you would usually include in “benefits” (a word that's interchangeable with “welfare” in Britain) the breakdown looks like this:

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Now You See It: The chart if it includes only the welfare payments

And this is before you take out State Pension payments, which make up just under a half of the welfare budget, but which many people would dispute count as "welfare".

What that chart shows is that the poorest 30 percent of households receive significantly more in cash benefits than they pay in tax. The next 10 percent receive on average £596 pounds a year more in cash benefits than they pay in tax, and the top 60 percent all pay more in tax than they get back in cash benefits.

Adam Memon, Head of Economic Research at the CPS, and co-author of the report, defended not explaining what was meant by “benefits-in-kind” and argued that his point still stood.

“I can understand that other people may not have seen that terminology, but it's the ONS terminology,” he said in an interview. “The paper is about dependency on the state. Dependency does include health, education, and so on.”

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Part of the quotation from Adam Memon “The paper is about dependency on the state. Dependency does include health, education, and so on.”

In that case, the entire population is dependent on the state. I don't know anyone who has never been to a GP, hospital or other NHS provision (anecdotal, I know, but surely reflective of real life).

As has been pointed out more than once on this forum, a lot of people who don't think of themselves as "scroungers" or "dependent on the state" may be in for a surprise.

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Part of the quotation from Adam Memon “The paper is about dependency on the state. Dependency does include health, education, and so on.”

In that case, the entire population is dependent on the state. I don't know anyone who has never been to a GP, hospital or other NHS provision (anecdotal, I know, but surely reflective of real life).

As has been pointed out more than once on this forum, a lot of people who don't think of themselves as "scroungers" or "dependent on the state" may be in for a surprise.

It's only when you get to the seventh decile that you get net contributors so the premise of the article is wrong. Most of us are sucking on the teat of the State and that's why we vote for massive deficits. We are worth it and F*8k future generations.

Edited by crashmonitor

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I signed on with my GP some 20 years ago. Haven't seen him since. He must owe me a decent lunch by now given how much he has made out of me. (But to be fair I was born in hospital and had my appendix out some 30 years ago so I am a user as much as everyone else)

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I signed on with my GP some 20 years ago. Haven't seen him since. He must owe me a decent lunch by now given how much he has made out of me. (But to be fair I was born in hospital and had my appendix out some 30 years ago so I am a user as much as everyone else)

I guess we all have a debt to repay for when we were born and still at school, even though I got f&&ked over; entry to school at five and a half, no places available until then, and left at 15...not quite as protracted as these days in the era of education education education. Still a debt is a debt, anything after 67 re. the retirement Ponzi would be a bonus if there is any money left.

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What a pointless article. It's as if nobody uses education or the NHS. We all use these services. They should be added as "benefits" because they're free at point of service, paid by the tax payer - just like all other benefits.

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