This is true - there needs to be wholesale cuts to benefits across the board - but clearly the State Pension and WFA are seemingly untouchable.
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The cost of the welfare state - challenges posed and solutions
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brad465
Veteran Member
There are now proposals for parents to lose child benefit as part of a sentence for crimes committed by their children. Putting aside why this isn't already the case, this is where I think some forms of welfare should actually remain, so some form of leverage could be made out of it, and is why I thinking lifting the child benefit cap has upsides beyond more money for 3+ child families - if successive children misbehave but are not in receipt of child benefit, there's no financial incentive to discipline them:
www.bbc.co.uk
Parents could face prison for child's crimes under justice reforms, minister says
The reforms to Parenting Orders could also see parents losing benefits, Jake Richards MP told the Times.
www.bbc.co.uk
No doubt the more sanctimonious types will be pleased by this, but given the clear link between poverty and crime, I struggle to imagine that it will actually solve the problem or save any money in the longer-term.There are now proposals for parents to lose child benefit as part of a sentence for crimes committed by their children. Putting aside why this isn't already the case, this is where I think some forms of welfare should actually remain, so some form of leverage could be made out of it, and is why I thinking lifting the child benefit cap has upsides beyond more money for 3+ child families - if successive children misbehave but are not in receipt of child benefit, there's no financial incentive to discipline them:
Parents could face prison for child's crimes under justice reforms, minister says
The reforms to Parenting Orders could also see parents losing benefits, Jake Richards MP told the Times.
Tough on crime, not not on the causes of crime.
Doesn't quite have the same ring to it.
I wonder what provisions there will be for parents to argue they've done what they can but effectively have no control over their children any more. There is a local business I know of which was targeted by Facebook posts from someone saying this business is run by X, mother of Y, who you can see here nicking phones on his unlicensed motorbike he's not even old enough to ride. The business had to put a post on their page to say X has done everything they can to get Y under control, including social services, reporting him to the police, and everything in between. But he's a teenager and when he heads off to school I've got no control over him then going to nick phones and he doesn't keep the motorbike at home so I can't even take that off him. Penalising that parent would in my view be unfair. He turned 16 a couple of days ago and has moved out apparently so there really is nothing she can do now.
WFA is 100% reclaimed by HMG from anyone earning above £35,000 so is hardly untouchable and is effectively means tested. There is also the option to simply opt out.
Personally, I’m happy to pay more tax. What are you prepared to sacrifice?
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Merle Haggard
Established Member
Because I also have a rail pension, my state pension is included in the income for tax purposes once the total income is above the personal allowance. This is unusual for a benefit, as far as I can see - for instance child benefit isn't taxed until possibly £100,000.
For WFA it's considered that if your income is over £35,000 you don't receive it - it's means tested. But the level at which means testing cuts in for child benefit is £100,000.
It also seems to me that 'Motabilty' is neither means tested nor taxed.
Which approach is wrong?
For WFA it's considered that if your income is over £35,000 you don't receive it - it's means tested. But the level at which means testing cuts in for child benefit is £100,000.
It also seems to me that 'Motabilty' is neither means tested nor taxed.
Which approach is wrong?
Egg Centric
Established Member
Means testing is always wrong imo. At the high end because it removes incentives to get rich and at the low end because it's demeaning and often bites the most vulnerable.
"Because I also have a rail pension, my state pension is included in the income for tax purposes once the total income is above the personal allowance. This is unusual for a benefit, as far as I can see - for instance child benefit isn't taxed until possibly £100,000."
Your state pension isn't a benefit it's a pension, a part of your income, and for some people most of their income and so it gets taxed. You can't have a welfare state without tax.
And we could save a lot of argy-bargy about the triple lock if we took a lot of the stuff that's nothing directly to do with energy out of standing charges in energy bills and let it go into general taxation where the better off would pay more than the poorest. At present the widow with her mite (the state pension) pays as much as whoever you care to mention with a lot of money. This would save an awful lot of faffing too.
Your state pension isn't a benefit it's a pension, a part of your income, and for some people most of their income and so it gets taxed. You can't have a welfare state without tax.
And we could save a lot of argy-bargy about the triple lock if we took a lot of the stuff that's nothing directly to do with energy out of standing charges in energy bills and let it go into general taxation where the better off would pay more than the poorest. At present the widow with her mite (the state pension) pays as much as whoever you care to mention with a lot of money. This would save an awful lot of faffing too.
Rather like the care abroad thing above, Motability is not a benefit as such but rather a way of using mobility allowance (an existing disability benefit) toward a car. There are some tax advantages but these are relatively minor.
The issue is not the existence of these schemes per se but rather the number of people receiving disability benefits in the first place. When people used it to buy BMWs it obviously raised eyebrows; now that's been stopped but it hasn't saved any money since those same people still have a mobility allowance (or other package of disability benefits) that is presumably more than they truly need.
The Times ran a story on the OBR's projection that the amount of payments under PIP will double by 2030:
While some of this is reallocation I feel it's pretty clear the disability bill is increasing in a way that is unaffordable; if something isn't done to try to remove people from this net (whether treatment or tightening qualification), my concern is that the most disabled people will suffer the most, as disability benefits will be squeezed across the board to make the sums add up. I'd much rather those who are most disabled get a far more generous package than broadening the eligibility and diluting the support.
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Merle Haggard
Established Member
Section (1) (1) of the Pensions Act 2014 disagrees with you. It defines the State pension as a benefit.
It also adds considerable complexity... (Which the most vulnerable are often the least able to cope with)
But a simplistic view likes means testing. There were those who wanted the 2022/23 fuel subsidy to be means tested even though the admin cost would have far outweighed the saving (energy companies administered the subsidy and they don't know the income or savings of their customers)
"Section (1) (1) of the Pensions Act 2014 disagrees with you. It defines the State pension as a benefit."
I think it's your interpretation that gives rise to the disagreement. The statute doesn't define the state pension as a benefit it describes it as a benefit which it is. As is free education, healthcare and various other things. But the state pension is chargeable to tax and that's not the case with what we generally understand as benefits. PIP, for example. Interesting argument but I don't want to find myself way of topic.
I think it's your interpretation that gives rise to the disagreement. The statute doesn't define the state pension as a benefit it describes it as a benefit which it is. As is free education, healthcare and various other things. But the state pension is chargeable to tax and that's not the case with what we generally understand as benefits. PIP, for example. Interesting argument but I don't want to find myself way of topic.
Some benefits are taxable, contribution-based JSA and ESA for example.
But I think the main thing that makes it a benefit is that what you get out of the state pension has no relation to what you paid in. You could have paid in hundreds of thousands of pounds of NI over your working lifetime, but you’d get the same state pension as someone who has been on benefits their whole life.
Whereas a ‘proper’ pension there is generally a fund that you have paid into and if you pay in more you will get more out. (This is a general principle, I know there are exceptions)
Tetchytyke
Veteran Member
It's not that unusual, there are quite a few welfare benefits which are taxable. This includes Jobseeker's Allowance.
Motability isn't a benefit. It is simply a way of a disabled person choosing to spend their Personal Independence Payment. PIP isn't means-tested or taxed as it is a benefit which is paid according to the nature of the disability.
Sadly the whole Motability thing has been a case of public vibes overriding factual accuracy. "People getting beemers for free!" has stuck as a message, no thanks to the cretinous Rachel Reeves, despite the fact that that message has little or no basis in reality.
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PIP is tested according to the nature of a person's disability. If you can't do certain things (e.g. wash yourself, cook for yourself, walk unaided) then you are entitled to PIP. The amount of PIP you receive depends on how severely affected you are by your disability.
Yes, theoretically a billionaire can receive PIP, but in reality people who don't need the money don't put themselves through the trauma of a PIP claim. It is a difficult benefit to receive.
As I've said above, the whole Motability thing was a case of vibes overriding facts. Of course restricting the scheme hasn't saved any money. That's because it didn't cost any money in the first place- Motability generated significant surpluses each and every year.
Primarily this was because people didn't "buy a beemer," they leased it. In many cases, they also put a significant advance part-payment down from their own money and, crucially, they didn't get that money back at the end. At the end of that lease, Motability sold the car. The lease payments plus the revenue from the secondhand car sales was higher than the costs of running the scheme. Motability wasn't always the cheapest way of leasing a car either. My ex receives PIP and she found that it was significantly cheaper for her to use her PIP for a commercial Personal Contract Plan (PCP) from a mainstream dealer rather than the Motability scheme.
An intelligent Chancellor would have leaned into all of this and found a way of extracting more money back out of the Motability scheme for the benefit of taxpayers. Instead, we had Rachel Reeves.
More widely, if more people are needing disability benefits perhaps it is time to question why. If disabled people can't work then how can we support them, and support employers, into getting them back to work? Issues relating to mental health are increasing: why? What is happening that means people aren't getting the treatment and support they need for the mental health issues before they collapse so entirely that they cannot work? Maybe the fact that the waiting lists for mental health therapies can be measured in years might have something to do with it? Maybe the fact that schools have no money to support pupils in mental distress might have something to do with it?
Kicking someone's crutches out from under them doesn't make them walk again. It doesn't even save any money. It just moves the expenditure from one budget line to another.
Poor people have shorter lives and have more significant health problems in those shorter lives. An intelligent politician would understand that, they'd understand that investing in getting people proper support at an earlier stage would save us lots of money in the long time.
Instead we get a right-wing race to the bottom. Kick disabled people harder. It's not worked yet, even right back to the days of the workhouses, but maybe one more kick and we'll cure them. No wonder the country's screwed.
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Well it doesn't provide "free beemers" but the underlying benefit does provide the money for people to lease them. The 'solution' of making luxury cars ineligible has just dealt with the symptom not the cause; from my perspective some people are still receiving money they don't truly need and which, as per this thread, we can't afford to give out.
Any government, left or right wing, will have to control the welfare bill at source. In respect of disability benefits, the bill for which is rising at an alarming rate, they can either do it by restricting eligibility, or by broad cuts (or lack of increases) to the overall benefit levels. Starmer's government was set to do the latter (and in fact did to an extent).
There is no third way where the benefits bill can continue to rise at its current rate, it's about choosing the method of reducing it that does the least harm. The default will undoubtedly be widescale cuts and fiscal drag because it's easier and less controversial, so that's what you'll get (from this government or the next one) if you don't support an alternative; that's less progressive than working to tighten eligibility so those who most need support still get it at the current (or even higher) levels.
Bletchleyite
Veteran Member
Disabled people aren't the actual issue*. The issue is staring us in the face - the state pension and elderly care for the Boomer generation - but Reform won't go near that because it would lose them votes.
With people living longer all the time, this aspect of welfare is in effect a Ponzi scheme that requires massive ongoing immigration, as people already here aren't having enough kids to sustain it.
But we aren't willing to have the difficult conversations. I'd actually like to see a sensible debate about what the UK's population should be (ideally about 60-65M I reckon) and what we would have to give up or achieve to sustain a slow population decline over the coming 50 years or so to get back to that happy point where public services could keep up with the population.
* Though I think we should be better at re-training people who can't do their old, more physical job any more due to injury or disability or even just because the industry doesn't need them any more. For a slightly different example, we import tradespeople but we're about to have mass redundancies in IT because of AI - why aren't we pushing training those people in the trades so we can stop the import of skills and grow our own?
Tetchytyke
Veteran Member
Why do you think they "don't truly need" the benefit? Because they, or their families, could afford the co-pay?
You are only able to use the Motability scheme if you receive the enhanced rate of PIP mobility component. To get this, you need to score 12 points in total across these two descriptors:
You will note the phrase "move using an aid or appliance" for the higher points totals. This includes walkers, walking sticks, wheelchairs, even prosthetic limbs. If you have no legs but you've learned to walk on prosthetics, or you can wheel yourself in a manual wheelchair, then you don't qualify for the enhanced rate.
I always copy these and then ask one simple question: where do you disagree with the current points scoring? Where would you cut?
Or- hear me out- they can fund interventions before people reach the stage that they are so severely disabled that they require this benefit. Neurodiversity seems to be the latest target. Imagine that we funded CAMHS properly and helped neurodivergent children learn essential life skills at school. Maybe, just maybe, they wouldn't reach adulthood without being able to cope and maybe, just maybe, they could be in work rather than stuck at home.
Kicking someone's crutches out from under them doesn't make them walk again. They still have those needs and they still require that support. You can restrict benefit eligibility even further, yes, but that doesn't change the underlying needs and doesn't change the underlying consequences if those needs aren't met. All it does is move the cost from one budget line to another- sure the welfare bill is a bit smaller, but they're at the GP more often, they're on more medication, they're needing more intensive treatment. You think that is all free of charge to the taxpayer?
Indeed. Labour cut a relatively modest benefit from the wealthiest pensioners and the meltdown was unbelievable. Imagine what would happen if they suggested getting rid of the Triple Lock. The Triple Lock is the single most imbecilic welfare decision made by any government in the last thirty years but it is completely untouchable. But here, let's whinge about disabled people using their own money to rent a BMW instead.
Social care is the big elephant in the room. To be more precise, the privatisation and outsourcing of social care is the elephant in the room. The private equity vultures controlling most of the adult social care sector have a profit margin of 15% to 20% once you factor in the rent payments and debt payments made to related companies. In the children's social care space, it is over 23%. We need to cut welfare spending, why not start there?
That is simply democracy at work with the policies that get a majority vote leading the next government. Your solution is clearly not a majority viewpoint - Currently.
Bletchleyite
Veteran Member
It is a problem with simple democracy, absolutely. It is probably the least worst form of Government, but it leads to this sort of thing where the majority wish is not what should happen.
With FPTP we don't elect governments who get majority votes. We also don't vote on individual policies, we vote for the manifesto that represents the best fit.
Bletchleyite
Veteran Member
True, but if Reform were realistic about what the welfare problem actually is rather than scapegoating people with Motability cars and the likes they wouldn't win anything as Boomers aren't going to accept that their generation is the issue* even if it is.
* Not by choice, but they will probably be the most privileged generation ever to live, and because of their relative longevity their kids won't get the benefit of their money until late enough in life that it's just a holiday and car fund for most. There really should be some sort of tax incentive for doing "bank of Mum and Dad" to help kids buy houses in their 20s.
Tetchytyke
Veteran Member
Yes. Turkeys are not going to vote for Christmas. Boomers aren't going to vote for their own pension to be cut. It's why Reform are doing so well with that demographic: Reform say that the issue isn't the pension bill, the issue is those brown people and those young kids pretending to have ADHD.
Meanwhile, nobody is able to do what is needed to fix this mess because it would be electoral suicide.
And yes, we all have a certain amount of self-interest. I find it deeply unfair that I am unlikely to be able to retire before I am 70 even though I am paying the pensions of people who got to retire at 60. If a politician promised to sort this unfairness I'd be all ears.
There is an argument to be made about means-testing PIP. It isn't one I agree with because I think the basic premise should be on the basis of the disability and not on the basis of wealth. I think it would be a very slippery, and very dangerous, slope to go down, as exactly the same premise could be applied to most of the healthcare sector. Oh we're not going to pay to replace your hip on the NHS because you have ten grand in the bank, only come back to us when you've not got a pot to piddle in.
Luckily the economic genius that is Rachel Reeves has solved this problem for us by pushing these people to the private sector instead. Motability are no longer able to make a bit of money off these people but the private sector PCP providers are. Well done Rachel.
Bletchleyite
Veteran Member
The real solution here is to make the State pension and elderly care system actually contributory, with the pump primed through a windfall tax of some kind or a set of them, possibly combined with a fairly hefty inheritance tax with a commitment to reduce it back once the pump has been fully primed. Then each individual in effect sorts themselves and the Ponzi scheme is removed.
It's too big and too brave for politicians though.
The other one I'd like to see is mandatory unemployment insurance to replace Jobseekers Allowance (and paying quite high at the start so people don't lose homes, e.g. 80% of pay like COVID furlough but reducing over time) and related benefits as well as stuff like redundancy pay. It would massively enable small business for one if they didn't have to be responsible for this kind of stuff.
The Pension auto-enrollment is the longer term enabler to get rid of the State Pension, so that is already solved albeit 20 years hence. I do feel for the younger generation, they have to pay record highs of tax to fund pension pots for money they will never get themselves. I think they will soon come up with other words to describe the Boomer Generation.
Health spending is a bigger issue than adult social care and the state pension combined:
OBR’s Central Fiscal 50 year Projection: source
Government spending going from roughly 40% to 50% of GDP means 25% increases in tax. There's some good discussion of this at https://mainlymacro.blogspot.com/2026/08/long-term-fiscal-projections-are-good.html
OBR’s Central Fiscal 50 year Projection: source
% of GDP | FY 2030/1 | FY 2075/6 |
Health | 8.4 | 13.5 |
Adult Social Care | 1.2 | 1.8 |
Education | 4.3 | 3.4 |
State Pension | 5.0 | 8.6 |
Other welfare benefits | 6.2 | 6.4 |
Public sector pensions | 1.2 | 0.9 |
Defence | 2.7 | 3.5 |
Other | 10.9 | 10.6 |
Total | 39.8 | 48.6 |
Government spending going from roughly 40% to 50% of GDP means 25% increases in tax. There's some good discussion of this at https://mainlymacro.blogspot.com/2026/08/long-term-fiscal-projections-are-good.html
Bletchleyite
Veteran Member
It's not. Our health spending as a percentage of GDP is lower than most other countries with universal healthcare. It's just an inevitably high cost.
We could do better with preventative healthcare though which would bring it down a bit.
If your argument is to bin universal healthcare to save money, then the US is thataway <---. No European would countenance that as universal healthcare (whatever model you use for it) is the mark of civilisation, and any minor cost-savers on it e.g. a tenner for a GP appointment is tweaking round the edges.
By the way if you do go fully US style commercial, that cost doesn't go away, it's just hidden from public spending figures. Indeed the US healthcare approach costs a far larger percentage of GDP than ours does, and with poorer outcomes too!
My point is that health spending increases more than state pension and adult social care combined do. All are a result of an increasing elderly population. Yet health spending rarely comes up in discussions about pensions even though it's the same problem; it relies on younger working generations to pay for the elderly's healthcare.
Bletchleyite
Veteran Member
To be fair there are some VERY difficult discussions in there which we don't seem mature enough to have, such as assisted dying, i.e. "why do we keep paying for healthcare of people who have decided they have had a good innings but are no longer in sufficiently good health to get anything out of continuing in life at huge financial cost".
I always found it curious that in some ways we are kinder to animals than people in that sort of context.
The idea that we put huge sums of money into keeping alive, and caring for, people who have no wish to still be alive and no prospect of improving their medical condition strikes me as downright strange. I'd have far less fear of old age if I could decide when my life no longer brings value to me.