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I would be very very cautious before introducing a means test to PIP. Plus the purpose of it is to help with extra costs of disability. Those costs exist whether your earning minimum wage at Tesco or a merchant banker in Canary Wharf.
They do. But the merchant banker can afford to pay the costs themselves, and therefore should not be in receipt of any benefits at all. There's not unlimited money, so we have to target it at people who would otherwise struggle to afford to feed and clothe themselves, not someone who would just have to take one fewer holiday a year to afford an adapted car, or some such. (Obviously you need to take care where to draw the line, and so to avoid "collateral damage" I'd draw it higher than it might otherwise be drawn, but to use myself as an example I think it would be ridiculous for me to become entitled to PIP if I ended up in a wheelchair because I could afford to pay the extra costs of an adapted car or of selling my house to move to a slightly more expensive bungalow quite easily, and it would in no way affect my ability to do my job).
Just, indeed, as my parents receiving winter fuel allowance just means they've got an extra two hundred quid of spending money on their next cruise.
Or the situation those earning just above £100k have if they have kids needing childcare.
I am sure 99% of people think the rich should and need to pay their fair share of taxes, but I think some people forget the tax system needs to encourage people to improve, develop and get better jobs - i.e. it shouldn't be punitive.
I think we also have a problem in this country defining what rich is. Labour doesn't seem sure what a working person is.
I don't earn £100k a year and think it is certainly a decent chunk of money; but I don't think someone in London, with two young kids and in a single-income household who earns £100k is rich. Whereas, when you read some things online, there are people who believe they are no different to Jeff Bezos or Elon Musk.
The most frustrating thing of the £100k boundary is the personal allowance tapering above £100k. In England/Wales/NI it turns the marginal rate of tax on £100k-125k into a whopping 60%, before you even consider those childcare cases you mention. In Scotland, that income is taxed at 67.5%. Then you've got (currently) 2% NI, possibly 9% student loans.
By all means, those with the broadest shoulders so contribute more, but paying nearly 80% tax on income £100k-£125k I think is ridiculous.
And it was Labour (Gordon Brown) who came up with that genius tax trap.
In the childcare example, some people hovering around the £100k mark can actually end up worse off by getting a pay rise to just over £100k than by staying just under £100k. I can't see how that can be defended.
And this £45k+ thing not being a working person is nonsense and a bit scary for the economy. There are basic teachers with no leadership responsibilities who earn this. There are nurses with just a few years experience and minor additional responsibilities earning this. There are PAYE electricians and plumbers earning this.
This is where the middle class has been squeezed for a while now. Years of freezing income tax rates, reducing dividends allowances, and IR35 changes to bring more PSC workers into scope for income tax has made it difficult for some to be so aspirational. Especially when you add on 2-12% NI, and 9% student loans which for the majority of graduates will never be paid off in full.
They do. But the merchant banker can afford to pay the costs themselves, and therefore should not be in receipt of any benefits at all. There's not unlimited money, so we have to target it at people who would otherwise struggle to afford to feed and clothe themselves, not someone who would just have to take one fewer holiday a year to afford an adapted car, or some such. (Obviously you need to take care where to draw the line, and so to avoid "collateral damage" I'd draw it higher than it might otherwise be drawn, but to use myself as an example I think it would be ridiculous for me to become entitled to PIP if I ended up in a wheelchair because I could afford to pay the extra costs of an adapted car or of selling my house to move to a slightly more expensive bungalow quite easily, and it would in no way affect my ability to do my job).
Just, indeed, as my parents receiving winter fuel allowance just means they've got an extra two hundred quid of spending money on their next cruise.
Something I'd like to see is how much the covid legacy has influenced both the benefits' bill today and the rising mental health/sickness burden. I saw someone on another site outline how they had been furloughed and the combination of being paid to do nothing and not doing any meaningful work had got them addicted to benefits and had mental health problems because of no job to provide activity and social contacts. They have since overcome these problems, but if this is not uncommon, is certainly something that needs looking at. It's also a reminder of how covid lockdowns were ill-thought out regarding collateral impacts, especially when deployed relatively long-term.
Whatever is the case though, it's tempting to strike people down to get them off benefits of any kind, and/or just cut/remove them, but I think if we support and encourage those who can take a different path to do so, this will not only be more compassionate, but more successful at achieving such goals.
In the childcare example, some people hovering around the £100k mark can actually end up worse off by getting a pay rise to just over £100k than by staying just under £100k. I can't see how that can be defended.
They do. But the merchant banker can afford to pay the costs themselves, and therefore should not be in receipt of any benefits at all. There's not unlimited money, so we have to target it at people who would otherwise struggle to afford to feed and clothe themselves, not someone who would just have to take one fewer holiday a year to afford an adapted car, or some such. (Obviously you need to take care where to draw the line, and so to avoid "collateral damage" I'd draw it higher than it might otherwise be drawn, but to use myself as an example I think it would be ridiculous for me to become entitled to PIP if I ended up in a wheelchair because I could afford to pay the extra costs of an adapted car or of selling my house to move to a slightly more expensive bungalow quite easily, and it would in no way affect my ability to do my job).
Just, indeed, as my parents receiving winter fuel allowance just means they've got an extra two hundred quid of spending money on their next cruise.
In fairness I'm not necessarily opposed to the idea outright but I'm also not sure about introducing another means test with the administrative burden that brings. That was the neat thing about the change to the winter fuel payment, tying it to PC meant that means testing was already being done it could just piggyback off it. I do wonder how the new method of linking it to £35k of taxable income and being recovered via a change to your tax code with HMRC is going to pan out in terms of administrative expense! It was barmy that they backed down on that but then they'd done the politics so poorly I guess it's hardly a surprise. A theme which has continued...
Back to PIP all of the existing means tests that we have to play with (Universal Credit and Pension Credit broadly) are set at levels which are far to low for a potential PIP means test. So you'd need to set it at much higher level to be sure. Perhaps you could tie to income tax thresholds? But then you're contributing to the existing absurd cliff edges that exist within the tax system. If you do introduce a wholly new means test then that adds a whole new layer of complexity when it comes to claiming and also administering these claims.
I get the instinct and I don't necessarily disagree. I'm just not convinced the juice is worth the squeeze.
I suspect it would be far more fruitful looking at why we've got so many people claiming it now post-Covid than before and working to address those issues (and no, the answer isn't that it's easy innit, just say you're anxious and they'll give you a car and loadsa dosh like some people and the media like to claim).
Something I'd like to see is how much the covid legacy has influenced both the benefits' bill today and the rising mental health/sickness burden. I saw someone on another site outline how they had been furloughed and the combination of being paid to do nothing and not doing any meaningful work had got them addicted to benefits and had mental health problems because of no job to provide activity and social contacts. They have since overcome these problems, but if this is not uncommon, is certainly something that needs looking at. It's also a reminder of how covid lockdowns were ill-thought out regarding collateral impacts, especially when deployed relatively long-term.
Whatever is the case though, it's tempting to strike people down to get them off benefits of any kind, and/or just cut/remove them, but I think if we support and encourage those who can take a different path to do so, this will not only be more compassionate, but more successful at achieving such goals.
Agree with all that, and I would also highlight how absolutely dire NHS mental health services are in many cases - zero interest in doing anything other than prescribing medication, and their favoured practices of fobbing people off, misrepresenting situations to justify not offering any help, then telling outright lies when challenged is not likely to help anyone who is seeking their help.
I think with motability the main issue is the VAT exemption; I have no problem with the merchant banker using his PIP to contribute towards his Chiron* but don't really understand why it should be VAT free simply because he's disabled. I can understand modifications to the car required through disability being VAT exempt, but the entire vehicle?
*I appreciate Chiron isn't on motability but you don't actually need to buy through motability for the exemption to apply
I'm not sure how a subsidy can be both hidden and direct. Since UC is so dependent on the claimant's household circumstances, the evidence may be hard to find.
Agree with all that, and I would also highlight how absolutely dire NHS mental health services are in many cases - zero interest in doing anything other than prescribing medication, and their favoured practices of fobbing people off, misrepresenting situations to justify not offering any help, then telling outright lies when challenged is not likely to help anyone who is seeking their help.
I have always thought that there needs to be a separate health service specifically for mental health, manned exclusively by mental health professionals. That would then take a lot of pressure off the NHS and allow them to focus exclusively on physical, biological health etc. But that's a whole other discussion.
Agree with all that, and I would also highlight how absolutely dire NHS mental health services are in many cases - zero interest in doing anything other than prescribing medication, and their favoured practices of fobbing people off, misrepresenting situations to justify not offering any help, then telling outright lies when challenged is not likely to help anyone who is seeking their help.
Also the failure to recognise that an awful lot of overweight/obesity cases are fundamentally mental health cases, at least in part. Go to the GP for weight loss and the first visit is likely to result in a leaflet about calories-in-calories-out, cut out booze, drink sugar-free drinks and swapping chocolate bar snacks for fruit. People clearly know most of this, but struggle to lose weight nonetheless.
I have always thought that there needs to be a separate health service specifically for mental health, manned exclusively by mental health professionals. That would then take a lot of pressure off the NHS and allow them to focus exclusively on physical, biological health etc. But that's a whole other discussion.
The issue there is that even the specialist NHS mental health services (which would form the basis of any provision even if split off) are a large part of the problem.
NB: Worth noting that the sneaky trick that Osborne and Co played was when they introduced the "new" State Pension in April 2016 they set it at a rate just above Pension Credit so even just getting a normal new State Pension would be enough to ensure you're not entitled to Pension Credit. For a single person with no health conditions the current rate of Pension Credit is £227.10 per week, the new State Pension is £230.25 per week. Therefore no entitlement.
People who retired prior to April 2016 however as you say could easily end up missing out depending on exactly what their State Pension looked like and what any private pensions that you may have. But the full basic State Pension is £176.45 per week though that's often increased depending on various factors (were you contracted in/out, did you pay into the Additional State Pension, etc etc).
When the new State pension was first introduced in 2016 the difference between that and the old basic State Pension was not too great. After 10 years of paying the same percentage increase on both pensions, calculated according to the triple lock, the difference has become quite significant. Whenever the amount pensioners receive is referred to these days it’s always the new State Pension figure which is quoted. It is easy to forget that pensioners over the age 75 are getting significantly less and that difference gets even wider each year.
The merchant banker is very unlikely to bother applying for PIP if they can afford to get by without it. Why put yourself through the rigmarole of the application and assessment process in order to receive an amount of money that makes very little difference to your overall income? It's not just a case of filling in a form and receiving money in your bank account each month.
The merchant banker is very unlikely to bother applying for PIP if they can afford to get by without it. Why put yourself through the rigmarole of the application and assessment process in order to receive an amount of money that makes very little difference to your overall income? It's not just a case of filling in a form and receiving money in your bank account each month.
IME most "merchant bankers" (archaic term tbf) will take an inordinate glee in squeezing every last penny out of any benefit they're entitled to, believe me
When the new State pension was first introduced in 2016 the difference between that and the old basic State Pension was not too great. After 10 years of paying the same percentage increase on both pensions, calculated according to the triple lock, the difference has become quite significant. Whenever the amount pensioners receive is referred to these days it’s always the new State Pension figure which is quoted. It is easy to forget that pensioners over the age 75 are getting significantly less and that difference gets even wider each year.
Though comparing the pre-2016 basic state pension with the current state pension is also wrong, as that ignores the additional state pension which doesn’t exist for the post-2016 pensioners.
IME most "merchant bankers" (archaic term tbf) will take an inordinate glee in squeezing every last penny out of any benefit they're entitled to, believe me
When the new State pension was first introduced in 2016 the difference between that and the old basic State Pension was not too great. After 10 years of paying the same percentage increase on both pensions, calculated according to the triple lock, the difference has become quite significant. Whenever the amount pensioners receive is referred to these days it’s always the new State Pension figure which is quoted.
I'm not so sure. In April 2016 the new State Pension was £155.65 and the basic State Pension (before any additions) was £119.30. I would still consider that to be a significant gap! Pension Credit meanwhile was £155.60, so a single healthy pensioner who reached pension age in March 2016 would be entitled to Pension Credit (entitling them to free dental, optical care and full Council Tax reduction and maximum Housing Benefit) whilst one who reached pension age in April 2016 would miss out by 5p.
As I say, it was a clever little wheeze that Osborne came up with.
Yes once you actually understand the system it is endlessly frustrating and, indeed, infuriating watching politicians and media types get it wrong either wilfully or due to ignorance and making pronouncements on how the system should therefore work based on that ignorance.
I do sympathize with this argument - but it is also endlessly frustrating, when time and time again, the demand goes up for more tax from working people because of a lack of willingness to make any cuts whatsoever. I think we are reaching a tipping point now. This coming budget will cross the Rubicon and there will be no way back for Labour. A Reform Government, as horrendous as that may be, will follow.
The idea that there are lots of wealthy people claiming PIP is, quite frankly, laughable. If you didn’t need the money you wouldn’t put yourself through the indignity of applying for it. I know I wouldn’t. I can’t emphasise more just how unpleasant an experience it is.
As @ainsworth74 also points out, means-testing PIP just creates yet another hurdle for people with disabilities returning to work.
There are lots of things that can cause people to need to pay a bit more to live than the norm, e.g. if one needs spectacles or is allergic to something so has to pay more for specialist food.
My spectacles cost me £200, and that was for two pairs (so £100 each) on the Specsavers 2-for-1 and with the fancy anti-glare coating.
A former colleague of mine from a charity I was a trustee of has Ehlers-Danlos Syndrome. She works. Her specialist electric wheelchair cost her the thick end of ten grand.
I’ll also say that travelling with her to Board Meetings was extremely enlightening about just how poor the assistance service is on the railways.
Yes once you actually understand the system it is endlessly frustrating and, indeed, infuriating watching politicians and media types get it wrong either wilfully or due to ignorance
Most of the politicians and media do it wilfully. Look at how Starmer so quickly changed the subject to NEETs (young people not in education or work) when people criticised his proposed changes to PIP. He knows fine well that PIP is irrelevant to the ability to work.
Same with the talk of the rise of people with mental health issues getting PIP. He knows fine well that people getting PIP for mental health issues are really so ill that at the very least they’re heading towards having an intellectual disability.
I don’t agree that this is a subsidy. And, even if it is, I don’t see that it is an issue, given that the recipient of the ‘subsidy’ is someone who is disabled.
Nah can't agree with this.
Only adaptations should be VAT free.
It's morally wrong for wealthy people to get VAT and IPT free vehicles and insurance whilst people on minimum wage don't (VAT, of course, being a very regressive form of taxation). Yes, some people do have additional financial needs (e.g. car adaptations), but many do not.
It isn’t paid on disability, it is paid on how that disability affects your ability to look after yourself. The additional financial support is provided because the recipients have additional financial needs beyond those of an able-bodied person. You can work and receive PIP.
I think you are talking semantics of language here.
Obviously PIP is awarded based on each person's ability to do daily activities and their mobility. It's not wrong to say it's paid on disability.
It's actually one of the failures of PIP IMO. It should only be paid when both medical evidence and a living/ mobility assessment have been made. The Tories were very mistaken when they removed medical assessments totally from the process on the introduction of PIP.
I have always thought that there needs to be a separate health service specifically for mental health, manned exclusively by mental health professionals. That would then take a lot of pressure off the NHS and allow them to focus exclusively on physical, biological health etc. But that's a whole other discussion.
I don't know about the rest of the UK, but most if not all places in England already have separate NHS trusts for mental health. Psychiatric hospitals and clinics are often distinct (and sometimes distant) from other hospitals that deal with physical conditions. Obviously, psychiatric hospitals and clinics are staffed exclusively by mental health professionals.
What exactly do you think is not already separate?
You do realise that patients can have both physical and mental health conditions, for example someone who has self-harmed due to psychosis will need to be seen for both at the same time?
You were clearly not around to experience the mess Labour left the country in in 1979, which resulted in 18 years of Tory Government! I fear they will end up leaving the same, if not worse, mess again.
But I was around to recall the disastrous budget in 1981 which caused severe and prolonged recession with significant long term impact on uk manufacturing and industry as the Tories pursued monetarist policies driven by ill judged ideology.
Drive up unemployment to unthinkable levels too.
But I was around to recall the disastrous budget in 1981 which caused severe and prolonged recession with significant long term impact on uk manufacturing and industry as the Tories pursued monetarist policies driven by ill judged ideology.
Drive up unemployment to unthinkable levels too.
Nah can't agree with this.
Only adaptations should be VAT free.
It's morally wrong for wealthy people to get VAT and IPT free vehicles and insurance whilst people on minimum wage don't (VAT, of course, being a very regressive form of taxation
I would probably agree with a basic vehicle being free of VAT/IPT, since a vehicle is often an essential for a disabled person which it isn't for a non-disabled person who could walk/cycle etc.
What I do disagree with is higher-end vehicle models being available through Motability. The programme should be for the most basic suitable vehicle classes (like a Citroen Berlingo), if someone can afford a better vehicle then lucky them and they don't need Motability.
I would probably agree with a basic vehicle being free of VAT/IPT, since a vehicle is often an essential for a disabled person which it isn't for a non-disabled person who could walk/cycle etc.
What about people who live in rural areas with no public transport? What about people who work in the evening/ overnight?
Should they get cars VAT free too?
Though totally agree on poor suitability of public transport in terms of access/ accessibility. Improving that should certainly be a priority which perhaps VAT on Motability cars could help with.
I would probably agree with a basic vehicle being free of VAT/IPT, since a vehicle is often an essential for a disabled person which it isn't for a non-disabled person who could walk/cycle etc.
What I do disagree with is higher-end vehicle models being available through Motability. The programme should be for the most basic suitable vehicle classes (like a Citroen Berlingo), if someone can afford a better vehicle then lucky them and they don't need Motability.
Not sure how it works now, but it would seem sensible to restrict the support to the cost of a basic vehicle plus adaptations, and allow the recipient to top this up with their own funds if they want something more luxurious. For some that might have to be a non-standard base vehicle such as one that can be boarded in a wheelchair.
What about people who live in rural areas with no public transport? What about people who work in the evening/ overnight?
Should they get cars VAT free too?
Not that simplistic. We need to stop this thing where people expect to be able to live in rural areas and get urban levels of public support. If you need public facilities, move to a town. I'm not disabled, but I live in a town because I like the facilities.
Retiring to the countryside might be idyllic but it's impractical.
Of course they wouldn't, but the point is that in-work benefits are a direct but hidden subsidy to the employers who do pay poverty wages.
It's the same way that housing benefit is a direct but hidden subsidy to landlords.
My view has long been that if a business cannot afford to pay its staff a decent wage then that business is not financially viable. In-work benefits are essentially a subsidy to these businesses.
Maybe it's a valid subsidy, maybe the jobs wouldn't exist if the subsidy didn't exist. Maybe that's better for the country, at least people are only receiving some of their income from benefits rather than all of their income from benefits. But there needs to be a transparent and honest discussion about this.
This is quite nuanced. There will always be jobs that are only viable at the minimum level. The minimum level is quite adequate for those who are living with their parents, students, those with spouses/partners who have better paid jobs etc. Of course, those people would like the minimum wage double that of today......
Minimum wage jobs are likely not financially suitable for those not within those categories (got housing costs, partnered with another on minimum wage/ got children/ etc etc) that cannot or will not do better paid jobs. So the benefits are going as a social payment to those people. However, that Government intervention has the side effect of (a) disincentivising some people from seeking better paid jobs, and (b) increases the pool of minimum paid jobs because there are more people available to do the job at that price (to the employers).
As you point out - this may be a valid 'subsidy' - maybe the jobs wouldn't exist, or the production/service of these jobs would be more expensive to society as a whole which may or may not be undesirable. As you point out, it may well be better to pay some people income + benefits rather than all benefits, but it is quite difficult to draw lines. However, it is much more complex than just 'poverty wages'.
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IME most "merchant bankers" (archaic term tbf) will take an inordinate glee in squeezing every last penny out of any benefit they're entitled to, believe me
Hardly unsurprising, considering the amounts they have probably paid in over the years......
And this an issue where there is a delicate balancing act - the tax and benefits system cannot just be take from the (relatively) rich to give to the poor. The (relatively) rich need to feel that the system works for them sometimes too, otherwise they will rail against it completely. It is not just a system of 'they can afford it' - what next- a means tested NHS? There needs to be an incentive for hard work, skilled work, taking responsibilities etc. There will always be better off people who have made right choices, put in the effort (plus probably being lucky in one way or another) . It is not the right of everyone else to confiscate the fruits of this.
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