Kevin used to be a plumber. Then he lifted a boiler in just the wrong way and suffered a prolapsed disc in his back. Now he has one leg shorter than the other and scar tissue pressing on nerves which mean he can’t lift and he can’t walk very far and he is in constant pain. He is stubborn though, and so rather than live on sickness and disability benefits he strives to go out to work fixing computers in people’s homes. It doesn’t pay very much, but it provides a small self-employed income instead of Job Seeker’s Allowance or Employment Support Allowance, which is topped up with housing benefit and working tax credits. He has a Motability car paid for out of Disability Living Allowance which enables him to get to his customers and without which he couldn’t work.
Later this year housing benefit and tax credits will be replaced by Universal Credit. Universal Credit will introduce a minimum income floor – it will assume that as a disabled self employed person Kevin brings in at least sixteen hours wages a week at minimum wage – £99. (A non disabled person is assumed to be working for thirty five hours – £216.) The problem is that although Kevin works hard, his income is unpredictable and rarely reaches £99 a week. There isn’t anything Kevin can do to increase his earnings, and with his disabilities Kevin has found it nearly impossible to find someone willing to employ him.
When Kevin is transferred onto Universal Credit, he will have to stop work.
When a person is faced with a choice of earning a very low income or living entirely on benefits, the government have decided that they should live entirely on benefits.
In any case, in 2015 Kevin’s Disability Living Allowance will be replaced by Personal Independence Payments. Under DLA Kevin was considered to be virtually unable to walk and so received mobility allowance which qualified him to spend it on a Motability car. Under PIP, Kevin can walk further than twenty metres and so he will not receive the mobility component. He will no longer qualify for the Motability scheme and will lose his car. Without his car he will have to resort to using a wheelchair or scooter and will no longer be able to get to the Job Centre on the other side of town, never mind to his customers.
Universal Credit won’t just affect Kevin. It will introduce “conditionality” which means that people who are working, but not working enough in the eyes of the DWP, will be required to prove that they are doing everything they can to earn more. If you work twenty hours but the DWP think you should work thirty five hours, you will be required to ask your boss for more hours. If they can’t provide more work, or won’t, you will have to look for another job. You will have to attend interviews at the job centre and prove that you have been looking, just like unemployed people. If you don’t satisfy the advisor in the job centre then you can be sanctioned. And lose your benefit altogether. Oh, there are some exceptions for parents of children under 13 so that they can work around school hours, but they’re not all that flexible. A parent who has a part time job will still be expected to expand it to fill every hour that their child is in school even if their employer doesn’t have any more work for them. Of course the fact that the Office of National Statistics says some three million people already want to work more hours but can’t get them seems to have passed the government by.
On top of all that, the government have decided that the minimum wage is too high. They believe that the minimum wage has hurt the economy and reduced the number of jobs available, so now they want to freeze the minimum wage below inflation, or even reduce it. They don’t seem to have realised that people on minimum wage often get housing benefit too, and tax credits, so if they suddenly earn less, those two benefits will have to pay more. Either people who work and “do the right thing” will suddenly find that work pays less, or that benefits bill that the government are so desperate to reduce will, in fact, increase.
This is the government’s idea of making work pay.