Benefit cuts hit 27 million

Submitted by Matthew on 13 February, 2013 - 7:49

Over 27 million people will be affected by the benefit cuts due to kick in from April. 11.5 million children will be among them. The cuts will hit at least 9.5 million out of the UK’s 22 million households.

Labour leader Ed Miliband has focused on the “bedroom tax”, a cut in housing benefit for all council or housing association benefits who are deemed to have spare bedrooms.

“He is making disabled people in council and housing association homes pay more when they need more space due to their disability. Divorced parents whose kids come to stay are being affected. Grandparents will pay more.

“And on the same day as this bedroom tax comes into effect he is giving thousands of millionaires a tax cut of £100,000 a year. It is the economics of a man who listens only to a small group of his rich and powerful friends”.

31% of working-age housing benefit claimants in the social sector will lose money, an average of £14 a week.

A raft of other changes are also due to start in April. The most wide-ranging is the Government’s cap of one per cent on increases in most working-age benefits and tax credits for three years from 2013-14. If inflation continues at its current rate of about 3% a year, that will mean a real terms cut of 6% for all claimants by 2016-7.

For example, a single parent primary school teacher with two children stands to lose £424 a year by 2015.

From April, most unemployed and low-waged people who currently get full council tax benefit will have to pay some council tax, probably about £5 a week. The Government has abolished council tax benefit, replaced it by “council tax support” to be administered by local councils, and cut the money available to councils for it to 10% less than they currently pay in council tax benefit. Most councils will demand a payment even from the unemployed.

Disability Living Allowance for working-age people will be replaced by Personal Independence Payments. The Government’s own estimate is that harsher criteria will throw 500,000 people off benefit by 2015-6.

This will happen in phases. New claimants for DLA will be switched to PIP instead from April this year in some areas, and June in others.

People already claiming DLA who report a change in circumstances will be switched to PIP from October 2013. The rest will be switched from 2015.

The Government’s cap on each household’s total benefits will also start to kick in. This will especially hit large households living in areas of high housing costs. Like the child benefit cut-off, the cap threatens to cut deeper and deeper as inflation progresses.

Since January 2013, the Government has cut child benefit for households where someone has an income over £50,000. The measure incorporates no schedule to increase the £50,000 threshold (or the £60,000 threshold for complete cut-off of child benefit); so in ten years’ time, this cut could affect households where someone has only the average pay rate for workers with over ten years’ experience in their job.

The cuts hit people over the whole range. Pensioners, so far, have held their own better than younger people, because pensioners mobilise, protest, and vote more than younger people. The poorer and younger are hit hardest.

One survey estimates:

• The average person will lose £467 per year from the whole package of cuts.

• People in poverty will lose an average of £2,195 each.

• Disabled people will lose an average of £4,410 each.

• People with severe disabilities will lose an average of £8,832 each.

At the same time the Government has cut the top rate of income tax and the rate of corporation tax. The total benefit cuts are as much as would be got by a 4.5% supertax on the incomes of the top 10% (not touching their wealth), or a 0.4% tax on their wealth (not touching their income). But, far from putting even those small squeezes on the rich, the Government is making them better off by cutting their taxes.

The aim is to create an economy where millions are desperate for any sort of job, and will do “workfare” for zero wages, or toil for very low pay, and where the slightest beginnings of recovery from slump will bring double-zooming profits to the top one per cent.

To their shame, neither the unions nor the Labour Party have organised any large demonstrations against these benefits. But a little flurry of local meetings and protests is starting to develop.

Tax the rich! Expropriate the banks! Reverse the cuts! Make decent jobs for all, at a living wage!

Workfare is against the law!

High Court judges have ruled that the regulations under which most “workfare” schemes were created are unlawful.

Unemployed workers Cait Reilly and Jamie Wilson have won landmark appeal cases that ruled that schemes which forced them to work for free or risk losing benefits contravened laws prohibiting forced labour.

The ruling means that people currently working on “workfare” programmes could walk off the job and claim money back from the government.

Solicitor Tessa Gregory, from the firm which represented Reilly and Wilson, said: “This judgment sends Iain Duncan Smith back to the drawing board to make fresh regulations which are fair and comply with the court's ruling.

“Until that time nobody can be lawfully forced to participate in schemes affected such as the Work Programme and the Community Action Programme.

“All of those who have been stripped of their benefits have a right to claim the money back that has been unlawfully taken away from them.”

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