The great divide: Housing benefit cap, where do you stand?

rjsterry

JZed wrote:

You've exactly hit the nail on the head. The benefit cap is not low enough. The injustice is that there are many people out there who get a free leg up into properties, whilst hard working, tax paying families get no assistance...

...How about a government scheme where the use the £250k and build 5 houses in cheaper more sustainable areas of the UK. The government could borrow the money from the banks it bailed out, who should be happy to lend at an interest and repayment rate of £1600pm from a government guaranteed borrower.

The two groups aren't mutually exclusive there are plenty of hard working tax paying families who also receive some benefits (although obviously less than those who aren't working).

I agree building more affordable housing, so that council's didn't have to rely on private landlords to make up the current shortfall, would be a much better use of the money, as well as creating construction jobs. This doesn't look likely to happen though.

sketchley

rjsterry wrote:

Surely you mean winners?

I'm assuming that what happened was that Mr Saiidi and his family turned up at Ealing Housing Department, needing somewhere to live. They checked their lists and found that they didn't have one of their own suitable properties available, so needed to go to a private landlord. Quite how they got from that fairly reasonable starting point to renting a more than suitable house at above market rate is the real question.

Ah, sorry you misunderstood. Landlords are the looser of the policy in the subject of the email (i.e. the HB Cap.).

Also read the artical. sure it's the Telegraph but it would appear people were signing leases then turning up at the council asking them to be paid and getting it!!! Also comments that potential abuse included asking for inflated rents then the Landlord and Tenant splitting the profit.

dhope

Sketchley wrote:

Ah, sorry you misunderstood. Landlords are the looser of the policy in the subject of the email (i.e. the HB Cap.).

Loser, not looser. Loser/winner, looser/tighter. Sorry, pet hate, along with rediculous.
/pedant

hatbeard

dhope wrote:

Sketchley wrote:

Ah, sorry you misunderstood. Landlords are the looser of the policy in the subject of the email (i.e. the HB Cap.).

Loser, not looser. Loser/winner, looser/tighter. Sorry, pet hate, along with rediculous.
/pedant

thats rediculouse, losen up man

:P

rjsterry

Sketchley wrote:

Also read the artical.

:oops: I beg your pardon. For a start, I should have referred to Ms Saindi, rather than Mr.

Well, that LHA system is a good wheeze isn't it? Not really surprising that some have abused the system, although very few it seems - perhaps a handful in each borough.[/quote]

fleshtuxedo

lardboy wrote:

The standard of living for a working person should always be higher than if that same person were to stop work and rely on state handouts. Otherwise there is no incentive to work.

I like the idea of Universal Credit, a standard amount of money that is paid to every single person in the country (cheaper overall than means-testing) and you choose how you spend that money. No housing benefits, no tax credits, no jobseekers allowance. There are some incremental allowances (pensioners, severely disabled etc). The basic amount is enough to live on. Maybe £10,000 pa per adult, £5,000 per child. Not a comfy existence by any stretch, but enough to pay for a room in a cheap flat, feed youself, and pay for limited transport. If you want anything above these levels of living, then you have to find work (or go on the rob, as mentioned earlier). You get taxed on every bit of your earnings at a fixed rate (no tax-free allowances, so less admin ), but you will get to keep most of it, and you won't lose your Universal Credit.

This would provide a constant safety net and always provide an incentive to work. A dide effect is a a smaller state as there are far fewer civil servants required, which is probably why it's not put forward by those reforming benefits who have huge vested interests.

I like this ^^

I think the complexity in the current taxation/benefits system is fertile ground for cheating, corruption, false accusations, prejudice and all the other things talked about in this thread.

CdrJake

It may surprise a few people given my background but I find the extent of these changes tantamount to forced migration of the poor from the cities.

Capping the housing benefit rate will essentially force key workers out of the areas in which they are employed. It's the 'poor' who are the ones who work in our local shops, clean our streets, repair our drains...the list goes on. And yet essentially Osborne and Cameron want to kick these people out of the rich areas, their homes, all in the name of saving money.

Yes the benefits does need to be reviewed, yes there are people exploiting it, but these proposals will deeply affect the hard working people who need the additional money in order to work in high cost areas for the benefit of everyone.

I may be a conservative, and yes I am proud of it, but I also believe in looking after those who work for you, being a good employer breeds loyal employees and costing them out of their homes in the areas in which they work is not good for anyone.

jds_1981

CdrJake wrote:

And yet essentially Osborne and Cameron want to kick these people out of the rich areas, their homes, all in the name of saving money.

Aren't they just righting the social injustice of housing people where they cannot afford to live?

Also 'key-worker' is a misnomer. We're all service providers who rely on others.

sketchley

@CdrJake

"The poor" don't recieve this money though do they. This money is paid in most cases directly to Landlords. Landlord's profit massively from inflated rents. In fact most of "The poor" as you called them don't care about housing benefit or what rent they pay as the council pays it for them.

When this mass migration out of the city happens then what, who will then live in these now vacent properties, anwser is likely no one will if migrations happens and rents stay as they are now. They

Net result rents come down to what can be claimed on HB and "the poor" move back. In all likely hood as Landlord has established tenent then they will keep them just on a lower rent (i.e. what HB will pay and 400 per week is still a lot). There will be exceptions and they will be the extreem cases such as the one in the telegraph posted earlier.

I do not see this as taking from the poor, more taking from the rich landlords who have for years taken tax revenues to provide often substandard housing for the needy.

TheStone

CdrJake wrote:

It may surprise a few people given my background but I find the extent of these changes tantamount to forced migration of the poor from the cities.

Capping the housing benefit rate will essentially force key workers out of the areas in which they are employed. It's the 'poor' who are the ones who work in our local shops, clean our streets, repair our drains...the list goes on. And yet essentially Osborne and Cameron want to kick these people out of the rich areas, their homes, all in the name of saving money.

Yes the benefits does need to be reviewed, yes there are people exploiting it, but these proposals will deeply affect the hard working people who need the additional money in order to work in high cost areas for the benefit of everyone.

I may be a conservative, and yes I am proud of it, but I also believe in looking after those who work for you, being a good employer breeds loyal employees and costing them out of their homes in the areas in which they work is not good for anyone.

Why not just pay them properly?

It makes no sense the govt paying a nurse/cleaner etc 15k, then giving them another 20k in hosing benefit. How messed up is that.

Is everything so cheap in McDs or Tesco because they can get away with paying low as the govt will subsidise the workers housing.

The whole system is a mess. This is a small step in the right direction.

Or, as I've mentioned before. Stop using our taxes to support the housing market and let it fall to a level where normal workers can afford normal housing.

lardboy

CdrJake wrote:

...I may be a conservative, and yes I am proud of it, but I also believe in looking after those who work for you, being a good employer breeds loyal employees and costing them out of their homes in the areas in which they work is not good for anyone.

Perhaps the employers should stump up the additional cost? Why should national taxes paid all over the country be used to subsidise the cost of "key workers" (e.g. street cleaners/nurses/teachers/posties) in Chelsea? Surely, the employers in Chelsea should be paying higher wages, so that "the help" can live locally?

Living in mansions, paying your employees a pittance then expecting the state to help your staff is disgusting.

tailwindhome

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

No difference

Both are legally and morally fine.

That said I would like to see a drastic reduction in the level of benefits paid out.

Tailwindhome on the Scapling Osbourne Thread wrote:

MatHammond wrote:

Just out of curiosity, if a profession existed that assited people to claim benefits, by manipulating their personal income and circumstances, generally playing the system, how would people view that?

Depends what you mean by 'manipulating their personal income and circumstances'

Do you mean fabricating medical conditions to claim DLA, working 'cash in hand' while claiming to be unemployed or lying about live in partners? These are clearly illegal and any 'profession' offering this advice would be illegal, immoral and unethical.

However if you mean organising one's affairs for the maximum benefit within the law, then I have absolutely no issue with it.

Two examples

I worked in a factory which was owned by an US parent company who decided to close the plant. The employees were given what was a quite generous severance package. Many had been there for 30 -40 years and had never worked anywhere else. The company also provided some one to one financial advice as to what employees should do with their lump sums so that they could keep their severance packages and still claim benefits until they got another job or in some cases to bridge a couple of years to retirement.

My wife is currently on a career break looking after our 2yo twins. We can just about afford this as we can claim some tax credit and get child benefit. When the twins hit school age she will be going back to work (a reasonably well paid professional job). When that time comes we will sit down and do the calculation to determine how many days a week she will work. Factor will include income, benefits and child care costs as well as the practicalities of raising 4 kids. We may find that we are better off 'manipulating' her income by reducing her hours to maximise the child tax credit and child benefit we receive.

jedster

I believe the cap is right.

First, it is not that low! Quite a small proportion of families could afford to pay £1600 per month out of their taxed income. For example, say you earned £48k and paid 30% tax, you'd have £2800 gross - £1600 rent would be eating a big chunk of that. I don't think we should have a benefit system that aims to give people homes that people on £50k would struggle to pay for.

Second, I think we should expect people to move if their economic circumstances require it. We had to move a few times when I was a kid. My father lost his job when the engineering company he worked for in Newcastle shut down. We moved to the midlands where he could get a job. It was a wrench to move schools and leave friends but surely that is better for everyone than being subsidised to stay put in a house which you can't possibly afford otherwise?

Third, nearly everyone has to trade off location for cost when they are finding somewhere to live. For many of us this means we accept compromises on commuting, etc. The truly rich don't have to worry about that but almost everyone else has to... except people on benefits. Why should people on benefits expect to be exempt from the realities that everyone else faces?

I'm not saying we should scrap housing benefit but this cap is the right idea. It will be an upheaval for some people which is a real shame but I think it is necessary.


J

cee

TheStone
lardboy

Both of your comments reminded me about a documentary about walmart...which allegedly, pay its staff so that they can claim state benefits.

I think in particular it was healthcare and social housing benefits....

rjsterry

TailWindHome wrote:

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

No difference

Both are legally and morally fine.

That said I would like to see a drastic reduction in the level of benefits paid out.

It was a slightly rhetorical question, I think it's obvious there's no difference. I was pointing out that some people seemed o be arguing for one and against the other.

CdrJake

lardboy wrote:

CdrJake wrote:

...I may be a conservative, and yes I am proud of it, but I also believe in looking after those who work for you, being a good employer breeds loyal employees and costing them out of their homes in the areas in which they work is not good for anyone.

Perhaps the employers should stump up the additional cost? Why should national taxes paid all over the country be used to subsidise the cost of "key workers" (e.g. street cleaners/nurses/teachers/posties) in Chelsea? Surely, the employers in Chelsea should be paying higher wages, so that "the help" can live locally?

Living in mansions, paying your employees a pittance then expecting the state to help your staff is disgusting.

I agree, salaries should be enough to live on, however this is a capitalist economy and do you think that's ever likely to happen, no it isn't, people will always pay what they think they can get away with.

Why should poorer people be expected to travel miles into work (thus spending more of their income on travel) from the 'poor areas' just to satisfy a governments urge to save a bit of money and essentially create a new Dame Shirley Porter situation.

I always thought I was right wing, but I am positively liberal in comparison to some of the 'policies' being produced by this government.

rick_chasey

jedster wrote:

I believe the cap is right.

First, it is not that low! Quite a small proportion of families could afford to pay £1600 per month out of their taxed income. For example, say you earned £48k and paid 30% tax, you'd have £2800 gross - £1600 rent would be eating a big chunk of that. I don't think we should have a benefit system that aims to give people homes that people on £50k would struggle to pay for.


J

Not everyone is a family!

Combined earnings of £48k for a working couple gets you a lot!

jds_1981

CdrJake wrote:

Why should poorer people be expected to travel miles into work (thus spending more of their income on travel) from the 'poor areas' just to satisfy a governments urge to save a bit of money and essentially create a new Dame Shirley Porter situation.

Why should anyone have to travel more than a mile to work?

tailwindhome

CdrJake wrote:

I always thought I was right wing, but I am positively liberal in comparison to some of the 'policies' being produced by this government.

You voted Conservative

What did you think was going to happen?

Genuine question.

dhope

lardboy wrote:

Surely, the employers in Chelsea should be paying higher wages, so that "the help" can live locally?

No, that's absurd.
Areas are affluent because the people that live there earn a lot, people don't earn a lot because they live in an affluent area.

jj1048

Why should those on benefits be immune from the recession?

If I was made redundant and couldn't afford my mortgage I'd have to move to somewhere that I could afford.

Social housing rent is as high as the landlords can get away with. If the benefit cap means that the tenants can't afford it then the landlords have a choice - either keep a guarenteed albeit lower income (only slightly lower in many cases) or risk having periods of no income whilst waiting for tenants.

If the low paid workers move out of the expensive areas then who will clean the streets, empty the bins etc? It will only be a matter of time be the rats will be running riot, there'll be a plague outbreak, then the rich will move out and the poor can move back in. :idea:

lardboy

CdrJake wrote:

Why should poorer people be expected to travel miles into work (thus spending more of their income on travel) from the 'poor areas' just to satisfy a governments urge to save a bit of money and essentially create a new Dame Shirley Porter situation.

Why shouldn't they? If my job moved offices from the City to Milton Keynes, I'd make the choice whether to continue in the job or look elsewhere. I might ask the company to give me a pay-rise to cover it, which may or may not happen. I wouldn't ask for tax-payers to subsidise my travel costs. If that's where the job is, that's where you go to. If you don;t like it, then look for another job. That's how people and economies make progress.

CdrJake

TailWindHome wrote:

CdrJake wrote:

I always thought I was right wing, but I am positively liberal in comparison to some of the 'policies' being produced by this government.

You voted Conservative

What did you think was going to happen?

Genuine question.

,

Cuts were inevitable, I accepted that and expected that, however these cuts are affecting the most vulnerable in society and the only reason why they are getting away with it is because they are in coalition with the Lib Dems. They feel as though they have a mandate to do whatever they want.

However what they may have mandate to do may not be morally the right thing to do.

Whatever Osborne says about us all being 'in this together' the opposite it true, we aren't. I know from my own finances that I have not been affected by this so called spending review. I haven't gained anything but I certainly haven't lost anything.

NGale says this is 'the Tories showing their true colours', I disagree with her somewhat on this. Many conservative supporters do not believe this type of cut will be of long term benefit to anyone.

By the way, myself and NGale will never agree when it comes to politics.

lardboy

dhope wrote:

lardboy wrote:

Surely, the employers in Chelsea should be paying higher wages, so that "the help" can live locally?

No, that's absurd.
Areas are affluent because the people that live there earn a lot, people don't earn a lot because they live in an affluent area.

Tell that to every public sector employee with their London weighting.

Maybe I didn't put in the best way. If having people live locally is important to an employer, then they should enable their workers to do so. It is the responsibility of the employer, not the state, unless it is decided that people should be able to live locally, in which case this segment of the BR forum wouldn't exist.

jj1048

Not particularly relevant, but this is what £400pw gets you round my way.

http://www.rightmove.co.uk/property-to-rent/property-17176293.html

sketchley

jj1048 wrote:

Not particularly relevant, but this is what £400pw gets you round my way.

http://www.rightmove.co.uk/property-to-rent/property-17176293.html

No it's very relevant. £ 400 per week is a lot of money. I still can't understand why people think this is an attack on people on benefits. People on benefits do not get the money for housing benefit. It goes to the landlord. Often the landlord being the well off people in the posh house down the road. If we pay unlimited housing benefit all it does is push the rents up and housing prices up, that's what's happend in central London anyway.

This cap means less money for landlords. They will have to accept lower rents or they will be forced to sell, other landlords will not want to buy these rental properties as rents cannot be achieved so house prices will drop as will cost of rental for private tenents. All of which should make London cheaper to live in for lower income workers who cannot get property in central London currently. Becuase it's either high end with sky high cost or it rented on housing benefit at inflated rents.

alfablue

Where I live it gets you a 2 bed 1st floor flat

http://www.rightmove.co.uk/property-to- ... 58377.html

CdrJake

It would get you this in Dartmouth

http://www.rightmove.co.uk/property-to-rent/property-17043465.html

However it's not in the nicest area of Dartmouth, in fact quite a problem for the size of the town.

W1

Sketchley wrote:

No it's very relevant. £ 400 per week is a lot of money.

This is the key point - this whole "ethnic cleansing" rubbish is just that. £1600pcm is a huge chunk of cash. It's not like Zones 1, 2 and 3 are only inhabited by those who earn over £50k....

notsoblue

W1 wrote:

Sketchley wrote:

No it's very relevant. £ 400 per week is a lot of money.

This is the key point - this whole "ethnic cleansing" rubbish is just that. £1600pcm is a huge chunk of cash. It's not like Zones 1, 2 and 3 are only inhabited by those who earn over £50k....

You mean "social cleansing"? Don't misquote it to devalue its intended meaning. This change to benefits *will* have an effect on a large demographic resident in London. And its not the only recent tory led change that will do so. Hammersmith & Fulham has undergone some significant social change under the conservative council who have been disproportionately unfair against those on lower wages or more reliant on government services in the borough. The intention seemingly being to slowly force them out.

Anyway, we all seem to be agreed that £400 a week is too much to receive in benefits, that the rents levied by landlords are far too high, and that some people will exploit loopholes in the system.