Evidence shows Labour’s decision to means-test WFA will hit poorer pensioners too


by Paul Cotterill    
2:52 pm - June 4th 2013

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Sunny says that a key argument being deployed in favour of keeping universal winter fuel allowance, by the likes of Peter Hain is specious:

There is no evidence that offering universal pensioner benefits preserves support for universal benefits more broadly. Basically, people support benefits they get, but not other types of benefits such as for the unemployed or low paid.

Indeed, hurrah for evidence-based policy.

Here’s more evidence, from HMRC’s 2010-11 review of the take up of Child Benefit, Child Tax Credit ad Working Tax Credit:

The central estimate of the Child Benefit take-up rate in 2010-11 is 96 per cent.
The central estimate of the Child Tax Credit caseload take-up rate in 2010-11 is 83 per cent.
The central estimate of the Working Tax Credit caseload take-up rate in 2010-11 is 64 per cent.

That is, take up be families who are eligible for benefits are much lower when they are mean tested, and even lower when that means testing becomes complex.

Then there’s Free School Meals

More than a quarter of children entitled to free school meals take a packed lunch instead because they fear being stigmatised, according to a study by the Institute for Social and Economic Research.

The idea, then, that a means testing policy for winter fuel targeted at the richest pensioners will end up just affecting the richest pensioners is fanciful; the much greater effect will be on pensioners who, for whatever reason or set of reasons, don’t feel able to submit themselves to the means-testing process.

It is also reasonable to conjecture that there will be a negative correlation between vulnerability/poverty and take up.

Of course, in a more socially just we wouldn’t need winter fuel allowances at all, because fuel would be affordable to the poorest, but given where we are it is highly irresponsible for Labour to be signing up to policy which may result directly in cold, dead pensioners.

But cold, dead pensioners aside, the continuing distance in the Labour party between policymaking and the reality of policy implementation – of the type which brought us the Lord Freud Welfare to Work Narnia in 2008 – continues to be a disappointment.

This was the kind of thing that wasn’t supposed to happen after the Refounding Labour process, because policy was supposed to become grounded in the experience of those implementing that policy and those living with its consequences.

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About the author
Paul Cotterill is a regular contributor, and blogs more regularly at Though Cowards Flinch, an established leftwing blog and emergent think-tank. He currently has fingers in more pies than he has fingers, including disability caselaw, childcare social enterprise, and cricket.
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Story Filed Under: Blog ,Equality ,Fight the cuts ,Local Government


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Reader comments


1. Shatterface

There is no evidence that offering universal pensioner benefits preserves support for universal benefits more broadly

Which is correct: people don’t support the rights of other peopleto get the benefits they, themselves, recieve as they generally think everyone else is a thieving scumbag.

Which is why the argument for universal benefits should be based on the savings in admin costs.

This is a useful blog post, but it responds to a different point than the one I was making.

My point was about support for universality. This is about whether means-testing hurts people unintentionally. Both points can be valid.

It is also the case that the older people get, the more likely it is that their memory and other mental faculties will decline. Once there’s means testing and what? an annual means tested application, how many will simply forget to re-apply?

And don’t I recall the same arguments about “this is not an attack on universality”, when universal child benefit was scrapped?

Well it didn’t take long for that to be nullified.

Means testing does not target those of means. It targets everyone.

5. Luis Enrique

I can’t recall link but remember seeing research showing that simply asking people, no real “testing”, gets good accuracy at low cost.

so have a benefit claim form mailed to everyone that simply says

“return this form to claim your allowance”

on that forms say “tick here if you have income above £X”

and don’t send money to those who tick.

greedy quick witted rich pensioners will realise that if they don’t tick, they’ll get allowance but likely to be small number, most will effectively voluntarily opt out. Does not require any testing, evidence of income, complexity etc. nothing to stigmatize anyone.

6. Shatterface

greedy quick witted rich pensioners will realise that if they don’t tick, they’ll get allowance but likely to be small number, most will effectively voluntarily opt out. Does not require any testing, evidence of income, complexity etc. nothing to stigmatize anyone.

Where there’s any attempt to target benefits bureaucracy will follow.

Give them an inch and they’ll stamp, file, colate, index and pie-chart it, input it on a national database that costs billions but doesn’t actually work, then download it to a laptop and leave it on a train full of reporters.

7. Renie Anjeh

Perhaps I am just being terribly stupid, but I do not understand how removing Sir Richard Branson’s Winter Fuel Allowance will hit poorer pensioners. If the argument is related to take-up then that is really the fault of the individual for not claiming what they are entitled to, not the fault of the state. There is nothing progressive, leftwing or Labour about spending money on benefits on a group of people who quite frankly do not need it, universalism needs to be modernised for a time of austerity – i.e. universal services prioritised above universal benefits.

@7

Was it very Labour when David Freud was hired to design policy with exactly those justifications, knowing exactly what the consequences would be for making benefits more difficult to claim?

It’s really the standard excuse and it’s old; even the corn laws were justified with it by pinning individual responsibility on the people starving. It was the poor’s fault for refusing to pay the market price after all.

9. Donpaskini

“It is also reasonable to conjecture that there will be a negative correlation between vulnerability/poverty and take up.”

What is the evidence to support this conjecture? An alternative theory would be that people are less likely to take it up if they don’t need it.

In terms of outcomes for pensioner wellbeing, the evidence might suggest 85-90% takeup with means testing (assuming higher take up than CTC due to simpler test, though greater reluctance to claim amongst older people). Do you think that the difference between this level of takeup and 96% takeup (assuming equivalent takeup at present to child benefit) is worth spending £100 million on? I would imagine that spending the £100 million on, say, social care would make a far, far greater difference in terms of preventing harm caused by poverty amongst pensioners.

10. ludicrous pseudonym

why not means test the NHS? why not means test education? the sums of money involved are far greater and surely if it’s ok to take from the rich then we’re all cool with that?

alternatively, why doesn’t Balls grow a pair and commit to scrapping Trident which would save around £20 billion, increase the top rate of tax if he is concerned about rich folk having too much, and commit to reversing the privatisation of the NHS and workfare programmes (for a couple of starters)

The most depressing thing about this is that it’s following the Tory agenda. Pinky-blue is just crap, no wonder people are disillusioned. Don’t even suggest its some sort of middle ground when the government is dominated by radical righty ideologists.

Where is the discussion of the merits of Trident in our spending? On the future of all of our armed forces now they have been cut so badly? On tax reform? On business reform including the lamentable llps? There is simply no vision or hope in this agenda, just same old same old.

12. Paul Cotterill
13. John Ruddy

I think there is some confusion here – I dont recall Ed Balls saying that WFA would be means tested – just that it would not be paid to rich pensioners.

The interesting way he referred to these rich pensioners indicates how this might be achieved – they were classed as those paying higher and highest rates of income tax (ie 40p and 45p).

So rather than means testing, could this moneny not be recovered by increasing the tax paid by pensioners on those tax rates by £300 a year? This also has the advantage of not incurring the costs of means testing. If that was the case, then how on earth could this hit poorer pensioners?

14. donpaskini

@Paul – thanks, that’s useful. So a v quick equalities impact assessment on this proposal might suggest the following by way of mitigation:

- monitor to see how take up rates are affected, and in particular if there is evidence that people who need it are deterred

- Set aside, say, £5 million in the first year for take up initiatives focused at groups particularly likely to be eligible but not claim.

- Review after year 1 to see if further changes are needed

People who support benefit cuts are filthy scum who should be locked up


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