It is received opinion that a significant proportion of people on Incapacity Benefits are malingering; that is, they are capable of work, but choose instead to live off benefits instead. The stated ambition to get a million people off Incapacity Benefits (more than half of the current beneficiaries) suggests that the government at least wants us to believe this is the case. And listening to the conversations that arise among ordinary folks, it certainly seems a commonplace perception; a lot of us are simply on the scrounge.
But we're not. I don’t know of course, there are surely some malingerers out there and certainly reforms are needed, including changes which would be of genuine help to disabled people to enable them to work or at least do some work. A major flaw with the current system is a failure to acknowledge any middle ground between the working-week and the scrapheap; it is often safer and financially more rewarding to do nothing at all than attempt a little bit, if a little bit is all that a person is capable of.
However, the idea of widespread malingering is damaging to all disabled people. And I know it is the height of vulgarity to talk about money, but I am afraid the only way I can argue against this untruth is with the use of gratuitous maths.
I have to simplify this a bit, because the benefits and tax systems are immensely complex and individual’s personal circumstance can vary widely. Once I made the assertion that it always pays to work and someone replied with their own figures, which incorporated a significant private pension. However, I don’t feel that it is those in receipt of ill health pensions who commonly stand accused of malingering; after all, these folks have had to prove to a commercial organisation that they are not only unable to work, but they will never be able to work again.
The stereotype of the malingerer would be someone of low socio-economic status who is unlikely to be able to earn a great deal of money in any case. So we’ll go with the stereotype. I shall also make them single and childless for simplicity.
The minimum wage for people aged 22 or over is £5.35 an hour. So say I do a 40 hour week at minimum wage – a rock bottom job - that’s £214 a week. According to this tax calculator, I would be left with £179 after tax and NI.
If I were a single person and a tenant (after all, £179 does not pay a mortgage), I would be entitled to Housing Benefit. I would receive my ‘eligible rent’ (i.e how much the council think I ought to be paying for the minimal standard accommodation) less £23.35.
This leaves me with a net income of £155.65 a week after rent.
The highest rate of Incapacity Benefit (i.e that payable after you have been unable to work for year) is currently £78.50 a week. People on Incapacity Benefits are not eligible for Income Support or any other concessions like free prescriptions. There are other benefits that disabled people claim, but none of these are related to capacity to work.
If I were a single person and a tenant, I would receive my ‘eligible rent’ less £7.40, leaving me with a net income of £71.10 after rent.
Thus, it pays to work. Earning the absolute minimum a person can earn full time, it pays £84.55 a week, or four and a half thousand pounds a year. Which is significant. Plus, all the non-financial benefits and freedoms associated with being in work. Which are also significant.
Arguably, people in work have more expenses, such as transport and buying suitable attire. However, people out of work have to find things to do with themselves all day, every day, and we could argue about exactly what the precise difference might be until the cows come home.
But, there are three important points about this which may explain why some people may be on Incapacity Benefit when they shouldn't be:
1. It may be better to be Incapacitated than Unemployed
Jobseeker’s Allowance (Unemployment Benefit) stands at £57.45 and is paid on condition that a person signs on every week. People on Jobseeker’s Allowance must prove that they are looking for work.
So, a long-term unemployed person stands to gain up to £20 a week (after a year), and free themselves from a great deal of hassle if they can prove that they are unable to work due to ill health. Being disabled does not necessarily mean a person is incapacitated for work, but if poor access and discrimination make it difficult for them to gain employment, then one can have some sympathy with their choosing to claim that their health problems are more limiting than they actually factually are.
Disability is not the only factor in this; folks subject to age discrimination or people living in areas with very high unemployment could also succumb to this temptation – if indeed they haven’t been actively encouraged by authorities wishing to reduce unemployment statistics.
2. Most fraud involves claiming Beneift and working anyway.
This is the only way that fraud could actually pay; there’s no economic reason to stay at home on benefits when one can work, but if one is fit enough to work, one has managed to wangle a successful claim for Incapacity and one has one's moral fibres in a tangle, there is money to be made by playing the system.
However, the truth is that folks who do this are probably not that organised or calculating. I imagine the sort of thing that happens is that a person is genuinely incapacitated for a period of time, but their condition improves, they go back to work and simply neglect to inform the appropriate agencies of the change. If they are hard-up, they may feel that they simply can't afford to let this money go. But it is a great naughtiness and folks who do this risk prison.
3. Some people believe everything they read.
If a person were to believe everything they read, they may well think that a life on benefits is a life of luxury. If such a person was not very good at maths, then they might well consider giving up work and feigning a medical condition in order to enjoy the delights promised to them. Well, it could happen...
On the subject of fraud, Morning Star has some news about Blue Badges, which I haven't seen mentioned anywhere else.