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‘I have heard that [true] leaders of states or clans … do not worry about poverty, but inequity. … For if there is equity, there will be no poverty’.
Confucius Analects 16.1
1. Introduction
A regular theme in the British popular press is the exposure of ‘benefit cheats’: people who have claimed benefits to which they should have known they are not entitled, or have failed to inform the authorities of changes to circumstances that reduce their entitlement. A random internet search brings up a regularly updated Daily Mirror feature with numerous stories, the first four of which in November 2020 were:
Bogus carer claimed £30,000 of benefits for looking after a dead man for 6 years.
Benefits cheat who rode elephants and ran brothel said she was ‘too weak to walk’.
Gran who lied blindness to steal 1m in benefits ‘was craftiest woman ever’
‘Hard working and decent mum’ jailed for £20,000 benefit fraud (Daily Mirror, 2020)
The idea that the country is full of benefit cheats has arguably permeated public consciousness, with government minister Iain Duncan Smith reported as saying ‘it makes his blood boil’ (Worrall, Reference Worrall2015). Such a strongly negative view is encouraged by the government which has set up a simple to navigate website to allow people to report on benefit fraud (GOV.UK undated a), which in turn has come under severe criticism for generating hundreds of thousands of complaints that are not investigated (Cowburn, Reference Cowburn2018).
We accept that, no doubt, there are cases of serious, systematic, dishonesty, that constitute theft or fraud. However, many people who are classified as benefit cheats are trapped by the structural injustice of a welfare system that provides a cruel choice between living a barely human life, or breaking the law. Many will choose to stay within the law, living in or near poverty. Others will attempt to improve their standard of living by choosing to break the law, thereby experiencing several layers of disadvantage. First, having to exist purely on benefits puts most people in a highly disadvantaged position; second breaking the law risks severe consequences; third, unlike other disadvantaged or stigmatised groups, they are unable to speak out for fear of self-incrimination; fourth it is very likely that the stress of living in such a situation has adverse health consequences (Wolff and de-Shalit, Reference Wolff and de-Shalit2007; Marmot, Reference Marmot2015).
What has society come to, if it offers the most vulnerable the choice between a barely human life and crime? How, starting from where we are now, can the system be changed? In this paper we use the issue of benefit cheats as a way of approaching welfare reform. When people in power ignore the real injustice of a deeply flawed system and target those who struggle to manage within that system for stigma, scorn and even criminalisation, we must be careful not to accept their framing of the issue. Our alternative will be to focus, not on all aspects of welfare and public policy, nor on all public policy goals, but on how to ensure people have enough to live on with dignity. Our task will be to explore the major policy options for welfare reform, and to consider both the long-term moral and political goals of a welfare system and the shorter-term measures that could alleviate some of the most debilitating aspects of the current system.
2. Aspects of the Benefit System in the UK today
Those who do not have direct experience of being an applicant for, and recipient of, benefits in the UK today may give little thought to what it would be like, or may rely on portrayals such as that of Ken Loach's film I Daniel Blake, but perhaps suspect that it is an exaggeration or treats exceptional cases as typical. That film, and related literature, however, shows that the welfare system has two main goals, both to provide welfare, but also to exert social control over people's lives, conditioning action to particular behaviours, such as incessantly applying for jobs, even when there is no real prospect of success, and attending all interviews offered. Such social control may ostensibly be justified by its role in training people for the workplace, but much is arbitrary, and punitive, perhaps with the goal of making some people forfeit, or not even apply for, benefits to which they are entitled (Watts and Fitzpatrick, Reference Watts and Fitzpatrick2018).
A humane society would attempt to put more resources into welfare and less into social control. But concentrating on the welfare side, what standard of living does a welfare complaint typically experience? We might start by comparing benefit level with the poverty line in the UK. Today, over 2% of the population are defined as destitute. That means more than 1 in 50 of us are not just poor, but extremely poor, unable to buy the ‘absolute essentials that we all need to eat, stay warm and dry, and keep clean’ (Fitzpatrick et al., 2017). The Joseph Rowntree Foundation (2020) has also worked with the general public to define a Minimum Income Standard (MIS): ‘a minimum socially acceptable standard of living in the UK today’ but these standards are far higher than benefit levels.
State pension is 93% of the MIS. Disabled people on the highest levels of benefits will have incomes that are less than 75% of the MIS. For people on the lowest benefit levels their income is little more than 25% of the MIS. (Benstead, Reference Benstead2019). For example, weekly payments on Job Seekers Allowance are:
Maximum for a single person under 25 is £58.90
Maximum for a single person 25 and over is £74.35
Maximum for a couple over 18 is £116.80 (i.e. £58.40 each)
Money is reduced as you start to earn and for single people if they become a couple. As Paul Spicker puts it: ‘…the rules on fraud are trying to eradicate behaviour which is normal, reasonable and desirable’ (Spicker, Reference Spicker2011).
And, of course, if you fall foul of the benefit system your income may become zero. If you apply for a disability benefit, are rejected and challenge your rejection you will be given no income while you go through the long and complex period of challenge, despite the high success rates for challenges. Or you may be sanctioned, perhaps for reasons as trivial as these:
• You volunteer to sell poppies for Remembrance Day
• You have a heart attack during the assessment process, and so fail to complete the assessment
• You don't look for work on Christmas Day
• You can't afford the bus fare to the workfare job where you are being forced to ‘volunteer’
• You attend your grandmother's funeral
The net effect of this is food poverty, energy poverty, social isolation and mental illness. ‘I used to be on average 9 stone 7; I'm now just under 8 stone… all the stress and everything. The doctor weighed me. He said that's malnutrition.’ (cited in Benstead, Reference Benstead2019).
The growth in poverty, and particularly in extreme poverty is reflected in the rapid growth of food banks. The creation of a food bank used to be a rare event in the UK, connected to a strike or some unusual crisis. However, since the beginning of the so-called welfare reform period food banks have grown in number every year. In the UK in 2019 there were over 2,000 recognised food banks, with an estimated further 3,000 venues distributing food aid (Peck, Reference Peck2019). By 2021 the number of established foodbanks had risen to 2,200 (Tyler, Reference Tyler2021). This is associated with another fundamental feature of the current system; feelings of shame and persecution that have been accelerated by the move to a benefits system with more conditionality, control and dehumanised assessment systems. For disabled people in particular new assessment systems, built around the false assumption that disabled people are likely to faking illness or disability, have led to extremes of fear, self-doubt, mental illness and suicide. Analysing the impact of the roll out of one element of this system researchers stated:
We found that those local areas where a greater proportion of the population were exposed to the reassessment process experienced a greater increase in three adverse mental health outcomes — suicides, self-reported mental health problems and antidepressant prescribing. (Barr et al. Reference Barr, Taylor-Robinson and Stuckler2015)
People adapt to extreme poverty in many different ways:
Bill used to disappear around December, and came back in March. When asked he explained ‘I get myself locked up’. Prison gave him the support he needed to cope with the winter. ‘It’s warm, free meals and plenty of company’. (Duffy, Reference Duffy2014)
Despite the difficulties of living on benefits, there is little evidence of widespread benefit fraud. For example, there were about 10,000 cases in 2012-13 (Worrall, Reference Worrall2015), but the factors that define both entitlement and fraud include many aspects that in other contexts would simply be considered part of a normal life, and do not constitute dishonest behaviour, such as the following (all taken from official government guidance):
1. changing your name or gender
2. finding or finishing a job, or working different hours
3. your income going up or down
4. starting or stopping education, training or an apprenticeship
5. moving house
6. people moving into or out of the place you live (for example your partner, a child or lodger)
7. the death of your partner or someone you live with
8. having a baby
9. starting or stopping caring for someone
10. getting married or divorced
11. starting or ending a civil partnership
12. planning to go abroad for any length of time
13. going into hospital, a care home or sheltered accommodation
14. any changes to your medical condition or disability
15. changing your doctor
16. changes to your pension, savings, investments or property
17. changes to other money you get (for example student loans or grants, sick pay or money you get from a charity)
18. changes to the benefits you or anyone else in your house gets
19. you or your partner getting back-pay (sometimes called ‘arrears’) for salary or earnings you’re owed (Gov.uk, undated b)
Essentially the fundamental logic of entitlement is that you should be in paid work, and if you are not you need a good excuse. If you cannot work, your family should take care of you if possible, and you should use up your savings before asking for help, though you can get help if you can prove you are really sick or disabled or a carer. This logic of self-help, or family-help, suggests a type of (false) nostalgia for a time when people took primary responsibility for themselves and those around them. There is certainly something appealing in this picture, but it romanticises something that never really existed. Families where the ‘bread-winner’ was out of work or in poor-paid work have always struggled with severe privation, and a family has to be reasonably comfortably off to be able to survive unemployment without severe hardship even for a short period. This picture also ignores the duty of the community to assist those who, for whatever reason, are for the moment not in a position to meet their own needs. Critically, it also ignores the fact, documented since Benjamin Seebohm Rowntree's pioneering work, that having a job is not always sufficient to avoid poverty (Reference Rowntree1901). Today's welfare system acknowledges this by supplementing the incomes of those on lower pay, and indeed there are many more people receiving Income Support than Jobseekers Allowance (Dept for Work and Pensions, 2020b). However, by far the largest group of people receiving benefits are those on a state pension, followed by disabled people and carers. Next are people getting tax credits or Housing Benefit because their work doesn't pay enough, as well as a group of people who are in insecure work and who may dip in and out of the benefit system. There are relatively few people in so-called long-term unemployment as it is typically understood, willing and able to work but unable to find a job. But many people are in precarious, low paid, work that doesn't offer stable living conditions.
The emergency steps induced by the pandemic may have put the benefit system under huge stress, and temporarily changed the possibly of false claims, deliberate or inadvertent, in substantial ways (Dept for Work and Pensions, 2021), but if we go back to the last pre-pandemic figures, despite the adverse publicity, genuine fraud overpayments are very low, bearing in mind that the definition of fraud in the list conflates claimant error and fraud; any failure to volunteer information to the DWP is treated as fraud with an ongoing and live obligation to provide information. Even so, the figure as reported was just 1.4% of the total benefit system (Dept for Work and Pensions, 2020a). Nevertheless, the inherent logic is inhuman and hostile to human dignity and is in stark contrast to the tax system, where you report backwards, take time to review your situation, can gather information, double-check your rights and responsibilities, and where there is a presumption of honesty.
Also, while the DWP itself admit underpaying people at a rate of 1.1% (i.e. almost exactly the same as the amount overpaid because of fraud) arguably the really fundamental fraud is to create a system where many people do not claim what they are entitled to or find themselves unfairly being assessed, re-assessed or failing faulty assessment processes. One estimate puts unclaimed benefits at £21 billion which is about 10% of all benefits, or about 20% of non-pension benefits. (Entitledto, 2018)
If people received benefits that brought them an acceptable standard of living, it would be easy to write off the small number of benefit cheats as greedy exploiters who are trying to swindle a humane society, to the cost of others who have to subsidise their lavish life style. And as we have accepted, there are a very small number of people who fall into this category. Our suspicion, however, is that most cases are not like this; either they concern people whose circumstances have changed in ways that affect their entitlements, but they have not notified the authorities, or are people who realise that they cannot live what they regard as a bare human life without breaking the law in some way, and opt to break the benefit laws. The categories can merge in that some people will deliberately put their head in the sand in changing circumstances, knowing that if their benefits fall the consequences will be stark.
Consider, for example, the 4th case identified by the Daily Mirror, of the ‘“Hard-working and decent mum” jailed for £20,000 benefit fraud’. This person correctly claimed benefits at first, but failed to notify the authorities when her partner moved in, at which point she was no longer entitled to single parent tax credits. According to the press report, her barrister told the court that the money was ‘not used to fund a lavish lifestyle’, adding, ‘She accepts there is no excuse and she accepts fully her culpability. She at the time was struggling with two young children and holding down a responsible and stressful job. She was in debt’ (Mutch and Dresch, Reference Mutch and Dresch2020).
This is the mundane story of poverty. People on low incomes struggle to do very ordinary things, such as buying birthday presents for their children, paying for school trips, going out with friends even once a month, or buying acceptable food or hygiene products. Much of the poverty literature uses the extended metaphor of a human versus animal existence. Rowntree, for example, says that poor people cannot be expected to survive on a ‘fodder basis’ (Rowntree, Reference Rowntree1937), and from what we have seen, many people living on benefits are excluded from what makes life human. As a society we should be ashamed that we consign so many people to such fates.
3. A Life With Dignity
We have suggested that the current benefit denies people a life with dignity, viewing claimants as potential fraudsters, who have to prove that they have a genuine claim (cf Wolff, Reference Wolff1998), and avoiding normal human relations, such as spending nights with an intimate life-partner, in case it invalidates benefits. What, then, is a life with dignity? It is worth starting with an evocative passage from the development economist Arthur Lewis, who set out the following as the aspiration of socialists:
A society in which every child shall grow up in pleasant homes and attractive surroundings and with good educational opportunities; in which every adult shall be provided for in sickness and adversity; and in which the pensioner can take untroubled ease. (Lewis, Reference Lewis1948, pp. 32-33).
There is much to hope for in this account, which encompasses the life-cycle as a whole, and not only that of an adult of working age, which is so commonly the case. Yet it also provides a surprisingly materialistic, individualist and passive picture of an aspirational life. It misses out the quality of relations to others outside the family; the role one has in contributing to political decisions that are fateful for one's life; the nature of the work that one does; and the assurance that it is possible to achieve all of this without stepping beyond the bounds of the law (Wolff and de-Shalit, Reference Wolff and de-Shalit2007). This is not the place to set out a full account of a dignified life (see Duffy, Reference Duffy2006), but we assume that any account must encompass material, relational, experiential, political and legal factors. The description we have given of a life on benefits should make it clear that the current system fails in numerous ways and the concept of ‘benefit cheat’ is a rhetorical device for reducing the status of all people claiming benefits and serving to undermine the status of people on benefits and also reducing the level of benefits people receive. Systems like Universal Credit have the function of causing two kinds of harm: low incomes and low status.
We want to eradicate the concept of a ‘benefit cheat’ because the concept is a threat to the status of those regarded as potential benefit cheats. It is a threat even to people who obey the rules, or break them for humanly understandable reasons, for the possibility of accusation hangs over every claimant. Merely being a recipient of ‘benefits’ is enough to threaten self-respect in many, though not necessarily all societies (Wolff, Reference Wolff1998). It is worse in those societies where we have been trained by the tabloid press and by politicians to associate the term ‘benefit’ with the term ‘cheat’ as in the contemporary United Kingdom. Moreover, even if we were only concerned with the distribution of material (rather than social or spiritual resources) we should seek to eradicate the notion of a benefit cheat because the concept clearly serves to support the ongoing reduction in real benefit levels and reduces pressure to redistribute resources fairly. What can be done to improve matters?
4. Prospects for Reform
What can be done? We will outline the current models for social security, with specific reference to the United Kingdom, by describing both the current system and major competing conceptions of benefits. All these descriptions are of course still relatively abstract, but the aim is to try and outline the shape of the competing models, particularly focusing on the underlying design principles.
A The legacy model - National Insurance
A common assumption is that benefits are or should be delivered on what is sometimes called a ‘contributory basis’, which implies that you may only receive benefits if you have contributed into the current system and what you get out may be in some way reflect what you put in. In reality, this model has long been on the wane and has never really been as important as could have been thought. In a highly unequal society it is extremely unlikely that the poorest can contribute enough to then provide themselves with enough in the future. A benefit system is quite properly redistributive.
There are fragments of the contributory principle still in action, but they are not significant. For our purposes a contributory system is more akin to private insurance than to a benefit system as defined here. A system where people pay into a pool in order to protect their own long-term self-interest is not a system governed by principles of social justice, and to the extent that systems build in a contributory principle they can be seen as departing from reference to the principles of social justice.
As with private healthcare, there are even social justice arguments for eliminating or minimising private insurance and contributory based systems because they encourage the better-off or others to believe that they do not need to pay attention to the needs of others because they have safeguarded their own personal needs through some private or quasi-private system.
B Welfare services – Universal Basic Services
Benefits are only one kind of welfare system; in addition there are also welfare services, where the state provides people with healthcare, education or other services. Clearly these services can play a significant role in reducing poverty, by removing essential costs for services that otherwise people would have to pay for, and also providing economies of scale, and reducing the need for administration of financial accounting. Such services, especially if they are genuinely universal (i.e not poor law provision, but provision for everyone) also tend to be good for reducing stigma. Universality is here critical. We may think that any service will help reduce the costs of poverty, but means-tested services can simply add to the risk of poverty by increasing stigma and generating poverty traps. Means-tested social care for instance may increase, not reduce, poverty.
The more that public goods are properly delivered in the form of universal services then the less that is required for people to receive in the form of benefits. However there are good reasons to think that there are some limits to this process in so far as people have varying tastes and demands and in the case of some public services like social care and housing there are also social justice arguments for increasingly reflecting personal autonomy by making such services more flexible and personal (e.g. personal budgets).
Universal Basic Services are then an important limiting system. Again, they are not strictly a benefit system, but a complimentary system of provision the size of which will impact on the size of the benefit system. Opinions differ as to the idea size of a Universal Basic Services sector (Duffy, Reference Duffy2018)
C Targeted (means-tested) benefits – Universal Credit
In the UK today the system used to provide financial benefits to people of working age is known as Universal Credit. This system, originally designed with simplification in mind, is actually a very complex combination of different systems, which have been only somewhat rationalised as the UK went through a process of what is know as ‘welfare reform’. However, with some degree of simplification we might identify the following components of Universal Credit:
1. A cash benefit is provided to households (usually the person deemed the ‘head’ of the household), but only to those families who have income or savings below set levels.
2. The level of the benefit changes month-by-month depending on household earnings.
3. If the household earns extra money then the cash benefit is reduced by a large percentage (but usually less than 100%) called the withdrawal rate, equivalent to a marginal rate of tax on earnings.
4. If not working (and Universal Credit largely goes to people in low paid work) then people must be looking for work (or looking to work for longer hours).
5. Alternatively, if you are judged to be incapable of work by an assessment of disability you are excused from looking for work, but you must therefore not work.
6. People who are looking for work, looking for longer hours of work or deemed unable to work are all subject to supervision, control (attending meetings, trainings, carrying out defined tasks etc.) and sanctions (from loss of benefits to imprisonment), controls or enforced actions.
The underlying assumption of this system is that work is good for us, and perhaps a moral duty if you are capable of working, but that many people do not want to work and although a minimally humane society will provide benefits to stop people from starving, any such benefits are liable to risk encouraging laziness and creating welfare dependency. These assumptions then drive the design of the system. First, benefits are set as low as possible, so that there is less temptation to rely on benefits as the difference between benefit levels and paid work should be significant. Second, there should be a positive financial incentive to do paid work and this means trying to reduce the marginal tax or withdrawal rate below 100%. However, it is difficult to reduce withdrawal rates without increasing eligibility rates, because a lower withdrawal rate implies people can combine earnings and benefits and this means people outside the system of benefits may see their income overtaken by those inside the system. Third, the system uses negative incentives, including the threat of sanctions, to frighten people into work. Fourth, in addition to sanctions there is a further framework of scrutiny which can lead people to be charged with benefit fraud. Benefit fraud, in addition to the few cases of deliberate criminality, as we have seen above also occurs when people make undeclared earnings, exaggerate a disability or enter into a relationship with someone with earnings that the DWP believes should be used to support you or your family. Cleary such a system brings a high degree of cost, complexity and interference with privacy and freedom.
D Universal benefit - Universal Basic Income
In contrast to targeted benefits universal benefits have no means-tests and the name Universal Basic income (UBI) is given to the idea that a non-means-tested system of social security is both feasible and fairer than a targeted system. However, it should be noted that non-means-tested benefits are quite common in the UK. The state pension is not means-tested (although there is a modest contributory qualification) and both Child Benefit and the Personal Independence Payment (PIP) are also non means-tested. This means that currently about 65% of all benefits are non-means-tested.
However, absence of means-testing is not the only important dimension to UBI and the whole definition of UBI provides a very useful contrast to Universal Credit. In a sense these two systems seem to be opposites. A common definition of Universal Basic Incomes might include these elements:
1. A regular cash payment that is sufficient to live on with dignity.
2. No means-testing of the benefit, instead people pay tax on income above the set level. This implies that it is much easier to create a progressive tax system that doesn't load the highest levels of marginal tax on the poorest people.
3. A payment to all individuals, not to households or heads of household. This reduces the risk of dependence within families and is associated with reduced domestic violence.
4. No conditionality or sanctions based on whether you are deemed to be doing enough paid work.
5. Assessments for disability or other extra needs generate additional payments which are also non-means-tested and individualised.
It should be noted that the concept of a Negative Income Tax is conceptually very close to that of a Universal Basic Income and that whatever name is given to any system one of the practical features of these kinds of system is that they are likely to see some kind of integration of tax and benefits into one administrative system.
Universal Basic Income is often criticised for disincentivizing work, or for being too expensive to fund at a worthwhile rate, or creating significant problems of transition from one system to another. These are important debates which we cannot enter here (For the authors’ somewhat contrasting views see Duffy, Reference Duffy2018; Wolff, Reference Wolff2020, pp. 194-214.)
E Other options
In public policy terms these four options do not completely exhaust all possible options. However, they do probably set out the boundaries and shape of the debate. For instance, some people are currently arguing for a Minimum Income Guarantee (MIG) and the Scottish Government, although it would like to test UBI, recently made a MIG its short-term objective. However fundamentally this is a policy similar to the first defining feature of UBI – a payment that is sufficient to protect dignity. Likewise a recent disability group proposed reform of the benefit system that would include both a MIG, payments to individuals (not households) and the end of sanctions; but they retained means-testing.
5. Policy Goals
Although it is tempting to propose a favoured policy solution, we will resist the temptation to make a simple policy recommendation for two main reasons. First, there may be a number of ways of reforming policy so that a life for all with dignity becomes possible; and second, rushed implementation of policy, without considerable research and evaluation, has often led to sub-optimal outcomes and now is not the time to make these mistakes again. Yet it is possible to lay out the policy goals. First, and foremost, it is critically important to be able to offer a life of dignity for all, and we have identified material, relational, experiential, political and legal factors that contribute to a life of dignity. Second, and in a way the main the focus of this paper, it is critically important to remove the threat of criminality to people who are already in a vulnerable position. Compounding vulnerability with threats is the opposite of humanity. These two changes should bring two more; third a reduction of stress for claimants, and, fourth, possibly a reduction in stress-related illness. These goals come with a radical reshaping of the concept of responsibility. Part of the social contract is to expect people to act responsibly in return for humane treatment, but unlike the present situation, there is no intention to make following a set of arbitrary hurdles a test of responsibility.
By way of conclusion it is interesting to explore what justification can be attempted for the current stigmatisation of benefits and for reducing the value of benefits and for therefore inevitably increasing levels of inequality. Certainly, after the post-war boom and the growth of the post-war welfare state there was a period when many did argue that inequality was not something that should concern us and that using stigma and shame to motivate people to work was necessary. It seems to us that the dangers and limitation of these arguments should now be very clear.
Growing inequality has not led to greater economic success nor overall wellbeing; but it has created an array of problems that don't just harm the poorest. Overall utility, even if we accept this as useful goal, is clearly diminished by the levels of inequality that have now been normalised in the UK. Similarly, unleashing stigma and shame as tools for social policy quickly unravels and has not only caused immense harm to those who are stigmatised but also contributes to declining support for the necessary institutions of redistribution and social security. It is particularly worrying when you realise that even those groups who might be seen as the ‘deserving poor’ are inevitably punished in the crossfire of policy of stigma.
Better policies need better goals and should perhaps be designed in a spirit of equal citizenship and mutual respect that assumes people are generally responsible and respectful. It should be a priority to make sure that people are not stigmatised by the design of social security, particularly given the fact that we need such systems for society to function effectively. We should avoid any system that is so mean-spirited that it tempts people into criminal activity, particularly where doing nothing or failing to immediately report some change of circumstances makes someone culpable.
We might be guided more an awareness both of outward and inward cost of such policies. When someone's status is at risk so is their mental health and well being. Beginning with a basic assumption that the purpose of the welfare state is that all citizens should fare well and feel well it would be impossible to pursue the current strategy of criminalisation and stigmatisation.
