Saturday, June 17, 2006

Britain's welfare frauds

There was an ad which ran on British tv a few months ago discouraging welfare/benefit fraud. It showed a delivery guy, a construction worker, a woman cutting hair in a downmarket salon. The tag line was "We know where you commit benefit fraud."


That's not where benefit fraud is committed. The fraud is perpetrated at the benefits office. It's not criminal to work. It's criminal to take payment from the state as if you weren't working.

New findings from the Joseph Rowntree Trust, a social research think tank now tells us why people commit benefit fraud, but falls into exactly the same trap.

People in some deprived areas work informally, out of 'need not greed', in response to poverty: they feared going without basics such as food and heating or facing mounting debt.

I, too, work to pay my food and fuel bills. Again the assumption that people commit fraud by working, rather than by "signing on".

I'm not naive, I understand why people do this. It's very, very hard to get into the benefits system in the UK. Once you're out, it's very, very hard to get back in. Even earning a small amount of money in a temporary job is enough to get your benefits not just suspended, but terminated. And working for a low wage simply doens't pay. It's not just the diret payments you miss out on, but also the housing benefit (free or subsidised rent), the free prescriptions (which are overvalued by many- all prescriptions cost in England cost no more than around $10 each), and the council tax benefit (the government picks up your share of the local residency tax, that's based on the value of your home) - in some places this can be worth over £1200 or $2000 a year - even for people who live in very low quality housing.

In many deprived areas, the jobs aren't permanent. Local businesses, the handymen, the small scale construction, etc. don't have enough employment to keep people on permanently. If they hire directly, they face a mountain of red tape - if they hire through employment firms, they pay an outrageous surcharge on the labor costs. It's easier to employ off-book and pay cash.

I don't blame the people who "work informally" and continue to claim. But I do blame a system that encourages them to do so and sees work as the crime.


St. Caffeine said...

I understand the illegal act here, but I think I may be amazed at just what the (perceived) underlying "problem" is. From the general tone of your post it seems almost as if the government is upset that people are WORKING!

I think this may have been your point, but would the government be happier if those on the dole just stayed home and collected subsidies like they're supposed to? That's the impression I get.

Oh, as to the think tank quote ("People in some deprived areas work informally, out of 'need not greed',")... Is it bad when people work out of greed rather than need? I could understand getting snippy at folks who are running a scam to collect multiple benefits, but working for greed is bad? Geesh!

Vol Abroad said...

Yes, that's what I find worrying. Rather than worry that people are spending their whole lives on benefit, they're worried that people are working.

I don't like people committing benefit fraud, but I'd rather them do some occasional work, get skills and get a real job than just sit at home dependent.

In some ways, weaning people off state dependency is harder than breaking a heroin habit.

Vol-in-Law said...

"it seems almost as if the government is upset that people are WORKING!"

That is exactly right. There's something wrong with our society when living off benefit is fine, but working is wrong.