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The Rat who is made of Stainless Steel

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Background: If you go on unemployment benefit in the UK you are allowed up to £15k of savings* before your benefits are penalised < No doubt an over simplication, but to keep it simple...

*Note that savings can be second properties, or any other form of invesment AFAIK.

Do you think it's fair to penalise someone's benefits if they have savings?

Don't know
I'll comment
I'm from another country, and this is all too confusing!

What level of savings do you think is fair before your benefits are penalised?

> £1,000,000
> £100,000
> £50,000
> £15,000
> £1,000
£0 i.e. you shouldn't be able to have savings
I'll comment!
I'm from another country, and this is all too confusing!

What poll question would you ask about unemployment and/or other benefits?

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Yes, frankly. I think if you're in a position to create savings when you're working, then you definitely should, to allow for situations like these! I do however think the threshold should be higher to allow for the bigger-ticket item things that may have been purchased while in employment and now can't be paid for, mortgages cars etc.

But at the end of the day, savings is your "oh shit" fund.

This. I also think there should be some allowances for your own and your partners savings. If Paul had savings from before we met, or visa versa, I wouldn't automatically assume they were mine to live on until I got another job.

Another point is that a lot of people have money tied into fixed rate no access accounts, so couldn't use it to live on until the time is up.

It's hardly fair to penalise someone for being sensible and not blowing all their money!

That's the inherent problem with the welfare state. It encourages people to blow their money and not take responsibility for keeping themselves. But some people earn a very low wage and couldn't possibly save enough to keep themselves if they lost their job, so whadda ya do?

Maybe people earning a certain amount shouldn't be eligible for JSA on the grounds that they could save enough? Or maybe they shouldn't be eligible for the first 6 months? That would level the playing field without penalising people for saving; it would encourage them to do so.

It's between £6K and £16K that you are penalised, so a certain amount of savings is ok. I'm broadly in favour of penalising savings over a certain amount (not sure that £6K is that amount but I haven't thought about where the limit should be) but also after a certain amount of time - short-term unemployment shouldn't force people to screw up their long-term savings plans e.g. ISAs. I'd rather we had a culture of long-term savings, overall, and if that means we pay out JSA for a few weeks when we otherwise wouldn't, that's ok by me.

I suspected it was more complicated, but though I'd just give an approximate figure to keep it simple :-)

Yeah, it's just that the point at which you start being penalised is such a long way below £15K I figured it was worth clarifying. :) But savings of £5999 are ok, which is better than nothing, I guess...

The only time I've ever had savings of more than £6K I was unemployed but not claiming benefit, so I've never been in a position to worry about this rule. :)

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Vodafone did not dodge any tax.

I suspect that damerell believes that "dodge" includes both avoidance and evasion, whereas radiantsoul believes that "dodge" only includes evasion.

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The idea that occurred to me in the shower is to consider whether JSA etc. is state-run charity or state-run insurance (or some other model, or a hybrid). If, as a thought experiment, we take the insurance model, then you could consider people with lots of savings to be self-insuring, and let them self-certify in return for a tax break.

That aside, from a purely selfish point of view, my instinctive thing is to say "enough money for a decent deposit on a reasonable house, plus national-median-average post-tax full-time income for the JSA period". Perhaps you could take out the deposit bit for people already on the housing ladder, or count equity on a first home as savings, or equity up to a certain sum as savings.

Then again, you don't know what someone's savings are for, how much they have access to the generosity of SO, friends, family, whether they stand to inherit money or property in the not-too-far distant future, or...

Which makes me think the simplest thing is to follow damerell's suggestion and argue that savings should not be taken into acount.

I prefer systems that tax more and make benefits universal.

And a slight 'other' on reflection: the only money that's probably relevant is the size of any redundancy payout, as this is presumably intended to contribute towards any spell of enforced worklessness.

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