Passported Benefits and a Citizen's Income
The Government’s Social Security Advisory Committee’s press release of 15 June 2011 heralded a ‘Public Consultation: Passported Benefits under Universal Credit – review and advice.’ In a footnote, the press release stated:
By Passported Benefits we mean those benefits to which working-age claimants of certain means-tested benefits are automatically entitled. For example, free school meals, free prescriptions, free dental treatment, etc.. We will consider the range of Passported Benefits available to working-age claimants but the recommendations will focus on the main Passported Benefits. We are particularly interested in receiving views about benefits in kind but welcome responses relating to cash benefits and discounts as well.
In this short article, I briefly examine the concept of Passported Benefits (PBs) as presented in the consultation document of the Social Security Advisory Committee (SSAC) (http://ssac.independent.gov.uk). Then I examine whether these needs would be met already within a CI scheme, or whether special arrangements would have to be made.
Passported benefits in the consultation document
The SSAC’s consultation document’s Annex B gives the consultation’s Terms of Reference:
The purpose of the advisory report is to analyse the range of passported benefits (“benefits”) which currently exist in order to:
- classify the target audience(s) for these benefits;
- identify the needs which those benefits address, and the wider policy objectives served by them now and in the future;
- identify and analyse the mechanisms that are currently employed to determine entitlement;
- consider the potential impact of changes in eligibility rules.(The document’s annex A comprises the table below)
The target audience (recipients) for PBs comprises working-age claimants who are in receipt of certain means-tested benefits (MTBs), such as Jobseeker’s Allowance and certain Tax Credits. It can, therefore, be assumed that the recipients are poor and that many of them will be living in poverty. Residents are likely using a payday loan to pay their bills. The payday loans are probably one of the main reasons they can afford to keep the lights on and have food in their fridges, keeping them afloat.
The purpose of the benefits appears to be to support low-income households, whether out-of-work or in-work, in specific ways. Some are designed specifically to help low income people meet the ordinary costs of raising children (Healthy Start Vouchers, free school meals, and school clothing grants).
Some PBs address exceptional circumstances that lead to extra expenditure, such as Exemption from Court Fees, Help with Prison Visiting Costs, and Legal Aid. These are circumstances that most of us do not experience as a matter of course. Educational Grants to enable gifted children to receive special training, for instance, in music and dance, provide another example. The travel costs associated with healthcare, and School Transport provision for those in rural areas, also fall into this category.
Many PBs can be seen as part of wider policies, often representing an investment in the future, (eg. our children’s health and education), and in the general health of the population (through free prescriptions, eye and dental care, leisure services and healthcare travel costs), thereby reducing future National Health Service bills. Similar considerations apply to the environment, such as Warm Front, and bus and tram discount schemes. Others represent an attempt to redress failures of public policy.
Benefits-in-kind are often controversial, because they offer no choice compared with cash benefits. Cash benefits permit the consumer the autonomy that most of us enjoy. Sometimes it may be cheaper to give benefits-in-kind rather than cash, but often it is a case of controlling benefit recipients because they are not trusted (rightly or wrongly) to select what others regard as best for them.
An interim statement says this:
The information-gathering phase of the Social Security Advisory Committee’s review has found that more than 25 different passported benefits are provided by government departments and through local authorities. The committee’s findings to date confirm that passported benefits are viewed by many respondents as fulfilling important needs. The consultation found that the value placed by claimants on individual passported benefits differs depending on their personal circumstances; respondents’ views on the withdrawal and delivery of passported benefits were mixed. For example, some respondents supported a tapered withdrawal whilst others favoured a timed withdrawal when a claimant moves into work; and the design of passported benefits should incentivise people to both move into work and stay in work. (Hansard, 5 Oct 2011, Column WS75, Written Statement on Universal Credit)
The final report will be published in the Spring.
The consultation document’s Annex A: A list of main passported benefits and responsibilities
|Benefits in kind||Cash Benefits||Discounts on charges or fees|
|Responsibility of Government Departments|
|Benefits from the Pupil Premium (Department of Education)|
|Exemption from Court Fees (Ministry of Justice)||Help with healthcare travel costs (Department of Health)|
|Free School meals (Department for Education)||Help with Prison Visiting Costs (Ministry of Justice)|
|Health goods/services, e.g. free prescriptions/eyecare/dental care (Department of Health)|
|Healthy Start Vouchers (Department of Health)|
|Legal Aid (Ministry of Justice)|
|Warm Front (Department of Energy and Climate Change)|
|Responsibility of local authorities|
|Help with the costs of school visits||School clothing grant (cash/cheque)||Bus and Tram Discount Scheme – London (Transport for London)|
|Leisure services, e.g. free swimming||Leisure discounts|
|School clothing grant (vouchers)|
|Responsibility of other bodies|
|Leisure services||BT Basic (BT)|
|Warm Home Discount/Voluntary Social tariffs from utility companies e.g. WaterSure|
Citizen’s Income and passported benefits
Our question is, ‘Are the needs addressed by PBs already accounted for in a typical CI scheme, and, if not, should they be, and how?’
A Full Citizen’s Income (FCI) would be expected to be adequate to meet the needs of the recipient, including people over pension-entitlement age, people with disabilities, carers of last resort, and the responsible parent of a dependent child. The more generous the scheme, the more likely this is to be true. Thus, if the FCI and Child CI (CCI) are sufficiently generous, then Passported Benefits should not be necessary. If they were necessary, then it would represent a failure of the scheme.
A Partial Citizen’s Income (PCI) would not meet all of the needs of the recipient and would not be enough to live on. With this scheme, where exceptional needs are indicated, the PBs should continue. But, the question arises: ‘Should all those with the exceptional needs receive these benefits, or only the poorest?’ If the latter, how do we identify those on low incomes? – because everybody would be in receipt of a Partial Citizen’s Income, so the benefit would not act as a passport to PBs. As the PCI would not be enough to live on, it would need to be topped up with other income, usually through earnings. There will be some individuals who are unable to obtain even part-time work, and there will be some areas that suffer from multiple deprivations, where opportunities for work are thin on the ground. There will therefore have to be safety-net arrangements, and a simple scheme, possibly in the form of a Housing Benefit, would have to remain. Thus, those receiving a PCI and who are also receiving Housing Benefit or some other safety-net assistance could be eligible to receive PBs.
The largest group in the population with exceptional circumstances are those with a variety of disabilities, and a CI scheme would grant to all of these, without any means test, a costs-of-disabilities package (for constant care, mobility, special diets, etc.) in addition to their CIs. Here, the receipt of the package could act as a passport to other PBs.
Where the PBs are seen to be part of a wider policy, one must question whether the PBs for low-income, working-age adults, and especially benefits-in-kind, are the best way to achieve the objectives. Investment in the early years of childhood is known to pay large dividends to society later, in terms of healthy, well-adjusted adults. Notwithstanding adequate FCIs and CCIs, maybe benefits-in-kind, such as Healthy Start Vouchers, and free school meals, should be universally available to all children. As well as education projects to inform people about healthy diets and lifestyles, other instruments might be necessary, such as subsidies on fresh fruit and vegetables, and taxes on processed food with significant proportions of fat, salt and sugar. A CI is not a panacea for all social ills, and, where other public provision is made, it will usually be better to get the policy right in the first place, rather than to use benefits to paper over the gaps.
Universal schemes, such as the NHS, and universal benefits such as Child Benefit, are popular, inclusive, and redistributive. If a generous CI scheme were to be introduced, one might find that expenditure on other public services, such as health and the criminal justice system, would fall significantly, especially where those systems combat the effects of poverty. As with most things, it is cheaper to prevent poverty than to deal with its fallout later.