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Flashcards in 1SR: Benefits of the Welfare System Deck (16)
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1

The policy dilemmas/choices in deciding who gets what can be summarised in 2 ways. Which ways are this?

1. Choices to be made about distribution & redistribution of services, resources & money
- More familiar with these policies in the NHS, education, social security, tax systems
- Regulation & control are also important

2. Choices to be made about funding the welfare system, deciding who will contribute & how much they’ll pay
- Just as important to ask ‘who pays for it’
- How much is paid by each individual and by various groups; how much is spent on welfare

2

What is meant by Direct & Indirect Affections?

Directly or indirectly, the costs & benefits of the welfare system affect everyone

Indirect Example: A childless, career-minded coupe may not necessarily want primary education, but will need it if they need to see a doctor (who probably used primary education)

Some may pay towards things they don’t need/won’t use

The very rich may not benefit from the welfare system; as they go private – although the private doctor may have used public education

3

What are the Benefits of the Welfare System?

The public welfare system helps to maintain the ‘social fabric’ and prevents & minimises breakdowns of law & order. External benefits also occur

The well off also derive benefits from the welfare system: Social security pays out universal benefits (paid to everyone automatically, irrespective of means); the better off do regain some of the money they’ve paid into the system – e.g. state retirement pensions

4

What are Universal Benefits?

A service/benefit is available to everyone, irrespective of income or social position

5

What are the Positives of Universal Benefits?

To those supporting universal benefits, the drawbacks of providing ‘free’ services/ cash benefits to everyone is smaller than the drawbacks of changing to a more selective system.

Inclusive: High take up among people in eligible groups (e.g. parents)

Efficient: minimum costs of bureaucracy and administration costs

Promotes citizenship and a sense of social utility

6

What are the Negatives of Universal Benefits?

Universal benefits are increasingly questioned – argument that benefits for all should be phased out in favour of targeting welfare benefits on the poor, and those in greater need.

Lack fairness: Benefits 'wastes' on the better-off where taxes on earned incomes are low

Encourage welfare dependency and over-reliance on the state

Wasteful: Even if people improve their income, the continue to receive universal benefits

Toynbee (2000) – Across-the-board increases in state pension would represent a ‘regressive, non-redistributive and unsocialist policy’ based on a ‘dead old idea of a national insurance principle that ever actually delivered’

7

What are Selective Benefits?

(aka Means-tested social benefits) They’re selective; and target/select only those who cannot afford to pay fees or charges, or who can’t provide for themselves

8

What are the Positives of Selective Benefits?

Income support & benefits are only given to those who need them

Efficient: they allow more money to be targeted on low-income families

Reduces demand for welfare and allows public spending to be reduced or contained

9

What are the Negatives of Selective Benefits?

Means testing involves complex procedures and claim forms; low take up likely; high administration costs

Means testing may involve social disgrace & stigma; low take-up likely

Is all benefits are related to income (means testing), a rise in income disqualifies people from benefit acting as a disincentive to work the poverty trap)

10

What are some examples of Social Class Divisions that raise inequalities in the welfare system?

1. Income groups, or more broadly, social class groups. E.g. Think of 3 broad social class groups- the rich, the middling/average incomes, the poor
2. Age
3. Race
4. Ethnicity
5. Sexual Orientation
6. Disabled/ Non-Disabled

11

What are the types of Roles the Welfare System can have on how they Redistribute?

1. Welfare system has a Neutral Role: It doesn’t redistribute resources between groups to any significant degree, and its overall effect is to leave existing inequalities largely untouched.

2. Welfare system has a Robin Hood Role: It affects the whole spectrum of society, redistributing from the rich/better-off groups to the average & poor

3. Welfare system acts like Sheriff of Nottingham: It redistributes from the poor to better off systems in society. E.g. Average & poor income groups may pay higher proportions of their incomes in tax, and at the same time might fall to claim all the benefits they’re entitles to, or underuse ‘free’ services

4. Welfare System Partially Redistributes: Redistribution only takes place within a limited range of groups.

5. Different parts of the Welfare System play Different Roles: e.g. the education system play a ‘Sheriff of Nottingham’ role, social security may be a ‘Robin Hood’. Or the education system may play various roles within

12

What are 3 further pints about the Economies of Welfare?

1. Taxation
2. Care
3. Perspective on the individual

The first two concern the nature of our contributions to the welfare system, and the third looks at who gains & loses from the welfare system

13

What are Contributionary Benefits?

Contributionary Benefits – For those who have paid into the benefits system through NI

- The majority of the share goes towards the huge retirement pensions bill
- JSA was (rather confusingly) introduced as both a contributionary and non-contributionary benefit.
- JSA, widows’ benefit and maternity allowance take relatively small slices of the social security budget

14

What are Non-Contributionary Benefits?

Non-Contributionary Benefits – Which people qualify for on grounds of need, or because they fall into a particular category

- Can be income or non-income related
- For non-income, this would mostly be chid benefit, attendance allowance and disability allowance; can also be war pension, severe disablement allowance, industrial injuries. None of these benefits are taxable
- Income related is by far the biggest item of expenditure, and is taxable. Many poorer families/individuals rely on this. E.g. JSA (which replaced income support in 1996)

15

What are Tax Credits?

Tax Credits – Income-related benefits, which are tested/selective/targeted

- They are currently administered by the tax authorities (HMRC)
- There are currently Three tax credits: Child tax credit, Working tax credit, Childcare tax credit
- They are designed to encourage people to take paid work rather than rely on benefits, and the child tax credit also attack child & family poverty
- The system has been subject to serious criticism, due to under & overpayments
- Pension credit is a means tested benefits for retirement pensioners, but more generous and isn’t actually a tax credit

16

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Poverty and Social Exclusion