Lib Dem Voice polled our members-only forum before conference to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. More than 550 party members have responded, and we’re publishing the full results.
Two-thirds back means-testing of some wealthy pensioner benefits
LDV asked: Nick Clegg has suggested introducing means-testing so that better-off pensioners would no longer be entitled to receive benefits such as winter fuel payments, free bus passes and television licences. Supporters argue that at a time of financial austerity such benefits for the wealthiest paid by general taxation are unfair. Opponents argue that the principle of universal benefits is important and that means-testing is administratively complex. Which of the following statements comes closest to your own view:
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64% – I support means-testing of some benefits for better-off pensioners
31% – I oppose means-testing of benefits
5% – Don’t know / No opinion
So a large 2:1 majority backs Nick Clegg’s call for means-testing of some wealthy pensioners’ benefits, although by a slightly narrower margin than when last we asked this question in January — whether because members are less convinced by it, worried about the political consequences, or perhaps because of the association with Nick Clegg. Here’s some of your comments:
It is absurd that retired millionaires receive winter fuel payments and free TV licences
The whole idea was that our policy was for a decent pension which would obviate the need for freebies, and with the taxation thresholds set appropriately that deals with the ‘means testing’ anyway.
Depends on the benefit – but for pensioners I think they deserve the care we give them. In 15-20 years with an aging population I may change my opinion.
It would mean a return to a ‘poverty trap’ type of situation where those who were just too ‘rich’ for these benefits were disproportionately affected. Perhaps the benefits could be taxed – this is a much fairer solution as only better off people would have to pay any tax on them.
My parents live in Spain, but still get the Winter Fuel allowance. They use it to pay their air-conditioning bill!
70% oppose 2-year freeze on some benefits
LDV asked: Press reports suggest the Government is looking at freezing some unemployed, sickness and housing benefits payments for the next two years. Currently, such payments are uprated at the rate of inflation. This year that meant a 5.2% increase based on the inflation rate in September 2011. Inflation is currently running below 3%. Supporters of the move say it will save public money and increase the incentive for benefits claimants to seek work. Opponents say it would be wrong to cut the real incomes of claimants and would be very complex to do. Would you support or oppose a move to freeze some benefits?
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22% – Support
70% – Oppose
8% – Don’t know / No opinion
And some of your comments:
Totally oppose. We are supposed to be helping people out of poverty. It is already much more difficult to claim benefits. Id rather see an increase in the minimum wage if we are to fsll for the “incentive to work” argument. This proposal is morally wrong and we would be accused of punishing those on low incomes once again. Many of those who would be affected are working part=time.
Benefit levels, ought to be related to income levels rather than inflation.
Benefits should be based on need, which in principle means keeping pace with inflation although we should also keep under review whether the benefits are adequate more directly given the debate over how we measure inflation! We can tackle incentives by reducing the steepness of means-testing and considering the overall effect of tax and means-testing.
Given the pay freezes across the public sector, it’s hard to justify continuing to uprate benefits in line with inflation, though I would not include sickness benefits or pensions in that
I’m not against trying to find ways to reduce the welfare bill, but an across-the-board real-terms cut (which is what a freeze amounts to) is not the way to do it because many of the people affected could ill afford it.
* Stephen was Editor (and Co-Editor) of Liberal Democrat Voice from 2007 to 2015, and writes at The Collected Stephen Tall.
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13 Comments
Things like Winter Fuel Allowance should go as the new flat rate pension comes in. The rate could be set slightly higher and savings made on the bureaucracy.
There are additional policy arguments for free bus travel.
I would be careful in reading too much directly into this when determining policy. We know that non-means-tested/universal benefits are very cheap to administer, as the qualifying criteria and hence assessment is very simple.
We only need to look at the proposal to change child benefit from a universal benefit to a means-tested benefit to see that the cost of the bureaucracy associated with means testing are significant.
I personally think we should tend to implement more universal benefits (minimize bureaucracy costs) but make them subject to tax.
I personally think it is absurd that pensioners who cannot afford a TV or live in a care home get a free TV licence, I’m sure they would prefer a tax credit that would enable them to spend the money in a more appropriate way – like on presents to the grandchildren …
What (other than political considerations) stops us making universal benefits like Winter Fuel Payments taxable?
I know it seems a bit silly on one level – giving with one hand, and then taking some of it back with the other – but surely it’s cheaper to administer, and probably fairer, than trying to means test everything. I’m not against more targeted support, but means testing as a way to do this has damaging effects (one of the reasons Steve Webb gives for universal flat rate pension is the sheer number of poor pensioners who don’t get Pension Credit because they either don’t know about it, or they refuse to be means tested for it).
And with respect to the comment about Winter Fuel Payment and Spain – I think I read recently that IDS and Webb are looking at putting a temperature requirement in so they can stop paying the benefit to pensioners in hot places (without falling foul of EU law).
Ros Altmann, director general of Saga, wrote in The Times this week opposing means-testing but saying that “I do not understand why winter fuel payments and some other benefits are tax-free. Revenue could be raised by making them taxable. We could also increase the age at which eligibility starts”
I think we should have a higher state pension and scrap these gimmicky and inefficient freebies, but when even Ros Altmann is saying they should be taxed – and I think that would be compatible with the Tory manifesto – it’s clearly time for action.
I needed a further option: Yes if the money saved is worth the extra admin and a system ostensibly devised so that poorer pensioners automatically get the benefits. This would do away with the danger of people in need not claiming through either pride or lack of knowledge.
I’d rather tax higher earners more during their working lives and avoid means testing. Otherwise you end up with the idea that you are paying tax to keep others afloat and that it doesn’t have a personal benefit. All of which adds to the drive to smaller government, lower tax and a belief in the trickle down effect.
I agree with Roland. Cheapest way is to pay benefits to all and add them to income for tax purposes.
So there are only 550 LD members? This is a flawed result of a flawed survey. It says everything when 38 degrees can get tens of thousands answering a survey whilst LD Voice can’t even get one thousand of its members.
That’s why I believe that LD Voice is not the voice of liberals, just the Clegg cohort and the Orange Bookers
Hear hear Roland and David P.
It would be better if the Winter Fuel Allowance was paid directly to the pensioners energy provider and could appear as a credit on their bills. Too many pensioners see the fuel allowance as a “xmas bonus” and don’t spend it on heating. Therefore they still sit in the cold in the winter months. Harsh but true….we all know someone who does this!
I too agree with Roland & David P. Means testing is an expensive system to administer and the really needy feel too proud to claim or are totally confused by the forms needed.
What also annoys me is that with all this talk of needing to save money with austerity, the coalition government, to which we are part of, can find money to bomb the Libyan people at the request of NATO!! It has not done much good so far.
Pension, Sickness, Disability, Free Bus passes should all be universal benefits. Redistribution should be by income tax.
Incidentally, when are we going to replace the Council ‘poll’ tax with Local income tax ????????
By all means restrict the amount of money to those who can afford to not accept winter fuel. I suggest that those who wish to do this, start now.
Although as a pensioner, I find the fanchise situation highly disturbing, at the last count it was 100 million, or so the papers say, simply wasted, what a waste of money. I hope Virgin will be understanding and get this over as quick as possible.
This should me considered a waste of money.
Why weren’t benefits like the Winter Fuel Allowance means tested to start with.
Quite simple. Means tested benefits have a huge number of those eligable not taking the benefits up. This is so well known that I can’t believe that people on here don’t know this. I can only think that the ‘economic liberals’ who are supporting this move are ambivilent about vulnerable people getting the right support.