Author: Citizen K
Citizen K explores the strange paradoxes of the UK's benefit system and argues for a system of basic income to remove idiotic and damaging traps and disincentives.
At the moment, I am a carer, so I claim Carers Allowance, worth £62 and 10 pence a week. Sounds simple, doesn't it?
No, it isn't simple at all: the rules are bizarrely convoluted and force me into some actions that are highly complex.
Firstly, as I have an occupational pension, I pay tax both on that and also on my Carers Allowance.
Secondly, I work part-time, and earn significantly more than the £110 maximum earnings limit. Actually I earn two to three times the limit. So the only way to continue to get my carers allowance is to pay a large sum into my pension plan every week: because half of all pension savings can be deducted from earnings along with tax and national insurance contributions.
Rather oddly, my pension is deducted at source, and the Chancellor then tops up all my pension contributions with 25% in assumed income tax relief.
I also lease my car, rather than own it outright, because I need my car for work, so that counts as a work expense, which is also deductible from my earnings.
Do you see where we are going here?
So, if my job didn't involve the use of a car (for example if I only needed to car to commute to work, rather than for work) I would lose my Carers Allowance.
People are being forced to organise their lives to work around the crazy benefit system and the rules do not even seem to benefit those in greatest need.
Most benefits are paid to people in work, or to pensioners, not just to the destitute, and those benefits all come with silly rules attached that, for example, make it impossible for a pensioner on a state pension in receipt of Housing Benefit to get a wee job as a Lollypop Lady or domestic cleaner.
A basic income could eliminate many, if not all, of these injustices, and potentially increase the number of people currently on benefits who could now afford to work, thereby improving happiness, productivity, growing the economy, and increasing tax revenues.
The publisher is the Centre for Welfare Reform.
Carers Benefits and Basic Income © Citizen K 2017.
All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.
Basic Income, disability, tax and benefits, Story