The number of in-work Housing Benefit claimants now stands at over 1.049 million, the highest figure on record. In May 2010, when this Government weren’t elected, the number claiming this benefit was just over 650,000.
Housing Benefit is probably the best indicator of how many people in the UK are poor. Available to those in or out of work, as well as pensioners, the only criteria are being a tenant on a low income and having low, or no, assets or savings. Even those with jobs on Housing Benefit will have a disposable income little higher than someone on out of work benefits, as the benefit is reduced as earnings rise. All of the Housing Benefit bill goes to landlords, and the rates are capped at the bottom 30% of properties in the local rental market.
Both the press and politicians are finally questioning whether the fall in unemployment is masked by a huge increase in the number of self-employed people who are barely scraping an income. People are known to have been encouraged to come off unemployment benefits and claim the lower rate of Working Tax Credits by companies running Iain Duncan Smith’s welfare-to-work schemes. These firms receive huge pay outs if they can persuade a claimant to take this risky move, which involves declaring themselves as working at least 30 hours a week towards self-employment.
If this was happening on a large scale then you would expect the number of in-work Housing Benefit claimants to soar. The same would happen if many of the people now officially ‘employed’ are actually on workfare, or zero hours contracts with sporadic and precarious incomes. That is exactly what’s happening. The number of people overall claiming housing benefits hit 5 million households last February and has more or less stayed there ever since. This is a quarter of a million more than in May 2010 and the figures were at record highs then. The rise is almost entirely down to claimants who the Government say are working.
If these claimants were actually earning any money, then this would be seen in the average weekly Housing Benefit claim for those in work. As previously mentioned, the benefit is cut as incomes rise, so it could be that people are only claiming a few pounds a week to top up meagre incomes and pay soaring rents. The figures show however that this is far from the case. The average weekly Housing Benefit claim for those in work also hit a record high in the latest period and now stands at £90.44 a week. This is only just under £3 less than the average claim for those out of work. What this suggests is that most of these working Housing Benefit claimants have full awards, meaning they are only earning a few pounds at most above current unemployment benefit rates.
No matter how much the Government try to claim that official unemployment has fallen, the number of people who have incomes around the current level of out of work benefits is higher than ever. This is the reality of the recovery for those not enjoying George Osborne’s house price bubble. And with both in and out of work benefits being haphazardly slashed, not only are more people poor than ever before, but they are getting poorer.
Above graph from the latest DWP Quarterly Statistical Summary (PDF).
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