George Osborne’s tax breakdown reveals that a medium income family with a couple of kids receives more in what the government calls ‘welfare’ than they pay in income tax towards the social security bill.
The Treasury is to send out statements on government spending to every household in the country as part of a crude attempt to outrage tax payers by showing how much public spending goes towards benefit claimants. But what the figures show is that many of those tax payers are actually scrounging themselves.
When the Treasury say ‘Welfare’ they mean Child Benefit, Child Tax Credits, Working Tax Credits, Housing Benefit, Disability Living Allowance (DLA and its replacement PIP), out of work sickness and disability benefits, Carer’s Allowance, Income Support for Lone Parents and a range of smaller benefits. It also means those on the dole – which represents just 3% of the total spend. A significant amount of Housing Benefit and DLA goes to pensioners, along with those in work. Many people claiming Child Tax Credits are working, and all of those claiming Working Tax Credits. Child Benefit goes to everyone with kids, except for very high earners. Even some people claiming the dole may be working part time.
Using this definition of welfare, we are almost all net beneficiaries unless we are reasonably well off. A family with two children and an income of £30,000 a year will receive £1770.60 in Child Benefit payments annually. This is higher than the amount a family earning this sum contributes to ‘welfare’ – which the Treasury says is £1663. Depending on this family’s cirucmstances, they may also be eligible for Child Tax Credits of around £1000 a year. Suddenly the word scrounger doesn’t look so attractive.
Even someone non-disabled and without kids is still getting good value out of the Welfare State. Private insurance against sickness, disability or unemployment is eye-wateringly expensive and doesn’t provide anywhere near the same level of cover as social security benefits. The welfare state is good value for everyone except the very rich. That’s why the very rich want to take it away.
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