Contributory benefits to be means tested.
by Gareth Morgan on February 24, 2011
The bill includes powers to allow for the introduction of an earnings taper, so that ESA and JSA (there will be no Contribution Based or Income Based any more as IB JSA & ESA are abolished) will be reduced at a constant rate as earnings increase in the same way as universal credit. This rate will be prescribed in regulations.
This shouldn’t affect the incomes of anyone whose income is topped up by Universal Credit, as a penny drop in one means a penny drop in the other, but it will, again, affect those who, for example, have partners in work. That’s assuming that it will be couples earnings that are taken into account. If it affects only the individual then it might have been simpler to add the benefits onto the relevant earnings.
Once more, it will be the regulations that will give us the real intention and effect of the power.
Comments
There is another group it penalises – compared to the current situation – as I understand it.
At the moment, I’m on ESA, and can work (permitted work, higher level) 20 hours a week, earning up to 96 pounds. (for one year on, and one year off, but that’s a seperate and barking mad issue).
This is without it affecting benefits.
Both the notional earnings for self employment, and the lack of a similar ‘high’ earnings disregard means that disabled people (such as myself) attempting to get a small buisness off the ground by working odd hours as and when we can, and making little if any profit will be hit extremely hard.
The notional earnings mean that working 20 hours a week I’ll have a notional 120 quid or so coming in (despite making an actual loss) – and then the taper kicks in.