A woman whose welfare was cut after she spent a £22k bingo win says she now can’t afford food or rent.
What would you do with a windfall of £22,000? Jean Jones decided to take her first holiday in eleven years, get a special chair for her arthritis, replace some household furniture and buy some colouring books.
But, according to the Government’s Department of Work and Pensions, she should have saved the cash for rent, bills and other necessities. The reason? Jean doesn’t work and before her win got her income from government benefits.
The government’s rules say that if you have savings over £16,000 you don’t qualify for Universal Credit, the benefit Jean got most of her money from. But you also don’t qualify if you have “deliberately spent savings in order to… get more benefits.” So even though Jean says she doesn't have any of her jackpot left, her welfare payments have been stopped. That leaves her with almost no income - Jean says she subsequently can’t afford food, transport or rent.
Are these rules fair? Well, as always, people disagree. Some think Jean was wrong to treat herself when other people give up something (i.e. part of their income in taxes) to pay her bills. Others might argue that her desire for a holiday and some colouring books was entirely reasonable and she shouldn’t be punished for that.
Welfare comes out of the government’s budget, which is funded by taxes. In the UK, the idea is that welfare should only go to people who have no other way of paying their bills. Of course, that doesn’t have to be the case. The British could instead decide that everybody gets payments from the government, regardless of their wealth (this is what Universal Basic Income is).
In that instance, one of two things would happen. Firstly, the welfare pot could stay the same size. But as more people are claiming, each recipient would get much less money. That would have the biggest impact on the poorest, who need welfare money more than the rich.
Secondly, the government could put more money into the welfare pot by taking cash from other areas of government spending, raising taxes and/or taking out debt. But that approach would be criticised by people who think there are more important spending priorities than UBI (the NHS, say), or that higher taxes are bad for people and economies, or that lots of government debt leads to big financial problems down the line.
We live in the same neighbourhood, area, country, and planet with about seven billion other people, and our economies inevitably overlap all the time. That means the economic choices we make might have consequences outside our control, and someone else’s choices might have a direct effect on your economy – even if you’ve never met them before…