Technology limiting how benefit payments are spent could ease UK’s troubled economy.

Technology limiting how benefit payments are spent could ease UK’s troubled economy.

A political think-tank has revealed 6 in 10 people believe that the government should be able to control what claimants spend their benefit money on, therefore are calling on the govt. to use existing technology to do so.

Speaking at a fringe session of the Conservative party conference in Birmingham yesterday, Max Wind-Cowie (who runs Demos‘ progressive conservatism project) said technology, such as pre-payment cards which can be blocked for certain purposes, could be used to control the way people spend benefit.

He said the idea could be used to differentiate between benefit claimants that have paid into the welfare system through national insurance contributions and those that have not.

He also said that those who claim income-based jobseekers allowance, as opposed to contribution-based JSA, are spending the state’s money and should have their spending controlled; ‘If it’s my money you are spending I think we collectively should be free to lay down some ground rules on what you can spend it on.’

Contribution-based JSA is assessed on the amount of National Insurance you and your employer have paid in the last year or two.
Income-based JSA
is assessed on your current income, including interest from savings.

Matthew Mayo, head of business development at Mastercard in the UK and Ireland, went onto say that the technology already exists to prevent the spending of benefits on certain purposes; ‘The technology is available and whatever is decided from a public policy point of view, companies like Mastercard are able to support it as necessary.’

A survey (carried out by Demo) of 2,000+ people questioned on their attitude towards the idea reveals that:

  • nearly 6 in 10 believe that the government should be able to control what people spend their Universal Credit on.
  • nearly 9 in 10 said some groups should have their benefit expenditure controlled.
  • 75% believe claimants with gambling or drug addictions should have their benefit spending restricted,
    69% for criminals,
    60% for those with mental health problems,
    33% for those on sickness benefit,
    -And nearly 25% said stay-at-home single parents should have their benefit spending controlled.

The survey also found 68% think claimants should be stopped from spending their benefits on gambling, whilst 54% said claimants should be barred from spending on ‘things that are bad for your health’.

However MPs sitting on the fringe session panel were more cautious.

MP John Howell said:We [the public] have a view of people being on benefits as being scroungers, that is absolutely the case in a minority of interests, [but] it is not the case in the vast majority of people who have slipped on to benefits through no fault of their own.

‘We need to help them get off those benefits and not continue to show they are still part of a benefits society.’

MP David Mowat said the state has a ‘legitimate interest’ in how people spend their benefit, but said people should have the ability to ‘save up for a treat’ if they want to.

Since Landlord Referencing heard the first murmurs of the introduction of Universal Credit, whereby the landlord’s right to insist on direct rent payments if a tenant is in arrears will be abolished, we have been actively warning landlords, letting agents AND tenants about how they can protect themselves from the inevitable rent arrears that this will generate.

What are Credit Unions?

We have also lost count of the amount of times (over the past 2 years) that members of our community have suggested a ‘preloaded electronic Benefits Debit Card’ that would simply allow claimants to pay for certain items in certain stores, as well as making payments to their landlord and eliminating contraband.

At Landlord Referencing we believe tenants should have the right to decide if their rents are paid directly to their landlord – to help those on low incomes avoid debt and arrears.

Therefore if some form of ‘Social debit card’ was implemented, eliminating

  • spending on unnecessary & illegal items
  • benefit overpayment & error

we truly believe the money saved could generate a massive amount that could then be put back into our troubled economy to boost house-building, help the homeless, improve public sector services, etc…

Landlord Referencing Services sincerely hope that the government takes note of this idea, especially with the introduction of Universal Credit looming.

Universal Credit Explained In Full.

Landlords: what do you think about this idea?
Would you be more likely to take on tenants on benefits if this was implemented?

Should benefit claimants be able to have the ability to ‘save up for a treat’, if they have not made any national insurance contributions?

Tenants: what do you think about this idea?
Would this help you manage your money better?

Whatever your views are please let us know!

Author: News @ Tenant Referencing

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