There are things to like and dislike about Kelly. Despite a disability and 4 kids she has done a degree and is doing a further training course. She wants to work. She's made the most of what is available and she has four presentable children. She's probably a good mother. On the negative side one wonders why a woman with an inheritable illness has had four kids and also why she chooses to be a useful fool for the Daily Mail. One also wonders where the fathers are and why they aren't paying maintenance (or are they actually paying child support direct to the CSA, which the Daily Mail has forgotten to mention?).
The Daily Mail article doesn't itemise Kelly's benefits to explain how they add up to £37,000, so I tried to estimate them using the government calculator. Incidentally, playing with the calculator will make you an instant fan of IDS's proposed simplification of the benefits system. I hadn't realised quite how Byzantine it had become.
I assumed that Kelly is paying the average rent for a 4 bedroom house in Chorley, which, using Rightmove, I estimate at £800 a month, and I also assumed that she is getting the maximum in disability benefits. Even so, I only reached a total of £34,836.88, more than £2,000 below the £37,000 she says she gets. The extra £2,000 could be because she is paying an above average rent, or because the training course she is doing is government sponsored, or she is simply taking into account the value of the benefits in kind such as free school meals for Liam and Daniel and her travel costs to hospital for NHS treatment.
So how can money be saved? The most obvious way is less expensive housing. Until Aaron is older she could manage with a 3 bed house, but it must be borne in mind that any property she is in must be adapted for her disability. It is probably cheaper to adapt 4 bed accommodation for her now, than to do it now for a 3 bed and later for a 4 bed house. Anyway, let's assume that Kelly is paying an above average rent for her accommodation and could save £2,000 a year by moving. That leaves her with an income of £35,000, still £9,000 above the £26,000 cap on benefits that is going to be imposed.
Next, could Kelly manage on less for child support? I calculate this at £10,279.36 in child tax credits and £3,146 in child benefit. Note that Kelly's child tax credits are higher because she has a child under one year old and will be going down in 6 months time. Now the really interesting thing about these benefits is that Kelly would not lose them if she started working. She keeps the child benefit as long as she is not paying a higher rate of tax. She keeps the child tax credit in full if on a low wage and it would be withdrawn in stages as her income went up. In other words the system is already designed to ensure that someone who has children is never better off not working. The rates are also already graded to take into account the economies of scale that can be made with a large family.
The final part of Kelly's income is the amount she gets for her own maintenance. I've assumed that she gets the highest rates of incapacity benefit of £4,752.80, disabled living allowance of £3,712.80 and mobility allowance of £2,592.2.
The long-term rate of incapacity benefit is significantly higher than income support. If Kelly was on income support she would only be getting £3,403.40 p.a. Whether you think that is justified depends on whether you think someone on incapacity benefit is a disabled person deserving sympathy or a work-shy scrounger. For the sake of argument we will assume that you are a Daily Mail reader and reduce Kelly's benefit by the difference of £1,349.4. But that still leaves Kelly with £33,650. We've still got to find £7,650 to dock off Kelly's income.
So shall we scrap Kelly's disability living allowance and mobility allowance completely, saving £6,305? Despite the fact that these are benefits that would not be withdrawn if she was working? Despite the fact that without them she would probably find it impossible to even look for work? I know someone in a wheelchair who has to pay £44 for a taxi every time she wants to go shopping, so Kelly's mobility allowance probably covers one shopping trip a week.
As far as I can estimate, the figure of £60,000, that Kelly says she needs to make it worth her while working, does not take into account the benefits she would continue to receive if she got a job.
So, in answer to the questions I posed earlier:
- Kelly gets such high benefits chiefly because of an unusual combination of a large family and physical disability. All 50.000 of the families affected by the benefit cap probably fit this profile.
- Can her benefits be reduced without causing her and her children undue hardship? Yes, but not to anywhere near the £26,000 level.
- Is such a high level of benefit a disincentive to work? Apparently not in Kelly's case, and since many of the benefits she gets would be retained if she was at work, this is a question to which the answer is no. However, I wonder why we think it important to get a disabled woman with four children, two of whom are under three, into work at all.
- Are working parents on a median wage actually worse off than Kelly? Since they have access to many of the benefits she has, I'd say probably not.