Furlough vs benefits
Discussion
Suspect this will be an unpopular view on here, but I mentioned this on another thread and thought it worthy of it's own. Furlough is there to help people unfortunate enough not to have a job during covid, but why is this misfortune more important than someone losing a job due to redundancy in normal times for example? One gets 80% of their wages paid, the other gets to claim universal credit.
The point was made that companies were told to close, so the government had to offer support when the hardship was caused by them, however it was only hospitality and certain other sectors that were told to close. Many businesses may not have closed if furlough was not available, so why shouldn't their employees have claimed benefits, as they would have had too if laid off due to lack of work in normal times?
I suppose my main point though is not that furlough was too generous, as I do agree it was needed, more that benefits are not generous enough to those in a similar situation to those on furlough.
Clearly the issue with this is identifying those who are in that situation compared to the habitual benefit claimants, but this is an argument for a tapered benefit system. Lose a job you have held for more than say 6 months, get the equivalent of furlough for a month, then taper it every month until down to current levels (or even lower) after say 3 months? Surely this would encourage habitual claimants into longer term work, and ensure those genuinely in need were helped fairly compared to those who have been furloughed recently?
I do understand that this is likely to cost more in the short term, but in the long term if more are in work it may actually help the tax take.
Maybe I am thinking rather simplistically, but I do think it is a fair question to ask.
The point was made that companies were told to close, so the government had to offer support when the hardship was caused by them, however it was only hospitality and certain other sectors that were told to close. Many businesses may not have closed if furlough was not available, so why shouldn't their employees have claimed benefits, as they would have had too if laid off due to lack of work in normal times?
I suppose my main point though is not that furlough was too generous, as I do agree it was needed, more that benefits are not generous enough to those in a similar situation to those on furlough.
Clearly the issue with this is identifying those who are in that situation compared to the habitual benefit claimants, but this is an argument for a tapered benefit system. Lose a job you have held for more than say 6 months, get the equivalent of furlough for a month, then taper it every month until down to current levels (or even lower) after say 3 months? Surely this would encourage habitual claimants into longer term work, and ensure those genuinely in need were helped fairly compared to those who have been furloughed recently?
I do understand that this is likely to cost more in the short term, but in the long term if more are in work it may actually help the tax take.
Maybe I am thinking rather simplistically, but I do think it is a fair question to ask.
R-t6t6s said:
I suppose my main point though is not that furlough was too generous, as I do agree it was needed, more that benefits are not generous enough to those in a similar situation to those on furlough.
Have you been in the position of having to claim benefits recently? Unfortunately, I have. Just not for very long (couple of weeks). The amount I'd be given was ample to cover my rent, food and bills. But not a lot else after. I was impressed after reading the horror stories.
It kept me above water - whilst motivating me to get out and find work. Which I did very quickly. The chances of me going and driving lorries at night if I could get paid decent money to sit at home are zero. I absolutely hate the job. I feel physically nauseous at the start of my 4 on. But it's better to have people like me working and earning, paying taxes than motivating them to stay at home. I will find something else - when the economy picks up. Until then I'll be grateful to be working.
FTIW... I'd bin the furlough scheme for all businesses and tell everything to open right now. Too many companies that could be open choosing to let the government fund their wait and see approach.
I think furlough government payments was brought in far too soon as a knee jerk reaction, personally.
Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
Argleton said:
I think furlough government payments was brought in far too soon as a knee jerk reaction, personally.
Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
Well it’s likely that thousands of people on furlough will shortly lose their jobs. They will be getting that lesson you want them to have. Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
Matt.. said:
Argleton said:
I think furlough government payments was brought in far too soon as a knee jerk reaction, personally.
Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
Well it’s likely that thousands of people on furlough will shortly lose their jobs. They will be getting that lesson you want them to have. Far too many people dont save money - I'm aware some simply can't - but I think it would have been an 'education' for a lot of people with no saving and a realisation that they need that buffer.
milkround said:
Have you been in the position of having to claim benefits recently?
Unfortunately, I have. Just not for very long (couple of weeks). The amount I'd be given was ample to cover my rent, food and bills. But not a lot else after. I was impressed after reading the horror stories.
It kept me above water - whilst motivating me to get out and find work. Which I did very quickly. The chances of me going and driving lorries at night if I could get paid decent money to sit at home are zero. I absolutely hate the job. I feel physically nauseous at the start of my 4 on. But it's better to have people like me working and earning, paying taxes than motivating them to stay at home. I will find something else - when the economy picks up. Until then I'll be grateful to be working.
FTIW... I'd bin the furlough scheme for all businesses and tell everything to open right now. Too many companies that could be open choosing to let the government fund their wait and see approach.
I must admit I haven't, but it sounds to me that there is plenty of room for a reduction in the long term rate from what you have said? I get the point about being paid to sit at home, but if you know in a couple of months you will really be down to the bare minimum (so less than now) surely that would be a motivation not to get to that point, and find a job asap? Unfortunately, I have. Just not for very long (couple of weeks). The amount I'd be given was ample to cover my rent, food and bills. But not a lot else after. I was impressed after reading the horror stories.
It kept me above water - whilst motivating me to get out and find work. Which I did very quickly. The chances of me going and driving lorries at night if I could get paid decent money to sit at home are zero. I absolutely hate the job. I feel physically nauseous at the start of my 4 on. But it's better to have people like me working and earning, paying taxes than motivating them to stay at home. I will find something else - when the economy picks up. Until then I'll be grateful to be working.
FTIW... I'd bin the furlough scheme for all businesses and tell everything to open right now. Too many companies that could be open choosing to let the government fund their wait and see approach.
Agree on furlough btw, its served its purpose now, except maybe for hospitality and other sectors still not able to open.
R-t6t6s said:
Furlough is there to help people unfortunate enough not to have a job during covid.
Maybe approach it slightly differently; furlough is there to help businesses retain employees. If businesses make employees redundant, and life subsequently opens up, they have to rehire, which takes time and money. It would slow down a recovery. Paying businesses to retain employees means they're in place and ready to go at short notice.There are lots of potential issues with furlough, however on balance I believe it's better than making people redundant.
R-t6t6s said:
milkround said:
Have you been in the position of having to claim benefits recently?
Unfortunately, I have. Just not for very long (couple of weeks). The amount I'd be given was ample to cover my rent, food and bills. But not a lot else after. I was impressed after reading the horror stories.
It kept me above water - whilst motivating me to get out and find work. Which I did very quickly. The chances of me going and driving lorries at night if I could get paid decent money to sit at home are zero. I absolutely hate the job. I feel physically nauseous at the start of my 4 on. But it's better to have people like me working and earning, paying taxes than motivating them to stay at home. I will find something else - when the economy picks up. Until then I'll be grateful to be working.
FTIW... I'd bin the furlough scheme for all businesses and tell everything to open right now. Too many companies that could be open choosing to let the government fund their wait and see approach.
I must admit I haven't, but it sounds to me that there is plenty of room for a reduction in the long term rate from what you have said? I get the point about being paid to sit at home, but if you know in a couple of months you will really be down to the bare minimum (so less than now) surely that would be a motivation not to get to that point, and find a job asap? Unfortunately, I have. Just not for very long (couple of weeks). The amount I'd be given was ample to cover my rent, food and bills. But not a lot else after. I was impressed after reading the horror stories.
It kept me above water - whilst motivating me to get out and find work. Which I did very quickly. The chances of me going and driving lorries at night if I could get paid decent money to sit at home are zero. I absolutely hate the job. I feel physically nauseous at the start of my 4 on. But it's better to have people like me working and earning, paying taxes than motivating them to stay at home. I will find something else - when the economy picks up. Until then I'll be grateful to be working.
FTIW... I'd bin the furlough scheme for all businesses and tell everything to open right now. Too many companies that could be open choosing to let the government fund their wait and see approach.
Agree on furlough btw, its served its purpose now, except maybe for hospitality and other sectors still not able to open.
Which is not a lot. But say £400 for rent (shared). £100 for bills. It leaves £300 for food and other stuff. Some will say that's too much. But I think it's enough to survive but not really to enjoy living. So it's a safety net which encourages people to get back to work.
The nice thing about universal credit - is if I lose my job they automatically pay me that amount again within 6 months. If my hours/wages go down they top up my income. It works off the PAYE system and works pretty well.
It made me feel safe taking a job I hate. But encourages me to get that job knowing long term I will find something else. The balance is just about right imo. You will never be worst off working on universal credit. And it's simple for the end user. But you won't hear that in the media.
RonaldMcDonaldAteMyCat said:
Maybe approach it slightly differently; furlough is there to help businesses retain employees. If businesses make employees redundant, and life subsequently opens up, they have to rehire, which takes time and money. It would slow down a recovery. Paying businesses to retain employees means they're in place and ready to go at short notice.
There are lots of potential issues with furlough, however on balance I believe it's better than making people redundant.
I agree that the furlough scheme was sensible for that reason, but surely paying 80% of wages wouldn't be needed, just a sensible retainer amount (still paid by government)? Again I am not arguing that 80% wasnt right, just that it appears unfair when compared to benefits.There are lots of potential issues with furlough, however on balance I believe it's better than making people redundant.
Do they need to be compared for fairness?
On the basis business' demand is only going to drop off temporarily, the need to drop workers is also temporary. Business needs to retain workers. Workers need money to cover their usual living expenses.
It's an abnormal solution in abnormal times.
On the basis business' demand is only going to drop off temporarily, the need to drop workers is also temporary. Business needs to retain workers. Workers need money to cover their usual living expenses.
It's an abnormal solution in abnormal times.
The answer to these sorts of questions is often, it saves HMRC money in the long term.
Why do mums get the money in divorces? Long term, it saves gov money in benefits.
Why do furloughed employees get better terms? Long term, it saves gov money in benefits.
If you add up the money for an employee made redundant, earning less, (probably over lifetime), paying less taxes, perhaps claiming.
Compare it to the cost of furlough, in exchange for a dice role for that employee being kept on.
The maths probably works for HMRC.
Why do mums get the money in divorces? Long term, it saves gov money in benefits.
Why do furloughed employees get better terms? Long term, it saves gov money in benefits.
If you add up the money for an employee made redundant, earning less, (probably over lifetime), paying less taxes, perhaps claiming.
Compare it to the cost of furlough, in exchange for a dice role for that employee being kept on.
The maths probably works for HMRC.
RonaldMcDonaldAteMyCat said:
Maybe approach it slightly differently; furlough is there to help businesses retain employees. If businesses make employees redundant, and life subsequently opens up, they have to rehire, which takes time and money. It would slow down a recovery. Paying businesses to retain employees means they're in place and ready to go at short notice....
Not convinced.If whole sectors were shut down, where are the employees going to go? Rehiring the staff you laid off should be easy once your business resumes.
Of course some people might find other employment and tell you to stuff it. But then companies could have been inventive about retainers etc while the government paid less out, more inline with UC. Or when the curtains lifted employees could go elsewhere - then pay more to ensure you attract the ones you really want.
Relaxing employment rules to avoid companies having to make big payouts on a temporary basis, and encouraging them to offer staff safety blankets themselves where they could would, to me, have been a better prospect as I'm far from convinced the extent of the furlough implemented will meet the original objectives.
I suspect a lot of people on furlough will be laid off anyway in the next 6-9mths.
RonaldMcDonaldAteMyCat said:
Do they need to be compared for fairness?
On the basis business' demand is only going to drop off temporarily, the need to drop workers is also temporary. Business needs to retain workers. Workers need money to cover their usual living expenses.
It's an abnormal solution in abnormal times.
They should certainly be compared for fairness, as not to do so would be pretty negligent when looking at policy. On the basis business' demand is only going to drop off temporarily, the need to drop workers is also temporary. Business needs to retain workers. Workers need money to cover their usual living expenses.
It's an abnormal solution in abnormal times.
I suppose having compared them for fairness it could be considered an abnormal solution in abnormal times and therefore fair in the circumstances.
Consider this scenario though. One employee loses job in February through no fault of their own- claims universal credit straight away. Another employee loses job in April - furloughed until whenever the scheme ends, then claims universal credit.
You may say that is just how it is, but I think it is valid to consider if it could be done better?
R-t6t6s said:
...
You may say that is just how it is, but I think it is valid to consider if it could be done better?
Every ounce of public expenditure should be under constant review to check if it could be done better and for less money. We once again have a large deficit, and have had a huge debt for a very long time that will of course only get worse as a result of the increasing deficit.You may say that is just how it is, but I think it is valid to consider if it could be done better?
We never had "austerity". And trying to inflate ourselves out of the predicament is not pain free either. It may be less transparent but it still costs and people will still suffer. There is no pain free solution. We have to better control expenditure and look at ways we can grow the country's income.
Argleton said:
Not if they've been saving, which they should be doing. It's really not that difficult.
What's the view like up there in the ivory tower? The main reason a lot of people don't save is that they struggle to make basic ends meet. It's more than a little insensitive to just basically say it's not difficult to save. If you were on a low wage paying rent/ council tax and trying to look after 2 kids I'm pretty sure your savings account would be pretty low. Yes there are people that earn good money that dont save but this whole covid scenario nobody planned for. Hindsight is a wonderful thing but it would appear that if anything the lockdown and company shutdowns should have started a week or two earlier. The companies that are now abusing the scheme should be brought to account almost like a post war trial scenario. I know of at least one company paying his staff cash and banking the furlough money for example. Another one is using the furlough money to keep staff off so he can have a little breather and semi holiday.
I think the scheme should be ended for everything other than hospitality/ tourism shortly. There's going to be a shock but the sooner it comes the sooner we will get over it.
milkround said:
As a 30 something-year-old with rent to pay I got around £800.
Which is not a lot. But say £400 for rent (shared). £100 for bills. It leaves £300 for food and other stuff. Some will say that's too much. But I think it's enough to survive but not really to enjoy living. So it's a safety net which encourages people to get back to work.
I think many need to bear in mind that universal credit only offers a safety net for a household if it is a one earner household.Which is not a lot. But say £400 for rent (shared). £100 for bills. It leaves £300 for food and other stuff. Some will say that's too much. But I think it's enough to survive but not really to enjoy living. So it's a safety net which encourages people to get back to work.
A large proportion of the households in the country are dual income and if one partner loses their job you may still be ineligible for universal credit, regardless of fixed outgoings. What most are likely to receive is the £74.35 a week you get in contribution based JSA and that only lasts for six months.
Given that Furlough covers 9 million people it is providing a safety net for millions who wouldn't have one from the welfare system.
Edited by JagLover on Saturday 20th June 07:06
Second Best said:
Doesn't quite work that way for some. I have savings that I could put away into when I earned my (reasonable) salary. However on furlough, I've lost the benefits that come with my role (on-call) so realistically I'm now living on about 35% of my income. I've been burning through my savings just to keep the mortgage payments going (I live in London) and I'm now having to consider selling my cars to free up money if I don't have a job to go back to.
It's very easy to comment when you live in buckf
knowhere or earn millions, but for the average adult it's a little bit more important than your crayons.
No option for a mortgage payment holiday to take the pressure off?It's very easy to comment when you live in buckf
knowhere or earn millions, but for the average adult it's a little bit more important than your crayons.Sorry but if the goverment told me to close my business and not earn and go on normal universal credit I'd tell them to do one, refuse to close and protest. I can imagine the same country wide. The scheme stopped a full on rebellion. You cant close down the country and offer nothing without cival war imo.
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