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The Unemployed on Supplementary Benefit: Living Standards and Making Ends Meet on a Low Income*

Published online by Cambridge University Press:  20 January 2009

Marjory Clark
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Abstract

The level of income which supplementary benefit provides can be viewed as the government-approved minimum income level for this country. This article reports on a study which looked at a particular group of people who are living on this state minimum, and investigated how they were managing financially. The study discovered that most of the male unemployed claimants who were interviewed had suffered an appreciable drop in their incomes and living standards compared with when they were in work, and this caused budgeting problems as they tried to cut back on their normal expenditure or to supplement their weekly income in various ways. Contrary to popular belief, the study found that it was the unemployed men with families who were least able to cope, although for them the relative drop in income between work and unemployment was less. They appeared to be hard pressed both in and out of work, and had less in the way of savings and stocks of clothing to cushion them for their period on benefit. The paper concludes, with the Supplementary Benefits Commission, that supplementary benefit incomes for the unemployed, especially those with families, are barely adequate to meet their needs at a level which would allow them to participate fully in the society in which they live.

Type
Article
Information
Journal of Social Policy , Volume 7 , Issue 4 , October 1978 , pp. 385 - 410
Copyright
Copyright © Cambridge University Press 1978

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References

1 In justifying this approach, J. K. Galbraith is often quoted – ‘People are poverty-stricken when their income, even if adequate for survival, falls markedly behind that of the community. Then they cannot have what the larger community regards as the minimum necessary for decency, and they cannot wholly escape, therefore, the judgement of the larger community that they are indecent’ – quoted in Stanton, D., ‘Determining the Poverty Line’, Social Security Quarterly, Spring 1973, 18–32.Google Scholar

2 Supplementary Benefits Commission Annual Report, 1976, Cmnd 6910, HMSO, London, 1977. p. 3.Google Scholar

3 See Hill, M., Harrison, R. M., Sargeant, A. V. and Talbot, V., Men Out of Work, Cambridge University Press, London, 1973Google Scholar; Daniel, W. W., A National Survey of the Unemployed, Political and Economic Planning (PEP), London, 1974Google Scholar; and the follow-up study, Daniel, W. W., Where are they Now?, PEP, London, 1977.Google Scholar

4 See Daniel, , A National Survey of the Unemployed and Where are they Now?Google Scholar. The Department of Health and Social Security (DHSS) is sponsoring a cohort study of the unemployed commencing in the summer of 1978. It intends to examine questions of financial incentives to work, recurrent unemployment, and benefit coverage.

5 The Department of Employment carried out fairly detailed sample surveys of the characteristics of the registered unemployed in 1973 and 1976. See Department of Employment, Gazette, March 1974 and June, September and October 1977Google Scholar. Also published in the Gazette are monthly counts of the unemployed by sex, quarterly counts by occupation and duration of unemployment, and biannual counts by age.

6 DHSS, analysis of 100 per cent count, November 1977.Google Scholar

7 34 per cent of the married women registered for work at the end of 1977 were receiving no benefit – DHSS, November 1977.Google Scholar

8 9 per cent of the registered unemployed were receiving SB as well as unemployment benefit at the end of 1977 – DHSS, November 1977.Google Scholar

9 ‘Unemployed Men receiving Supplementary Benefit in 1974’, Social Research Branch, DHSS, London. The survey covered a national sample of men aged from sixteen to sixty-four and amounted to 0.6 per cent of all unemployed men on SB at the time. Further details of the study can be obtained from the Social Research Branch, DHSS, on request.

10 Department of Employment, Gazette, September 1977, Table 111.Google Scholar

11 The Department of Employment now uses CODOT as an occupational classification, so that the only direct comparison which can be made is with its ‘general labourers’ category. In September 1974, 46 per cent of all unemployed men were so classified, compared with 58 per cent of the sample of unemployed men on SB here under discus sion. See the Gazette, 85:9 (1977), Table 109.Google Scholar

12 For a summary of recent research on the psychological effects of unemployment, see Harrison, R., ‘The Demoralising Experience of Prolonged Unemployment’, Department of Employment, Gazette, 04 1976, 339–48.Google Scholar

13 ‘Unemployed Men receiving Supplementary Benefit in 1974’.

14 Office of Population Censuses and Surveys (OPCS), The General Household Survey, 1973, HMSO, London, 1976Google Scholar, special analyses by the DHSS.

15 By ‘family’, I mean couples with dependent children.

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18 ‘Unemployed Men receiving Supplementary Benefit in 1974’.

19 These data were taken from supplementary benefit casepapers and thus only reflect what was said to the local DHSS officers when the unemployed men made their statements claiming SB.

20 Only 4 per cent had over £325 in savings recorded in the casepaper, that is, the sum above which a tariff is levied on assumed interest. The sum is now £1,200.

21 The seminal work using SB levels as a measure of those in need is Abel-Smith, B. and Townsend, P., The Poor and the Poorest, George Bell and Sons, London, 1965Google Scholar. Their measures differ slightly from the one used in the study here under discussion (see foot note 22).

22 Of course much depends on where this line is drawn, and some would argue that SB claimants by definition are all ‘on the line’ rather than above it or below it. However, for the present comparison, basic entitlement includes only the living allowance known as ‘the scale rate’ (which varies according to household and family circumstances), and the allowance covering rent or rates (or both).

23 The wage stop meant that unemployed men whose incomes in work had been below SB levels had their allowance reduced so that they would be no better off on benefit. It was abolished in July 1975.

24 Figure derived by the Department of Employment from its 1974 New Earnings Survey, HMSO, London, 1974.Google Scholar

25 Net income comprises gross earnings plus family allowances less income tax and national insurance contributions at 1974 rates.

26 As only 9 per cent of these men said that they had received a rent rebate, and 4 per cent a rate rebate, this may not be a serious omission.

27 Information on the expenditure patterns of SB households from the Family Expenditure Survey shows that a third of the weekly income goes on food and nearly two-thirds is spent by the time the basic essentials of food, housing, and fuel, light and power have been paid for. See Supplementary Benefits Commission Annual Report, Table 2:3.

28 This standard was devised by P. G. Gray (see Gray, P. G. and Russell, R., The Housing Situation in 1960, Social Survey, Central Office of Information, London, May 1962Google Scholar) and it comprises a bedroom for each married couple, and for each person over twenty. Each pair aged twenty or under should share a bedroom, with the proviso that those aged from ten to twenty should share with someone of the same sex.

29 General Household Survey figures on overcrowding are not directly comparable with those used in the study here under discussion, in which ‘families’ exclude household members who were not dependent on the unemployed claimant. The nearest comparable category in The General Household Survey is households with three or more children, 20 per cent of which were overcrowded in 1974.

30 See Department of Employment, Family Expenditure Survey, HMSO, London, 1074. Table 53, p. 104.Google ScholarPubMed

31 See DHSS, Supplementary Benefit Handbook, Supplementary Benefit Administration Paper 2, HMSO, London, 1974, p. 15.Google Scholar

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38 In total, 22 per cent of unemployed men on SB had received at least one lump-sum payment from the SBC in the preceding year, and men with two or more children were significantly more likely to have received this kind of help. Apart from clothing and shoes, the main item for which payment was made was bedding.

39 Special analysis by the DHSS, based on assumptions similar to those of Supplementary Benefits Commission Annual Report, Table 9:6. The calculation assumes that of the three children two were under five and one was aged between five and ten.

40 Low Incomes: Evidence to the Royal Commission on the Distribution of Income and Wealth by the Supplementary Benefits Commission and the Deportment of Health and Social Security, HMSO, London, December 1977.Google Scholar