Welfare benefits: A safety net or a burden on the state?

Claiming benefits could help you to get out of debt...

A joke that spread across Twitter recently said that ex-News of the World journalists shouldn’t fear losing their jobs. After all, they’d written for years that the unemployed get handouts of £50,000 and five bedroom houses to live in, so they’d know exactly what to do to live high on the hog.

Of course, the reality is much different, and the vast majority of claimants use benefits to help them when they’re in a fix. Surprisingly there are many of our clients who don’t claim benefits as they don’t want to be a “burden on the state”.

Is it right that this fear, driven by pride as much as the media’s moral outrage, means they don’t claim what they’re entitled to?

Welfare Benefits

Our Welfare Benefits team are among the unsung heroes of CCCS (to highlight the excellent work they do, we’re spending the day with them on Thursday). The team advise clients on the benefits they could be missing out on and how to claim them, in an effort to help maximise their income.

The benefits they advise on most commonly are around unemployment; a client who has lost their job and needs to claim Job Seekers Allowance (JSA) to help to get them through until their situation improves. Others need help with tax credits, pensions, housing benefits and childcare costs.

But what about that phrase, “burden on the state”?

An anecdotal example: One of our clients was a single parent with a 4-year-old child. She was working, earning just under £19,000 and was claiming Child Tax Credits to help with care costs. She came to CCCS with a debt of around £17,000 and what looked like a fairly healthy surplus of money (which meant she had a number of options open to her to pay off the debt).

However, when we looked at the budget in more detail, it became apparent that she didn’t actually have a surplus; her figures hadn’t been realistic.

It looked like there was no option for her but to look at bankruptcy.

She was renting privately and almost half her monthly wage was going on her flat, so we asked her if she had looked into getting help with her rent. She replied that she wouldn’t be entitled to anything as she was working and earning.

After an assessment with the Welfare Benefits team, they recommended that she apply to her local Council for Housing Benefit and Council Tax Benefit. The claim was successful and as a result the client was able to offer a reasonable amount to her creditors as well as manage a sustainable, realistic budget which she couldn’t have done before.

So rather than this client becoming another bankruptcy statistic and all of the money owed being written off, benefits helped her retain the flat and her dignity. She paid back her debt in full.

Burden on the state

Once we start looking at individual cases, the phrase ‘burden on the state’ looks more and more flimsy.

At CCCS we find that even a small amount of extra income, such as the basic rate of Child Tax Credit, might mean the difference between being able to offer a repayment to creditors and having to look at some form of insolvency. If you don’t ask, you don’t get, and our Welfare Benefits team are always happy to check on a client’s behalf, to see if they can help.

We frame it in this way: we ask them how long they’ve been paying National Insurance for and explain that they should never hold back from claiming what they’re entitled to.

The benefit system is there to give a leg up to those who need it and are there to supplement earnings. From a debt counselling perspective, it’s vital that all clients look at ways to maximise their income.

This is where the CCCS Welfare Benefits team play a vital role. They’re highly knowledgeable in all aspects of benefits and can provide help and advice for those who may need extra assistance.

If you need help, contact us for debt advice; if we find you’re not receiving the benefits you’re allowed to claim, we can advise you on that as well. You’ll not be a burden with us.