Could older people's benefits be next for welfare cuts?

 
Older women having lunch on a bench Older people's benefits have largely escaped austerity cuts

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They receive around half of the government's welfare budget but so far older people have largely dodged the austerity bullet.

Unlike working age benefits, their pensions will go up by at least the rate of inflation for the next few years.

While child benefit is now means tested, bus passes, free TV licences and winter fuel payments still go to pensioners regardless of their income.

And that looks likely to remain the case until at least 2015.

Share the pain

But there have been murmurs on all political sides about whether older people should continue to enjoy protected status beyond the next election.

There may well be working age benefit and tax credit claimants who think it is right that older people share more of the pain.

The Institute for Fiscal Studies estimates means testing the help older people get for fuel and their TV licences could save £1.6bn alone.

And some older people are already sacrificing those benefits.

Start Quote

Sir John Hall

We don't need those benefits. We are comfortable, and there are many people like us”

End Quote Sir John Hall Former Newcastle United owner

Former Newcastle United owner Sir John Hall is a millionaire, living in the luxurious County Durham hotel he owns.

And yet the 79-year-old is entitled to free prescriptions, a state pension, a £200 winter fuel allowance, a bus pass and a free TV licence.

He acknowledges they are benefits he doesn't need.

He said: "We have paid the £200 fuel allowance each year to the Durham Foundation. They collect it from as many people as are willing and then distribute it to those who need it more than we do.

"I do not have a bus pass, and I think we pay the TV licence. We don't need those benefits. We are comfortable, and there are many people like us."

Ration benefits

Sir John's money then has ended up subsidising a lunch club for older men in Shildon in County Durham.

They're certainly not millionaires, and many believe it's time to ration those benefits to those who really need them.

Vernon Chapman said: "Nowadays this country's got more millionaires in it but they will still be getting all the entitlements when they do not need them."

And Richard Wheatley said: "There should be a guide, a level beyond which the payments are cut-off, say those getting more than £40,000 to £50,000-a-year."

But what about those pensioners who are reasonably comfortable but well short of Sir John Hall's status?

Older men's lunch club Some believe older people's benefits should be targeted at the less well-off

I caught up with some at the Tyneside Cinema's Silver Screen club in Newcastle. Most certainly don't consider they are wealthy. They are reluctant to see their benefits targeted.

John Goss said: "I do not consider myself to be wealthy at all. I do not think expats in their villas in the south of France should get a winter fuel payment. On the other hand why shouldn't I get it?"

Ray Garside agreed: "I think it is very hard to say because we are fairly comfortable we should not be getting these allowances when it's due to our efforts that we are in this position."

But Ray's wife Doreen does think there is some scope for sacrifices to help younger people.

She said: "Our generation has been lucky. They have been able to buy their house, they have seen them go up in value, and paid their mortgages off.

"They have got a working pension and a state pension so I feel that we are quite privileged."

Economic turbulence

Start Quote

Ray Garside

I think it is very hard to say because we are fairly comfortable we should not be getting these allowances”

End Quote Ray Garside

But although older people have seen many of their benefits protected they have not been left entirely untouched by recession.

Many private pensions have been badly affected by economic turbulence, annuities have been cut, and savings are earning pitiful amounts of interest.

In addition, studies suggest older people are much more vulnerable to inflation.

The argument for protecting older people has also been based on their inability to change their circumstances.

While those of working age can hope to get a job to get out of the benefit system, it is harder for older people.

And of course many have paid decades of taxes on the basis they could benefit when they retired only to see their savings eaten up by care costs.

But perhaps some may be able to work longer in order to support themselves and generate more taxes.

Paul Hancox, from Wallsend, in Tyneside, would certainly like that opportunity. He may be 66 but he still wants to carry on working as a marine engineer.

So far opportunities have been few and far between.

He said: "Employers are not supposed to discriminate on the grounds of age but you do not know what they are saying at HR.

"They might ask, is he going to have a heart attack when he's working for us, is he going to get ill? You can see the challenge for the employer."

Of course many more of us will be forced to work longer as the pension age begins to rise.

But it does seem increasingly likely that benefits for the current older generation will be scrutinised more closely beyond 2015, especially as more cuts to public spending seem likely.

Given older people currently get £200bn from the public purse, the temptation to eat in to that will be great.

But politicians may still tread a little carefully. There's one thing all older people have in common - they're the most likely to vote in elections.

 
Richard Moss, Political editor, North East & Cumbria Article written by Richard Moss Richard Moss Political editor, North East & Cumbria

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  • rate this
    0

    Comment number 68.

    "Bengit"
    I was trying to say that it is wrong to laugh at a family in a shopping queue when they have to put food back. It upset my children that an old woman was laughing at us. The full trolley she had consisted of rubbish food where as I had fruit and veg in mine. So at the end of the day if she wanted to pay lots of money for a load of rubbish that is up to her.

  • rate this
    +2

    Comment number 67.

    They have already cut benefits. The increased tax allowance for the retired has been frozen until working tax allowances have caught up. The winter fuel allowance was decreased by £50 from last year.
    For too long governments have supported industry by paying benefits to compensate for a low wage economy. Pay a living wage and re-balance the economy.

  • rate this
    +1

    Comment number 66.

    Experience of past Tory governments means that Tory Central Office "flies kites" whereby they plant stories in Tory compliant media eg Daily Mail and the BBC.
    If they get positive responses it becomes policy. If the feedback is negative then it is deniable.
    This is kite flying and we are being assessed. Don't ignore it as it will soon be too late and it will be seen as a concrete idea.

  • rate this
    -1

    Comment number 65.

    Not going to happen, not now not never, is there no end to the BBC's wish to help the socialists back to power. THIS IS AN IF, IT IS NOT FACT.

  • rate this
    -1

    Comment number 64.

    This is HERESAY, IT IS NOT FACT, IT IS MADE UP MISCHIEF MAKING BY THE DISINGENUOUS BBC WHO IS ROLLING IN OUR LICENSE FEE MONEY> NOT GOING TO HAPPEN NOW OR EVER .

  • rate this
    +1

    Comment number 63.

    To the music of Pink Floyd's tune "Anorther Brick in the Wall".
    'Hey ConDems, leave us oldies alone'

    We have paid in over a lifetime, leave us some dignity in our old age. WE AIN'T BEGGARS.
    I will be taxed on my pension, I will pay council tax, I will pay VAT. What is the matter Dave, Gideon and Tory boy Clegg, aren't we poor enough.

  • rate this
    -1

    Comment number 62.

    Running out of news BBC and having to make up stories. If the Government decided to cut benefits fort the elderly and he has NOT said he would, the BBC would rubbish it as they already have rubbished all cuts on the proviso that we do not have a deficit or acash problem and that we have money aplenty.

    The BBC need to go back to school.

  • rate this
    +1

    Comment number 61.

    Another pensioner here that pays council tax and income tax, because we are not treated differently from anybody else.
    A small point about retirement age- a large proportion of pensioners will have left school to work at 14, 15, or like myself, at 16. Few did 6th form or went to university. So 65 was fine for retirement.
    We've all been paying for a very long time.
    Still are.

  • rate this
    +2

    Comment number 60.

    58. bollywoodfan13

    The "old woman".... is it a crime to have a full shopping trolley?? I think you will find that most of the elderly do pay council tax.

    Re:They all moan about heating costs but an awful lot of them are outside in the cold shopping!.....what an immature/stupid comment, what are they supposed to do, sit in their homes and starve!!

  • rate this
    +2

    Comment number 59.

    bollywoodfan13, I think you must be reading the Daily Mail too often. I am a pensioner and I pay Council Tax. So do countless others. Council tax benefit, such as it is, is paid on the basis of financial circumstances, whether the recipient is old, young, employed, unemployed, whatever. pensioners are not 'exempt' from any taxes

  • rate this
    -2

    Comment number 58.

    Surely instead of target us families the elderly should also contribute to council tax etc. I have worked and am now ill but will have to pay some council tax with the little money we have coming in, yet the elderly are exempt, wrong just wrong, The other day we were a few pounds short for our shopping, yet old woman behind us thought it was funny with her FULL shopping trolley!

  • rate this
    -3

    Comment number 57.

    Why are all the elderly moaning about this?
    They are so lucky. I am probably not going to get a pension in thirty years or so. I am ill and my husband is my carer, we only just about get by but
    we make sure we cook home cooked food for our children and make sure they have clothes before anything else!! They all moan about heating costs but an awful lot of them are outside in the cold shopping!

  • rate this
    +1

    Comment number 56.

    Every time I get near to receiving a state pension the Govt changes the rules - it's happened to me twice now already. I have paid tax all my life and have only ever claimed child benefit in all these years. Looks like I will die before I receive a penny back.

  • rate this
    +4

    Comment number 55.

    Most people my age had to have 44 years insurance contribution to receive the basic pension. I would like a bus pass but what is the point there are no buses in this area. I also had to do 2 years national service, so I think I have paid my whack into the government coffers.. The £200 fuel allowance does not go far. I have just paid £895 for half a tank of oil, We re being robbed enough.

  • rate this
    +3

    Comment number 54.

    My suggestion is that when you sign up to any of these age related benefits the system checks that you have paid NI for a minimum of 35 years. What is wrong is that someone who, say was in prison for 30 years and has contributed nothing into the state gets the same as hard working people who have paid tax and NI.

  • rate this
    +2

    Comment number 53.

    The bus pass only costs money when the holder uses it. As women's retirement age increases so the eligibility for the pass increases. This means that within a few years it will only go to people over 65, 66 then 67. The Libs used to criticise others about green issues, yet Clegg doesn't see that old people leaving their cars behind and using buses is good for the environment.

  • rate this
    +2

    Comment number 52.

    I left school in 1965 aged 15. In 2015 when I am 65 I would have paid tax and NI for 50 years. Have I not paid in enough. In the 1980s we were encouraged to take out extra private pensions by the Tories. They promised that any extra pension I got would not be taxed. Yet this ConDem lot have broken that pledge.
    We have paid enough so don't steal our benefits just when we need them.

  • rate this
    +1

    Comment number 51.

    It appears that the Torys beleive that you are never to old to stop giving!

  • rate this
    0

    Comment number 50.

    It would be rather easy to sort out the means testing of Winter fuel/bus passes. All those who get Pension Credit can have it. Those that don't won't receive the freebies.

  • rate this
    +2

    Comment number 49.

    14.
    USAperson Fortunately we have not decended yet to where our poor are paid in food stamps and cannot afford decent medical care, but this present shower will do their best to import even more garbage ideas from the land of the not so free!

 

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