Media & Press ReleasesFor the Press
Press release: £5 earnings cap is turning benefits claimants into criminals
04 Dec 2009
A cap of just £5 on the amount people on benefits are allowed to keep when they get a job is leaving people little choice but to work cash-in-hand and break the law, says a coalition of leading charities.
The Need not Greed coalition, whose members work with people on benefits around the country, is calling on the government to increase the cap or ‘earnings disregard’ to £50 for single people and £100 for a couple, in the pre-budget report on 9th December. It claims the current limit, which is equal to less than one hour’s minimum wage and has not been increased since 1988, stops people declaring work, turning them into criminals.
“Many people our charities help are working while on benefits, but do not tell the Jobcentre because they would then have to surrender most of their wages. It is turning hard-working, honest benefit claimants into criminals” says Maeve McGoldrick, coordinator of the campaign. “These jobs are a vital first step back to long term employment but the cap criminalises people rather than allowing them to get back into work. We estimate up to 20% of people work informally.”
George, 37, has been unemployed for many years. “I got my plumbing qualifications this year, and want to set up my own plumbing business. At the moment I only get a few hours work a week. I can’t tell the Jobcentre because I would lose all the money, and I need it to buy equipment. I hate defrauding the system. Hopefully by the New Year I will have enough clients to be able to come off benefits and set up full time, but until then I don’t have a choice.”
People who choose not to break the law are left stuck on benefits. Olanike Omole, 45, has been unemployed for 6 months and is desperate to get a job. “I’ve written hundreds of applications and had several interviews for full time jobs, but I’m just not having any luck,” she says. “I’d like to take some of the part time jobs I’ve seen, as a first step back into work, but I know that I’d be no better off.”
The TUC and Oxfam are members of the coalition. Brendan Barber of the TUC said, “In a time of high unemployment people should be given every chance to make their way back into work. Benefit rules need to change so that people are not forced to decide between desperate poverty and illegal, vulnerable work.”
Oxfam’s UK Poverty director Kate Wareing said “From our work with partners and communities around the UK we know that the benefits system traps people in poverty. Increasing the earnings disregard is a vital first step in enabling people to move off benefits into a secure, well-paid job.”
Anyone interested in finding more about the earnings disregard campaign can download a briefing from www.neednotgreed.co.uk
ENDS