by Allan Norman
I had more sympathy for the arguments of Mr Casewell than I expected to. His wife had a disability and received direct payments. She paid them to him as her carer. They were on benefits. He argued that as direct payments were disregarded as income, he should effectively be entitled to keep the direct payments on top of their benefits. His case went to the Court of Appeal .
Why did I expect not to be sympathetic? Two reasons.
Changing character
Firstly, the legal argument is weak. That treat I bought from the delicatessen may have been a chocolate muffin when I ate it, but it was no longer a chocolate muffin when I went to the toilet the following morning. Some things change their character as they pass through us, and direct payments are such a thing. It’s no surprise that the court pointed out that had the payment had been paid onto anyone outside the household, the recipient wouldn’t have tried to argue it was still a direct payment and therefore exempt income.
Secondly, I am troubled by a move from incentivising to remunerating informal care. The former is about encouraging the continuation and growth of informal caring. The latter is about transforming informal care into a new sector of the economy. The details of my concerns need not trouble us. Suffice to say they include bigger issues about the commodification of care, state intrusion, and models of sustainability.
The poverty trap
The reason I nonetheless find myself sympathetic to Mr Casewell’s argument is that what it highlights (or perhaps, what is hidden beneath the surface but needs to be highlighted) is the pernicious effect of the poverty trap. The poverty trap is a term that has been used for the way in which the interaction of different parts of government policy, particularly those relating to benefits and work, have the effect that a person in poverty finds it very difficult to break out of the cycle of poverty.
In particular, a person on a subsistence benefit such as income support will be allowed to keep the first few pounds that they earn (and so be better off provided that there are no significant costs involved in earning) but thereafter additional earnings are deducted pound for pound from their subsistence benefits.
This means that all their additional work achieves nothing and the cost of working may outweigh the benefits. Once their hours or their income reach a level when they are no longer dependent on subsistence benefits, other factors kick in. Rent and council tax between them take up 85p of each additional pound earned, which would be seen as a cripplingly high penalty if it were a tax band applied to the rich. And coming off subsistence benefits means losing access to help with mortgage interest. And so on.
Not logical
When your economic activity is that of caring, an additional characteristic is that income above a certain threshold causes a loss of entitlement to carer’s allowance, and with it carer’s premium – so that the subsistence amount the government thinks you need to live on actually goes down.
The treatment of Mr Casewell’s income from direct payments is consistent with the rest of the poverty trap, but that does not make it logical or fair. Not only does the poverty trap not allow for the remuneration of care, it does not incentivise care either.
At least I can afford chocolate muffins!
Allan Norman is Principal Social Worker & Solicitor at Celtic Knot, an independent law firm and social work practice.
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