Stung by the £500pw Benefit Cap, no rent being paid – Help!

I get very annoyed when benefit claimants work their figures out and think that all their benefits except their rent is untouched. Poppycock..... The benefit cap is an overall benefit cap, NOT a rent cap and I take great exception at people posting on such ill-informed nonsense.

I find it hard to accept that someone with four children and just one adult in their family cannot live on a TAX FREE income of £500 a week (£2150 per month or £25,880 per annum TAX FREE - equivalent to around £33,796 pa (see: http://www.thesalarycalculator.co.uk/lifestyle.php) before tax and NI - still well above the national average wage. Working people have to live on this so why not unemployed people? Of course they are going to have to make huge sacrifices and the 30% drop is clearly going to hurt, but there are going to be no commuting costs with a non-working adult and free school meals, free prescriptions and other benefits do help.

Yes, it means a meagre existence but benefits are not supposed to be for life, they are supposed to be a temporary measure to give people the chance to get themselves back on an even keel - where is the support from the father in all this and how much effort has been made to get him to cough up ?? I'm sure he knows the family get benefits so he doesn't feel the need to provide any assistance and thinks if he did, it would simply come off the benefits. And in my view therein lies the real problem. It's time worried Mum contacted "Benefits means I don't have to contribute Dad" and got him to contribute. Court action often works you know......

A huge swathe of working people living in this country have never brought home £747 TAX FREE, equivalent to £54,925 before stoppages (and without the additional free school meals, prescriptions etc), in their entire lives & I'm prepared to wager that the "working" partner (four children with a partner??. Hmmmm what ever happened to considering the children's security - I would have insisted on marriage before embarking not only on the next one, but three more?), never earned that much either. I'm afraid it's a case of becoming used to living on what you get. Wouldn't most hard working people like to get used to £747 a week even if it meant working six days a week? This is the reason the vast majority of people accept that the benefits cap is needed.

Many benefit claimants need to get their head around the fact they have had a good run but things are changing.

And to talk about adopting your children out for financial gain - well, don't get me started....

This post may be harsh but I feel it's important to put both sides to every argument.

Reply to the comment left by "r01 " at "23/08/2013 - 09:49":

Very well thought through, researched and presented argument.

I've liked your post.

I've also liked Mick's too. Even though it appears to conflict, I do think his point about phasing this in makes a lot of sense.
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Reply to the comment left by "Mark Alexander" at "23/08/2013 - 10:04":

Appreciated Mark, thanks. But I don't agree with the phasing in idea for these reasons:-

1 The benefit claimants have known this was coming for a considerable time, so they have had a phasing in period on full pay already. As have we landlords. Both sides have simply buried their heads in the sand. The responsible claimants have already embarked on their own phasing process by reducing their expenditure in advance of the cuts, I know of one that has chosen to quit smoking in the knowledge that it's either pay his rent or continue to smoke. He made the right choice and people like him should be applauded rather than reward those that have made no effort, and in particular those that attempt moral blackmail on society by saying they might have to adopt kids out if we don't keep throwing money at them.

2 It would not address the massive debt burden the current high levels of benefit is causing the country. The high cost of benefits is pushing up our national debt which in turn costs the current taxpayers more in stoppages to pay for and the longer it goes on the more tax will have to collected from those same people. Capping only new claimants would not address this fundamental problem.
It would also not encourage those people on benefit before phasing to seek work.

3 It would not address the fundamental unfairness that many people in full time but low paid employment can never hope to earn as much as some who are sitting on the benefit system. Why should the person currently on high benefit remain on it while the working person earning less continues to pay tax and NI to subsidise & support them indefinitely. Let's reverse this and ask how many benefit claimants would support the idea of giving some of their benefit to help top up the pay of the lower paid working families. That's effectively what tax payers are doing for benefit claimants but unfortunately it is never put to them in that way.

4 Just because someone has been overpaid in the past should give them no reason to expect it to continue indefinitely. Whatever date the benefit is reduced will never be acceptable to any benefit claimant any more than a cut in wages is ever acceptable to an employee. Unfortunately, since the financial crisis many employed people have had to accept just this and there is no reason why those that take from society shouldn't shoulder their share of the burden as well as those that contribute.

5 It would create a two-tier benefit system, giving new claimants a different amount to previous ones with all the attendant administration costs. This would be completely unfair on the new claimants whose families are just as large and who have identical problems/needs but may well have been contributing tax to the system until that point. Effectively punishing people who have worked by denying them equal benefit when they fall on hard times. That's unfair.

Of course I understand that landlords who let to these people want the cap removing or phasing as the tenants think the nasty, rich landlord should pay and not them, but that's what you get if you choose this marketplace and is the main reason I am not in this market. I think landlords should equally accept they've had a good run but things are changing whether they like it or not.

Reply to the comment left by "r01 " at "23/08/2013 - 22:34":

That’s the thing u see, ‘some’ benefit claimants have not known this is coming in. I know they should, but u would not believe how many of my tenants do not & have NEVER not watched the news. It’s laughable, some of ‘em are absolutely brain mashed.
If I took u round some of my tenants, you’d be banging your head against a wall, u come out thinking ‘she han’t understood a word I’ve said’-But they do know when Giro day is, very good at their calendar with that.
You wouldn’t employ some of ‘em to dig u a hole. Some are just totally unemployable, if there was a DLA benefit for being dozey, some would get it.
I tell one gal when she goes to benefits, just be your normal daft self & see if they can explain this to u-Because some don’t understand a thing-This probably started when they was 7 years old, ingrained in ‘em now, unfortunately.
You have to be there, see ‘em, deal with ‘em every day to understand. There’s always a percentage that are dizzy. Some lovely people, some not ha ha, but definitely dizzy & dozy & lazy & won’t do ‘ote to change the situation, no matter how hard u try.

Reply to the comment left by "Sarah Allterton" at "22/08/2013 - 17:54":
what a ridiculous person.

if she is to get £500 + free lunches, glasses, medical help and so on, then the £195 left after paying rent is more than enough to get by on -- IF all she expects from benefits is to pay for needs only and not wants as well.

Reply to the comment left by "Sarah Allterton" at "22/08/2013 - 17:54":

Re Worried Mum. This letter highlights the absurdity of the calculation. She says she gets £58 pw for rent. Total benefit £500 pw. There is nothing to stop her allocating from her other benefits towards her rent. £500 pw = £26000 pa. Gross equivalent £39000 approx.

Hardly breadline even in London.

She is currently receiving more than £38000 pa that is nearly £60000 pa equivalent salary for someone working. SO her problem is adjusting to her new means (the government could have arranged it better so it would not come as such an abrupt shock but redundancy has at least three times made it necessary for me to take a cut in pay of similar magnitude and believe it or not I survived).

This letter is either a winge at having to curtail her lifestyle, or she is prepared to give up her children rather than adjust her coat to fit the cloth. Neither of which generate any sympathy I am afraid.

Reply to the comment left by "r01 " at "23/08/2013 - 22:34":

Agreed, there are cases where LHA tenants get charged more than the private market and I sincerely hope these rogue landlords fall out of the basket as a result of these changes.

The problem is that people naturally fear loss more than they welcome a gain (sorry just reading Daniel Kahneman) so the government's approach has been poor psychology.

The other point is that working people do not get paid on the number of children they have so why should benefit recipients?

Reply to the comment left by "Mick Roberts" at "24/08/2013 - 08:34":

Mick,

You are clearly a decent and understanding landlord (maybe too understanding?), as well as a nice guy and we'd probably get on really well if we met. I think with some of the behaviour you tolerate you should be considered for a Knighthood instead of those people who merely win an Olympic race. I wouldn't swap my business model for yours for all the tea in China.

I have clearly polarised views but before anyone gets the idea I am some uncaring individual from a wealthy family that couldn't care less about the poor, I will tell you that I come from an original 1950's single parent family with thee children plus a half sister, adopted at birth due to poverty. I fully understand the plight some people find themselves in. It is the children I feel sorry for - they deserve more responsible parents!!!!. Despite my Mum's best efforts, I know how it feels to go hungry and remember vividly the home for malnourished children I ended up in. It is that memory that drives me to never suffer it again, nor will my children, even if it means working 20hrs a day, 7 days a week, 365 days a year.

Unfortunately, I believe that apart from irresponsible & feckless parents, modern politicians and party politics in particular are the major problem in all this and are the reason for our current broken condition. To get elected, they make stupid promises leading up to elections and add extra benefits just before an election to win votes instead of addressing the problems in society. It is accepted by all that corrupt politicians giving things away to get elected has been a major part of the cause of the collapse in Greece. I believe instead of giving more away we should take those on benefits and re-educate them as a condition of receiving benefits. I firmly believe no-one should receive benefits unless they are doing something for it and certain jobs like street cleaning could be reserved for the unemployed. We could never have streets that are too clean. Just look at how dirty they are right now with millions unemployed who are just being handed free money, so why not make them earn it, cleaning up the mess that often they create? I know you say you wouldn't employ some of them to dig a hole Mick, but if you told them unless they dug that hole properly Giro day wouldn't come, perhaps they would and maybe they could fill in the potholes too eh?? I would certainly be prepared to do so in return for benefits.

Perhaps instead of giving unmarried, single Mums who's "partners" fail to support them a house and benefits as a result of becoming pregnant, they should provide one supervised larger house for several single Mums (effectively a Hostel) with one or two staying at home to look after the children, cooking & cleaning for the others as their employment contribution while the remainder HAVE to work to pay for the entire costs, making it self-funding and if they want to get away from that situation they'd have to prove they are capable of holding down full-time paid employment at which stage they qualify for a home of their own. Of course they could always go back to their parents (or not leave to start with), instead. Yes, it would lose a huge brigade of single Mum votes but I suspect these two options would lead to Britain changing from having one of Europe's highest populations of single Mums to having one of the lowest in just one generation and the benefits bill might tumble dramatically. If only there were a politician brave enough to suggest this or something like it.....

If this sort of "tough love" were used for alcoholics,drug addicts, offenders and many of the other "brain mashed" groups you mention that currently languish on the benefits system, maybe, just maybe our entire society and future generations would benefit as well as the country's finances.

One thing is clear to me, creating a "benefits" underclass is certainly not working.

I repeat - I feel really sorry for the children, but I know from experience there is only one way to improve their lives - hard work. Education, good health, love and a work ethic are the best four things you can give to any child. Something many of the people you mention are singularly failing to give. Those poor kids - it's so sad for them and we are all failing them by allowing this to continue.

OK - sorry to all for such a long post, off my soap box now.......

With my landlord hat on, I wish the best of luck to you Mick, but if I were you I would be looking at improving my properties and considering a different market as I suspect unless you are prepared to get extremely firm with many of your tenants, your income will be dropping substantially as the cap takes effect. People tend to blame everyone else in society except themselves for their misfortune -especially the rich, greedy, landlord eh??. They will not care if they drive you bankrupt - trust me !!

Reply to the comment left by "r01 " at "25/08/2013 - 14:47":

I wouldn’t blame u for not swapping your business model for mine, I don’t think anyone would want the hassle I get.
Ooh, one day, give me nice houses, nice tenants, less working hours. Full time job mine.

I agree, get em doing some’at for their money, but I have maybe on average 1-2 a month that can’t even turn up for the ruddy appointment to see the job advisor, never mind before they even start getting to work. Because they miss 1 or 2 appointments, the lose the giro, £50pw ish., then HB stops, & quite often, they’re prepared to fully lose their giro for a few months all because they can’t be bothered to get on bus for 30mins to town for appointment.

I think I’ll have another 5 years of doing it my way (I’m a glutton for punishment-like the challenge, see if if can be done), then move upmarket as I decide to scale back a bit.
Some of my properties are mint mint, I have a saying ‘One tenant wrecks it, one makes it nice’. Does my missus’s head in, she says ‘Sell it while it’s nice’, but I can’t resist the challenge & before I know it, another year has passed, another years rent in, & then I think ‘Glad not sold that’.

I like Micks way of thinking

My rule of thumb

Normal Job - work 45yrs plodding along then retire maybe / maybe not well off
Normal Landlord / Investor - work a bit harder for 25 years then retire pretty well off
DSS Landlord/Investor - work very hard for 15 years then retire very well off

My normal job earn`t me a relative pittance but it was easy money. I turned up did my stuff in the allocated 8 hrs and then went home and watched TV. However hard I worked my pay packet was the same. I remember reading about oil rig workers who worked very hard long hours in tough conditions but earn`t an absolute shed load for getting stuck in and getting their hands dirty. I wanted to do the same but oil rigs didn`t do it for me. Property does

Ive been doing DSS for 14 years now. 16hrs days sometimes.
I`ll be done in 1 year according to my rule of thumb.
My plan is well on track. I actually cracked it in 10 but its fun so I carried on for a bit
So work out what type of investor you want to be
In short ......... If for you the ( benefit) cap fits..... wear it