Means Testing is Mean
Have you ever noticed that means testing is almost always only carried out on those down on their luck? The sick, the disabled, the out of work, the elderly?
I get it that we don’t like the idea of our taxes going to people who don’t need it, I really do. But we give far more money to rich people and corporations that don’t need it in subsidies and tax cuts, and don’t means test them. And wouldn’t it be far cheaper and simpler to recover any unneeded payments through the income tax system rather than have separate means testing, particularly when means testing can mean delays getting money to the people who need it most? Or even failing altogether, with tragic results?
One exception is inheritance tax in the UK or estate tax in the United States (there is confusion between the two terms), which the rich want done away with, so politicians working for the rich try to frighten people into thinking they will be affected by it, even though they are not nearly wealthy enough.
UK
Benefits that are means tested in the UK include:
- Council Tax Reduction
- Housing Benefit
- Income-based Jobseeker’s Allowance [JSA]
- Income-related Employment and Support Allowance [ESA]
- Income Support
- Pension Credit
- Social Fund: Cold Weather Payment, Funeral Payment, Sure Start Maternity Grant, Winter Fuel Payments
- Tax Credits, Child Tax Credit, Working Tax Credit
- Universal Credit
- Legal aid
- Carer’s allowance (you mustn’t earn more than £151 a week after deductions)
And even if families pass the means test, the UK government has other ways to restrict their benefits and keep them in abject poverty, with a two-child benefit limit and a benefit cap.
And the new UK Labour government has announced that it is going to means test the Winter Fuel Payment for pensioners, so it is not just the conservatives who are mean. Last year 5,000 pensioners died. How many will die this coming winter?
In the UK, people staying home to care for loved ones get carer’s allowance if they earn less than £151 a week. If they go over that, they become ineligible. The Department for Work and Pensions (DWP) does not notify them when they go over, even by a little, and is now claiming £251m back. How mean is that? In contrast, the Tories did not recover any of the billions due to PPE fraud.
UK pensions
In April 2024, (then shadow) chancellor Rachel Reeves announced that Sir Edward Troup was part of her advisory team on tax avoidance. He had been Executive Chair and First Permanent Secretary of the HM Revenue and Customs (HMRC) under Tories. He has said that “tax avoidance is not a moral issue” and has called tax itself “legalised extortion”. Hardly a promising background for a Labour advisor. Recently he said that ‘If pensioners have got the means, they should be contributing at least as much and possibly more than those people who are working.’ and that that pensions may need to be ‘means tested’.
While the State Pension is usually below the personal tax allowance, so no tax is due, it does form part of your taxable income so can be taxed if you have other income. So in a sense, it is already means tested. The amount of state pension depends on the amount of National Insurance you have paid in or been credited with, so it has been earned, and people can plan their retirement accordingly (unless the government changes the system as Tories did in 2016, leaving my generation getting less than people who reached retirement age after us, with insufficient warning for us to plan) (Waspi’s). To means test it is to break a contract with the people. It is also the start of a slippery slope downhill.
Most people have been contributing to state pensions all their life, with an expectation that they would get a pension at the end of it, and planning accordingly. To reduce their pensions in any way is unfair.
USA
Means-tested programs in the US include:
- Medicaid
- Children’s Health Insurance Program [CHIP]
- Affordable Care Act [ACA, Obamacare]
- Supplemental Nutrition Assistance Program (SNAP)
- Supplemental Security Income [SSI]
- Earned Income Tax Credit [EITC]
- Child Tax Credit [CTC]
- Temporary Assistance for Needy Families [TANF]
- Veterans Pension [pensions for low-income veterans]
- portions of the Pell grant program (for students)
In the US, Medicaid is means-tested (coming to the UK next time we have a conservative government?). But even eligibility for that is determined by the States, thanks to the Supreme Court.
Republicans were opposed to Obamacare from the start, even though it is based on a program promoted by one of their own, Mitt Romney.
The Heritage Foundation’s blueprint for the next Republican Presidency, Project 2025, which was written by many Trump people even though he denies knowing anything about it (yeah, right), includes draconian cuts to Medicaid, with increasing eligibility determinations to make it harder to enroll in, apply for, and renew Medicaid. It would also cut funding to the Department of Veterans Affairs (VA).
Tax money going to those who do not need it
According to the IMF, “Globally, fossil fuel subsidies were $7 trillion or 7.1 percent of GDP in 2022”. Yet the big oil companies made £223bn profits so we are clearly subsidising them more than they need. And if they need subsidies, do we need them? Their climate change is costing us dearly, yet they are suing governments when climate policies threaten profits and scaling back their climate goals. Why aren’t they means tested?
Boris Johnson was given taxpayer-funded legal advice for the Partygate inquiry which looked into whether he misled Parliament over the scandal, while legal aid for ordinary people is means-tested.
Some politicians seem to think that if you are doing a job because you care about it — for example nurses and doctors — you should not expect to be paid well too. High pay should be reserved for the selfish and greedy, it seems. They don’t understand passion, or that it doesn’t pay the bills. They think everyone should buy into their market forces ideology. MPs expect to get a full salary even when they are independently wealthy or getting large sums from moonlighting — something that would get many of us the sack. And they don’t get docked pay or sacked when they fail to turn up for votes without good reason. They also leave their jobs with better prospects for future earnings than most, though they don’t get the generous pensions that some have claimed. Members of the House of Lords, on the other hand, are only paid if they turn up.
Means testing is harmful, costly and unfair
By being kept poor, those who are able to work, at least a little, may not be able to afford the things they need to get and keep a job — be it a car for commuting if there is no public transport, a smart phone, a computer and the internet, a smart suit. They are also likelier to be in poorer health, due to being unable to afford healthy food and having to live in unhealthy housing. This is class warfare. And inequality is bad for the whole of society.
The poor have to jump through hoops just to get their pittance, whereas highly-paid CEOs and investors get massive bonuses even when their companies don’t do their jobs, as showcased by the water industry in the UK, which has paid out massive amounts to CEOs and shareholders while releasing a lot of the sewage they were supposed to clean up into our rivers and coasts (far more than is reasonable after extreme rain), and failed to maintain their infrastructure. They now expect us to pay them a second time to do their job.
Means testing benefit by benefit is expensive and inefficient. Most could be amalgamated under the income tax system. Most benefits could be replaced by Universal Basic Income (UBI), with any going to the relatively rich being recouped via income tax. This would allow the sick and disabled to focus on their health, for family and friends to be able to afford to be carers (saving the state a lot of money). It may go against the grain to pay the lazy, but when I worked in Social Security there seemed to be very few, and some of them worked very hard at cheating the system anyway. And do you want someone very lazy preparing your food, servicing your care, or working for you? The right wing frequently tout freedom — UBI would give people greater freedom.
If your factory closed and you had no prospect of a job, wouldn’t you like to know you had a steady, if modest, income while you retrained or started your own business? Would the government want a sudden unexpected increase in claims for unemployment benefits?
But most of all, means testing is demoralising, particularly as there are many mistakes made assessing it, so it does great harm to society.
Perhaps we should introduce meanness testing.