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April 27, 2018 / C H Thompson

Universal verses Means-Tested Welfare

  • Why welfare benefits need to be means tested:
  • This approach is favoured by the New Right and promotes individual responsibility known as self-help
  • as a concept self-help differentiates between the deserving and undeserving poor
  • Such an method means peoples’ incomes and savings must be low enough to ‘deserve’ to qualify for welfare
  • By examining individual incomes and savings money is saved from paying benefits to people who are too lazy to work
  • This frees up tax-payers money for hospitals and schools and those people in genuine need
  • It also stops the work-shy from seeing welfare as an occupation, eliminating the dependency culture

Why welfare benefits need to be universal:

  • This approach is favoured by Social Democrats and promotes collective responsibility via the state taking care of people by redistributing taxation
  • Universal benefits are there for everyone, like state pensions, healthcare and education
  • Means-tested benefits for only the very poor, can lead to those in work being in poverty because they’re not earning enough
  • the above is known as the poverty trap, something universal benefits will avoid
  • poverty trap can lead to people avoiding work, creating a dependency culture so as to avoid becoming poor
  • stigma of means-tested benefits can lead to people not claiming what they need
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