Getting to the crux of welfare dependence

Quick cut and paste of, for me anyway, quite exciting analysis.

New Insights

Age of Entry and Intergenerational Benefit Receipt

·         75% of the liability is attributable to clients that first entered benefits under the age of 20. A key finding of this valuation is the extent to which early entry is co-related with intergenerational benefit receipt.

·         For Youth benefit clients as at 30 June 2014:

§  88% (9 in 10) were from beneficiary families, the majority of whom received a main benefit for most of their teen years. 

§  51% were in beneficiary families for 80% or more of their teen years.

·         The correlation is striking enough to believe that early entry may be a proxy for intergenerational benefit receipt (with the notable exception of teen-aged SLP entrants).

·         The evaluation looked specifically at the share of beneficiaries up to age 25 that can be matched to a record of parental benefit receipt - a “benefit match”. We also looked at the extent of their family’s exposure to benefits, during each matched beneficiary’s teenage years (13-18).

·         These figures show that inter-generational correlations are very strong – most young clients in the benefit system had some exposure to the benefit system through a parent or guardian.

·         Nearly three quarters (74%) of all beneficiaries up to age 25 had a parent on benefit while they were a child, and just over a third (35%) had a parent on benefit throughout their teenage years.

·         The greater the family benefit history the longer the client tended to stay on a benefit, particularly for the Jobseeker benefit.

·         For instance, a client whose parent was intensively in the system during ages 13-18 was then 48% more likely to remain on JS-WR after a year compared to those clients matched to a non-beneficiary parent. Their exits were also less sustainable; on leaving the system, they were 11% more likely to be back on benefits within two years.

To summarise, three quarters of the forward cost of welfare rests with those who go on welfare under twenty. The inter-generational  "notable exception" of supported living payment beneficiaries (SLP) is due to intellectual and other disability affecting young people transitioning into adulthood .

This emphatically highlights the last Labour government's folly of concentrating all their efforts on the unemployment benefit (albeit successfully reducing numbers).