Tackling the abuse of benefits

It is generally accepted that one of the causes of poverty in this country is the tendency of some people to spend money on alcohol and cigarettes and lottery tickets in preference to food and clothes and so on.  It is hard to ascertain to what extent this is happening, but I will accept that the situation exists and that something ought to be done.

As an aside, I am aware that poverty is increasingly affecting working families.

One solution that has been urged is to make benefits available in a form which precludes the purchase of certain things, and I quote here from a comment in The Daily Mail:

Meanwhile, Left-leaning think-tank Demos ... advocated that prepaid cards, rather like debit cards, should be given to claimants for some benefits.

Such a system would involve cards being loaded with money whenever a benefit payment is due. They would work by being pre-programmed so claimants can only buy essential goods — and withdraw just a small amount of cash.

Demos ... said that such cards might ‘remove temptation’ from people to waste welfare money, and would also help them with savings and budgeting.

My first comment - I will start with a positive - is that such a scheme could be helpful to people who do not have a bank account.  I remember many years ago reading about a man who cashed in a benefit cheque at his local post office, and then was mugged while walking home.  He lost all of his money.  If his benefits had taken the form of a payment card, with little option for obtaining cash, then he would presumably have been in a stronger position.

My second comment is that many people who are on benefits are sensible with their money.  Should they be required to take their benefits in the form of a payment card if they are already capable of making sensible spending choices?

My third comment is that one of the causes of poverty in this country is the high price of gas and electricity for people with prepayment meters.  Generally speaking, the lowest prices for gas and electricity are enjoyed by people who have credit meters and pay by direct debit.  Presumably someone whose benefits take the form of a payment card would not be able to pay any of their bills by direct debit.

The idea of payment cards is worthy of consideration, but perhaps such cards should be given only to those benefits claimants who either want them or who have shown themselves to be incapable of making sensible choices with their money.

For those who are interested, here is an example of what one family on benefits spends money on.

Related previous posts include:
Stop being nasty to those less fortunate
Gambling ruins lives
On benefits and in debt