When is a benefit not a benefit?

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‘Cutting the benefits bill’ is an answer often trotted out by politicians when asked how they are going to pay for something. They don’t often spell out precisely how they will do that – identifying who will go without food or shelter isn’t exactly the most certain way of winning electoral support. Far better just to leave people with the impression that it will affect someone else, not them, and that it’s a painless way of saving money. There is a question, though, of how we define what a benefit payment is. It’s obvious which side of the benefit/ not-benefit line some payments fall, but rather less obvious in other cases. Pensions are a case in point – whilst some see them as a benefit payment, others see them more as a contractual obligation in return for the NI contributions made over many years.

Yesterday, the Tories in the Senedd proposed a new payment for grandparents to look after their grandchildren. Superficially, it’s presented almost as though it’s a payment for work done. Whether it would be taxable or not is unclear, but added to the full state pension (and non-working grandparents able to do child care are quite likely to be pensioners), it would push most of the eligible pensioners into paying income tax unless it were to be exempted. If it is, in effect, a non-taxable payment for care provided, then that would surely make it a benefit payment (not dissimilar, perhaps, to Attendance Allowance) in the views of many – and a universal (paid regardless of other income or ‘need’) one at that. And even if it is not regarded as a ‘benefit payment’ to the grandparents concerned, if the objective is, as the Tories claim, to improve childcare provision for working parents, isn’t that simply a backdoor form of benefit payment to those parents?

I raise these points not because the idea is inherently a bad one. On the contrary, good affordable childcare is a problem and this is an interesting proposal for a fairly cheap extension, although there is a lot of detail not yet spelled out. And I’m not opposed to benefit payments either. The point is, though, that it is more than a little hypocritical for a party which has spent years bemoaning the fact that a millionaire can theoretically get a 35p packet of paracetamol for nothing to propose to give any millionaire who happens to be a grandparent a couple of grand a year for doing what they may well be doing for free currently. It’s difficult to avoid concluding that the benefit payments they’re against are those which go to people unlikely to vote for them (usually the poorest), whilst they support a new benefit which is likely to go to those more likely to vote for them.