An adequacy standard for benefits
abrdn Financial Fairness Trust
The working-age benefit safety net in the UK has fallen to alarmingly low levels, putting those depending on it at risk of severe deprivation. Correcting this is made more difficult by the lack of agreement on what minimum level of benefits are adequate, and the lack of any evidence-based benchmarks informing current benefit levels.
Objective benchmarks for adequate safety-net benefits are elusive: The evidence-based Minimum Income Standard (MIS) shows what the public thinks people need for a decent life, but not the level they think benefits should support. Expenditure benchmarks tell us about spending norms on different incomes, but not whether people lower down the income distribution are spending enough to meet their needs. Public opinion is moving towards the view that benefits have become too low. This may help endorse a better minimum benefit level, but on their own, fluctuations in public opinion would be a problematic basis for establishing benefit entitlements.
One approach could be to combine these strands of evidence in an “alarm bell” system that prevents benefits from breaching a very “minimalist” level on any one criterion.