The morality of refusing work to continue claiming social welfare

shoegirl

Evading tax due to poverty defended by priest


A CASE can be made for tax evasion where the only alternative for a person trapped in poverty is to refuse a job out of fear of losing his or her social welfare benefits, a priest has said.

Father Seamus Murphy, a lecturer in moral philosophy at Milltown Institute of Theology and Philosophy, makes the comment in the current edition of the religious monthly, Doctrine and Life.

Commenting on the recent spate of business scandals, Father Murphy, a Jesuit, condemns tax evasion for "undermining good government and robbing society".

However, he writes: "In particular instances, a case could be made for the moral acceptability of tax evasion (or its equivalent) by persons from lower income groups caught in poverty traps, where coming off the unemployment register and taking a job leads to financial loss."

He told the Irish Independent that although tax evasion is wrong as a general rule and ought to be severely punished, "there are actually few moral absolutes and therefore I don't want to say that always and everywhere and under all circumstances tax evasion is wrong.

"One case where it might not be wrong is where the alternative is to remain in a poverty trap. In fact, the Government has a moral duty to eliminate poverty traps."

However, he stressed that under almost all other circumstances, tax evasion is wrong and that it was certainly so where a person held an Ansbacher or other bogus non-resident account.

In his article, Father Murphy argues that the widespread belief that morality is a matter of personal opinion has helped to erode ethics in the business world and in society in general. In turn, he says, this has created the conditions for widespread tax evasion.

He writes: "It is particularly noticeable that a number of lecturers in technological institutes are concerned that their students, competent in technological and commercial disciplines, are seriously underdeveloped in the humanities and normative disciplines" which guide behaviour.

He adds: "Unless these conditions are changed, they can't become virtuous or ethical in business, since they won't understand what this means or how it could be of genuine value."

Father Murphy says that many students take the law more seriously than morality because "the law has teeth" and that this attitude can harm the common good, which needs a shared morality to uphold it.

He also writes that business ethics makes no sense unless business people know that they have a duty to the common good.

David Quinn
Religious Affairs Correspondent

shoegirl

I thought this comment by a theologian was quite irresponsible as it suggests that it is ok to perpetually remain on social welfare as a taker rather than join the workforce as a contributor. There is certainly a truth in the point (particularly for single parents) that the cululative net benefit of social welfare is now so high in some cases that the recipient would need to be earning as much as 35k a year in order to maintain the same standard of living.

However what I object to in this article is the suggestion that somebody who is going to be better off on welfare than working is living in "poverty." Nobody who is getting benefits valued more than 200 a week (as a typical single person living on the dole getting 70 euro a week rent allowance would be) is "living in poverty." And since the dole is deisgned for people who are "seeking work" and not those who want to drop out of taking responsibility for themselves, it is dangerous to suggest that there is a moral justification for refusing work.

To make matters worse, it could also be argued under this view of morality that working on the black economy to lift yourself out of poverty is morally right - it is not. The big problem at the moment is that social welfare is no longer paying rates that leave its recipients in poverty. For the last 2 years the culumative increase in social welfare has been 13.5% whilst wages increased by 8.5%. This is increasingly creating a situation where somebody on welfare is likely to be better off not working - but this can only be rectified by reducing social welfare rates or cutting secondary benefits. (And look at the outrage caused by the "savage sixteen" even though some of the benefits, such as the MABS allowance, was given to very few people in limited circumstances). The only other suggestion I would make is to hike up the minimum wage above the level of social welfare and make work benefits like sick pay compulsory. This would hardly be accepted by industry. So in the meantime the only other solution would be a workfare programme. This has been practiced widely in the US and has not always been fair.

On the other hand the New Deal in the UK has forced a lot of welfare recipients off welfare with more success, except perhaps for disabled people, who are more restricted in their work options, and likely to be discriminated against. The biggest danger of all however, is that endorsements like Fr Murphy's would appear to endorse what at the end of the day amounts to welfare fraud. This is hardly something a guardian of morality should be defending!

Merrion

I have recently read an article arguing a contrary point of view that all tax evasion is essentially treason but can't find the link now.....searches....

RicardoSmith

How the heck can you get the equivalent of 35k on the social?

Our man in Havana

RicardoSmith wrote:

How the heck can you get the equivalent of 35k on the social?

Its the value of all the extras, such as fuel allowance, childcare, free house etc not paid in cash to the user. 35K would be the notional value of these if you had to earn it.

RicardoSmith

Bond-007 wrote:

Its the value of all the extras, such as fuel allowance, childcare, free house etc not paid in cash to the user. 35K would be the notional value of these if you had to earn it.

I guess when you add it all up.

Victor

Bond-007 wrote:

free house

Where do I sign up for my free house? :rolleyes:

shoegirl wrote:

The biggest danger of all however, is that endorsements like Fr Murphy's would appear to endorse what at the end of the day amounts to welfare fraud.

He's not endorsing, he is saying it's on the lower end of the scale. California had a 3-strikes law where if you were convicted of 3 serious crimes, the minimum sentence was 50 years. In one case (it ended in the Supreme Court and the law was struck out), those 3 serious crimes were two counts of shoplifting and one of drunk and disorderly. Meanwhile, Kenneth Lay is still a free man.

sixtysix

the average rent allowance to a single parent in dublin is about €10200 per annum add the lone parent allowance assuming one child of €8000 pa and you see the dilemma involved in accepting work.

EKRIUQ

sixtysix wrote:

the average rent allowance to a single parent in dublin is about €10200 per annum .

:mad: My mortgage isn't even that :mad:

sixtysix

thats why buy to let is so popular-local authorities are buliding very few houses these days.

The Corinthian

RicardoSmith wrote:

How the heck can you get the equivalent of 35k on the social?

Last time I was on the Dole (the mid-1990’s) I vaguely worked out that between the Dole itself, rent allowance, medical card and everything else I was on the equivalent of about £12,000 p.a. gross, which oddly enough, was the average starting salary for many graduate jobs at that time.

So I do see the fiscal logic, however the morality is another matter. Judging that you will be financially better off in one case over another is utilitarian rather than moral as it does not consider the social obligations that are fundamental to morality, only self-interest.

As such I find Father Murphy’s reasoning to be somewhat questionable. Then again, it’s not like the Milltown Institute of Theology and Philosophy is a real college :rolleyes:

Victor

sixtysix wrote:

the average rent allowance to a single parent in dublin is about €10200 per annum add the lone parent allowance assuming one child of €8000 pa and you see the dilemma involved in accepting work.

Don't you mean the maximum rent allowance? Any source for your figure?

And to be honest rent allowance all goes to landlords in this inflated market. Corporate welfare for the middle classes.

Dyr

wow i must tell my sis that raising three kids alone is making her a top earner, why on earth would she be looking for crappy part time jobs as well?
:rolleyes:

sixtysix

i do mean the maximum rent alowance-landlords being savvy people are obviously aware of the max payable-i wholeheartedly agee with you though that it is welfare for landlords, the lone parent is still left with only €8000 per annum out of which her contribution to the rent is approx €700

RicardoSmith

sixtysix wrote:

i do mean the maximum rent alowance-landlords being savvy people are obviously aware of the max payable-i wholeheartedly agee with you though that it is welfare for landlords, the lone parent is still left with only €8000 per annum out of which her contribution to the rent is approx €700

That puts a different spin on it doesn't it.

shoegirl

The problem seems to be that the cumulative cash value of secondary benefits are not taken into account when assessing social welfare rates.
Therefore large increases in cash payments (such as basic adult rates and dependent rate) can result in "social welfare inflation" where the cumulative amount (with its equivalent cash value) actually begins to exceed the cumulative earnings of a worker on a low to medium income.

Also some payments have spiralled out of control - for example Rent Allowance - its particularly interesting to note that from 2001 to 2002 5000 additional persons a year are receved this secondary benefit - yet there was not a matching soaring in the number of people on social welfare. Likewise the number of people receiving rent allowance has soared over the last ten years at a time when the net number of people receiving social welfare has fallen by almost 50%. Yet no study has been done to question why the numbers on this benefit have soared at a time when overall welfare rates are dropping.

Another issue that is rarely discussed is Medical inflation. I remember not so long ago that a doctors visit was about £10. Now it is 40 or even 45 euros. Can somebody please explain to me why GPs need to earn 2.5x the figure they earned 10 years ago? (At a time when their actual incomes would be rising due to lower numbers of medical card holders). And also why the government have almost doubled the GMS scheme rates? Granted the scheme is expensive but the cost of medication have not doubled.

Here are some examples:

Single person, housing assocation tenant receiving Disability Allowance
Rent is €9 per week including charges (net value is €100 as this is the maximum figure the housing association would charge if the person were to take up well paid full time work)
Single benefit = €134 per week
Medical Card = cash value would be €30 per week to cover mediction for antidepressants and painkillers (typical for back injuries and leg/knee and hip problems), visits to specialists and regular GP vists (this is probably very conservative)
Free Travel (cash value is €20 per week)

Actual net cash value of benefit = €275 per week
Equivalent salary required to get same amount for working person = €15,500 (or €8 per hour working a 37.5 hour week)

Here's another one:

Single person, on Unemployment Benefit, in private Rented accomodation in Dublin
Single benefit = €134 per week
Medical card = €5 per week as person is very healthy
Rent Allowance = €100 per week

Actual net cash value = €239 per week
Equivalent salary required to get same amount for working person = €12,750(or €7 per hour working a 35 hour week)

Note that the person above is actually as well off as somebody on the minimum wage!

Now lets look at another case:

Single parent, one child, living in rural area
Single benefit = 134
Dependent benefit = 19.30
Rent Supplement = 100
Medical card net value = 10 pw
Childrens Allowance = 30 pw approx
Allowed figure for part time work = 146.50

Actual cash value = €439.8
Equivalent replacement income required (taking into account childrens allowance as not means tested) = about €25,000 per annum or about €13 per hour

Finally, lets take an entire family:

2 parents and two children, both unemployed
Main payment = 134
dependent = 90
2 children = 33
Rent supplement = 100
Childrens Allowance = 61

Actual income = €418
Net income required to replace income = €22,800

Now if the family have more than 3 children this would greatly increase the income requirements for a full time job (although the impact is not as dramatic as the lone parent)

Lastly consider other available benefits:

Back to Education Allowances
Fuel Allowance
Christmas Bonus
Medical card (household income limit does not apply)
Diet Supplement
Back to School Clothing and Footwear Allowance
Rent/Mortgage Interest Supplement
Telephone allowance
There is also allowances for children with learning disabilities (some of which are still hotly contested as to whether they are in fact genuine medical disorders or simply learned behavioural problems, such as ADHD)
Family Income Supplement
Part-Time Job Incentive Scheme
Not to mention free travel for disabled people (some of whom seem to be in fact suffering from depression)

Seems to me that the current system is wide open to exploitation

Victor

For someone who has expressed past financial difficulties (if I have it right), you seem to be a little "unkind".

shoegirl wrote:

Also some payments have spiralled out of control - for example Rent Allowance - its particularly interesting to note that from 2001 to 2002 5000 additional persons a year are receved this secondary benefit - yet there was not a matching soaring in the number of people on social welfare.

5000 is hardly "soaring" is it? It's not like rent allowance puts you up in a designer, 4-bed apartment overlooking Grand Canal Dock on your own, is it?

Likewise the number of people receiving rent allowance has soared over the last ten years

Rents have what doubled? Tripled? Council housing has been minimal. Household sizes are getting smaller in a growing population. This would suggest there might be more people finding it difficult to pay the rent.

at a time when the net number of people receiving social welfare has fallen by almost 50%.

Really, most of the people receiving social welfare are parents receiving child benefits and pensioners. What are you basing your 50% drop on?

Yet no study has been done to question why the numbers on this benefit have soared at a time when overall welfare rates are dropping.

Are you sure? You make a lot of assertions without presenting any solid figures.

Perhaps your indignation might be better directed at rich pensioners who have health cards but can well afford to do without them and similar cases.

sixtysix

i cannot see the logic of including child benefit in your figures-child benefit is payable whether in employment or not, it spoils an otherwise interesting viewpoint.

samo

sixtysix wrote:

i cannot see the logic of including child benefit in your figures-child benefit is payable whether in employment or not, it spoils an otherwise interesting viewpoint.

have been following this thread too and would agree with this, child benefit is not means tested its available for everyone and its up to each family to claim it. It isnt a benefit as such

Sleepy

Single parent, one child, living in rural area
Single benefit = 134
Dependent benefit = 19.30
Rent Supplement = 100
Medical card net value = 10 pw
Childrens Allowance = 30 pw approx
Allowed figure for part time work = 146.50

Actual cash value = €439.8
Equivalent replacement income required (taking into account childrens allowance as not means tested) = about €25,000 per annum or about €13 per hour

So my taxes essentially pay people more than my net salary to have kids? No wonder this country is going to hell in a handcart. :rolleyes:

shoegirl

Victor wrote:

For someone who has expressed past financial difficulties (if I have it right), you seem to be a little "unkind".5000 is hardly "soaring" is it? It's not like rent allowance puts you up in a designer, 4-bed apartment overlooking Grand Canal Dock on your own, is it? Rents have what doubled? Tripled? Council housing has been minimal. Household sizes are getting smaller in a growing population. This would suggest there might be more people finding it difficult to pay the rent.Really, most of the people receiving social welfare are parents receiving child benefits and pensioners. What are you basing your 50% drop on?Are you sure? You make a lot of assertions without presenting any solid figures.

Victor when I was in financial difficulties I was working, my total debt expenditure left me 75 euros a week after everything was paid for. Strangely enough I managed to survive on this figure for the year or so it took to wipe the slate clean. I resent the insinuation that I am being "mean." I know exactly what it is to live in real poverty, not to be able to pay for even a proper meal. My point is that debates on poverty are based only on cash payments and do not take the full picture into account.

My figures are based on the drop in unemployment rates between 1992 and 2002 according to the CSO. In 2004 this stands at 93000 (according to Household survey). In 2000 the number unemployed was around 157,000. However in 1994 the figure stood at a very shameful 300,000. This is stats from CSO by the way. Also, taking into account that the population increased from 3.6million to 3.9 between the 1996 census and the most recent one, this means that the net unemployment rate has fallen by well more than 50%, and there are less actual claimants.

Now unfortunately there are no stats for income support type claims, so I cannot tell you if 200,000 people have simply moved from unemployment benefit to sickness/disability/lone parent or other income supports. However according to the same censuses there have been large increases in the number of working people so even taking account for higher levels of workplace participation for women and the over 65s there is still a large fall in the numbers of people whose sole income is social welfare as far as the state is concerned.

As for net figures in receiving Rent Supplment - this is taken from documents from Cohmhairle and the recent Rent Supplement report: officially the increase is 28,000 in 1993 to 60,000 by the end of 2003. My figure of 5000 per year increase is coldly accurate - in 1999 there were 41,000 people receiving it - within four years this was 60,000 - or about 5k extra per year for every year between 1999 and 2003. In fact this conincidences with the largest net drops in unemployment rates (except for a few small increases).

Rent Supplement Recipients:

1993 28,000
1999 41,000
2001 45,000 (from Comhairle research at http://www.comhairle.ie/social/social_research_rentsupplements.html)
2003 60,000

(Except for 2001 figures, all figures taken from Report of the Social Partners’ Group on Rent Supplement, August 2004, see http://www.welfare.ie/publications/spg_rent_sup04.html)

Now anecdotally, rents were still expensive in the period 1988 to 1993, as far as I recall a bedsit in Rathmines was around 40 pounds a week around 1990, when the average wage was 10k. When I was living in the same area around 1999-2001, the rent for a bedsit was about 70-80 pounds, while the average income was growing from 18k to 21k (again see CSO stats). So proportionately rents were never cheap. The largest group on rent supplement is single people (a married person cannot get any SWA payment if their partner works for more than 30 hours per week). 20% are lone parents - which is understandable considering the vicious circle I have previously pointed out with regard to single parents and the disincentive to work. But social housing was neglected as early as the mid 1980s, yet is was not accompanied by a massive rise in private rented sector living. Why was this something that only happened in the mid to late 1990s?

As I said further back, this is never discussed in debates on hosuing, poverty etc. There is far greater risk of poverty for those working for their income on less than 18k a year than there is for those I have described in previous posts.

sixtysix

surely the reason why rent allowance claimants increased is because the government does not build enough local authority housing. the current waiting list for local authority housing is in excess of 40,000 while local authorities intend building 5000 new units in this financial year. this shortfall creates demand for private rented accomadation.

Victor

shoegirl wrote:

I resent the insinuation that I am being "mean."

I specificly used the word "unkind".

shoegirl wrote:

But social housing was neglected as early as the mid 1980s, yet is was not accompanied by a massive rise in private rented sector living. Why was this something that only happened in the mid to late 1990s?

Demographics. The population grew strongly in the period around 1970 and those poeple moved out of home in the 1990s. Seven people comprising two adults and 5 children would fit in a typical 3-bedroom house. 7 adults don't.

From the CSOs statisticalyearbook2004.pdf

Number and size of households

The number of private households has more than doubled since the 1926
Census, when there were 622,700 private households in the State. By 1991
the number had increased to 1,029,100 and in 2002 there were 1,288,000
private households. There were, on average, 4.48 persons per household in
1926. By 1991, average household size had fallen to 3.34 and the latest figure, for 2002, is 2.94 persons.

Table 17.1 shows

shoegirl

Victor wrote:

Demographics. The population grew strongly in the period around 1970 and those poeple moved out of home in the 1990s. Seven people comprising two adults and 5 children would fit in a typical 3-bedroom house. 7 adults don't.

Totally agreed but the very interesting reporting on the effects of the restrictions on rent supplements from 2003, do study the kinds of accomodation that people are living in and it does suggest that rent supplements are largely the confine of smaller household units - naturally this would be the case as those with large families are further up the housing list and more likely to be housed. In fact a huge number of SWA recipients are single person households (presumably living in one bedroom units or bedsits). Now just slightly up the food chain you generally find that working tenants earning 14k to about 25k (the minimum wage to 90% of average industrial wage earners) will mostly share accomodation - in fact many see living alone as a luxury that they cannot afford. In fact in the UK, the Benefits Agency will not pay the full rental for a single unit for a single person living alone if they are under 25. They will pay the average market rate for a single person in a shared unit. (Incidentally, the Housing Benefit system is moving to a situation where all recipients are paid a flat rate based on the market rate, which would enable those paying lower rents to keep the difference between what they receive and what they have to pay - conversely those on higher rents would have to fund it out of their benefits - which by the way are now only half what they would get in Ireland).

This still doesn't go to answer the reason why there was such a large rise in the net number of people receiving the benefit. If you look at the study on the restrictions, it indicates that the numbers sky rocketed between 1999 and 2001. However if your arugment that demographics were the cause was correct, that jump would have been entirely in the under 25 age group. Its not. The largest groups of SWA housing assistance recipients is the 25-45 age group. In fact, a different report on ERSI on whether or not the problem with housing in Ireland is the cost of houses, investigates if the real problem is rental property - in a demographic scenario, the vast majority of the increases would definitely be younger people. But they are not.

somebody also suggested that the cost of rents was a driving factor in the number of rent subsidises tenants. This is not the case as the sole eligibility for rent supplements is that you have no income other than social welfare. So the rising cost of renting cannot have any effect on increases in the numbers claiming subsidies, as they do not become eligible on the grounds of rent increases, only on the grounds of income type.

Victor

So what is your hypothesis then?

shoegirl wrote:

In fact, a different report on ERSI on whether or not the problem with housing in Ireland is the cost of houses, investigates if the real problem is rental property

The problem is not means of supply, but total supply against demand (both as the dominant discourse* and in basic needs).


* You must have job, partner, house, car, 2.3 children ....

Capt'n Midnight

shoegirl wrote:

... Father Murphy, a Jesuit, condemns tax evasion for "undermining good government and robbing society".

However, he writes: "In particular instances, a case could be made for the moral acceptability of tax evasion (or its equivalent) by persons from lower income groups caught in poverty traps, where coming off the unemployment register and taking a job leads to financial loss."

He told the Irish Independent that although tax evasion is wrong as a general rule and ought to be severely punished, "there are actually few moral absolutes and therefore I don't want to say that always and everywhere and under all circumstances tax evasion is wrong.

"One case where it might not be wrong is where the alternative is to remain in a poverty trap. In fact, the Government has a moral duty to eliminate poverty traps."

However, he stressed that under almost all other circumstances, tax evasion is wrong and that it was certainly so where a person held an Ansbacher or other bogus non-resident account.
...
Father Murphy says that many students take the law more seriously than morality because "the law has teeth"

I can't really argue with that.
Note the words In particular instances, could , poverty trap - not simply a blanket OK if you are getting more on social welfare.

Many well off people & companies spend a lot of time and effort in tax avoidance. Then there are not a few who on to tax evasion, and that's the ones we know about, there are obviously a LOT more since no one would do it if there was anything close to a 100% detection rate.

Kinda nice the way the article was turned arround from focusing on the lack of morality amongst the business community to focus on a highly conditional acknowledgement that some people below the poverty line would be significantly worse off taking a dead end job offered by the business community (who no doubt would get some sort of training grant or tax emption for their troubles)

I drag up this again Microsoft have in the past broken many laws, and then gone to court and paid the fine. Before penalty points people treated the £50 speeding ticket as a tax rather than a measure to protect the wellbeing of other road users. Many businesses and individuals seem to think that if you multiply the porbability of being fined by the likley fine and it's afforadable then it's ok to break the law. In fact where breaking the law confers a business advantage then for a large subset of businesses this seems to far outweigh any moral consequences.

This unfortunatly also applies to health and safety as well as money - look at the numbers of workers killed and injured every year by companies who have broken regulations. Look at the cases of food poisining and the scares from the food industry. It's not just tax evasion where poor business morality affect us.

But hey lets blame those who need the money rather than those who are already well off. I reckon a few of the worst offenders in this country could easily pay for the cost of all those who are morally justified in not accepting a drop in income. (most people on the dole are not morally justified in refusing a job that with fair and safe working conditions) In case there is any confusion, those who use the dole to "drop out of the rat race" are parasites who put more pressure on those still in it to pay for their lifestyle.

nlgbbbblth

shoegirl

lower case letters
suggests a hard-working female, mid 30s, socialist beliefs, unimpressed by wealth and expensive clothes. defiant.

Victor

nlgbbbblth: Commenting on internet grammar suggests a anal moron with too much time on his hands.

I don't know if that applies to you, but I do raise the question.

shoegirl

nlgbbbblth wrote:

shoegirl

lower case letters
suggests a hard-working female, mid 30s, socialist beliefs, unimpressed by wealth and expensive clothes. defiant.

bizarrely accurate!
well except you made me slightly older.

I don't know if I'd describe myself as socialist. Its a broad term.

What I think is worrying is the lack of focus on particular needs whilst engaging in generalised increases. Now this itself is going to harm the mini-welfare state in the medium to long term as already a large number of people will be perceived to be better off on welfare than work. If that is the case then any pressure to work becomes "welfare to work" the original (and quite rightful) criticism of the CES scheme. Now unless real wages are higher than social welfare then work cannot replace welfare.

Now its not unreasonable to expect people to earn their living. Social welfare is a relatively recent and good thing. It has come into disrepute only because of evidence that a number of recipients have abused the privelige. If you were unfortunate enough to have no means, historically poor laws were extremely harsh. However nowadays (except in the US and to a lesser extent the UK) there is very little workfare. However even in Germany there is a growing realisation that generous welfare rates are not sustainable in lean times. We saw this in Ireland in the 1980s (though the rates were not generous, even then) especially when dramatic cuts were made. The danger I see is that mentalities that justify people remaining on the dependency of the state rather than to accept low wages will risk a situation occuring where welfare is brought into disrepute.

The sad thing is this has already happened in the UK. Remember it was Labour who cut rates to shreds in 1997. The social welfare rates for an adult single person with no dependents is less than 10% of the average earner. In Ireland the same rate is about 25%. Any indication that refusing to work is justified may generate more perpetual claimants (the Sun's "welfare queens") and thus encourage the right to refuse increases (as has happened in the UK).

nlgbbbblth

Victor wrote:

nlgbbbblth: Commenting on internet grammar suggests a anal moron with too much time on his hands.

I don't know if that applies to you, but I do raise the question.

It doesn't
I was commenting on the character sketch conjured up by shoegirl's a)handle b) posts

nlgbbbblth

shoegirl wrote:

bizarrely accurate!
well except you made me slightly older.

well I had initially said early 30s but something made me go back and edit it upwards.