Do people overestimate the levels of benefits?

 Research and reflection from both sides of the Atlantic

For a couple of years now, I’ve had a poster on the wall of my office that shows the amount that different benefits in the UK are worth. When people notice it they’re often surprised by the headline levels of different benefits (e.g. the £71 per week for Jobseeker’s Allowance), wondering how on earth people could live on it. But it’s not (just) a way of making a point to people that come and see me; the benefits system is wildly complex, and I struggle to remember how much the different benefits and additions and allowances are worth, let alone how they would all fit together in the case of any given person.

If I struggle with it – and it’s partly my job to know this! – then my assumption has always been that most people have very little idea how much benefits are worth. And in a climate where the ‘luxury’ level of benefits is a staple of many newspapers (more on this later in the year), I also assumed that people would overestimate them. But the actual evidence on this is more mixed. 

How do we know people’s perceptions of benefit levels

The data here come (almost inevitably) from the British Social Attitudes (BSA) survey series. They seem to have thought that it was a bad idea to directly ask people, ‘exactly how much would an unemployed single mother receive in benefits?’, probably because most people would shrug their shoulders and look baffled. Instead, they ask about this in a more roundabout way:

• First they ask questions like: “Think of a 25 year-old unemployed woman living alone. Her only income comes from state benefits. Would you say that she … has more than enough to live on, has enough to live on, is hard up, or, is really poor?”

• They then follow this up by asking, “Now thinking again of that 25-year-old unemployed woman living alone. After rent, her income is £52 a week [in 2000].Would you say that she has more than enough to live on, has enough to live on, is hard up, or, is really poor?”

We can get an idea of whether people underestimate or overestimate the levels of benefits by comparing people’s answers to these two questions.  So for the example above, imagine someone answered the first question by saying that the unemployed woman ‘has enough to live on’. But when finding out that she gets £52 a week after rent, they then change their answer to ‘is hard up’. We can then infer that this person overestimated the level of benefits in this particular case.

Note that the amounts in the questions were calculated by the BSA team at NatCen, so we have to trust that they did this right. NatCen are one of the most trusted research institutions in the UK so in general I’m sure this is the case, although in one of the cases below there seems to be an error where the same amount was given for a person in both 2004 and 2008.

So what do people think?

The results are shown in the Table below.  Put simply, the picture is not consistent – even for the same benefit there is a split between those who underestimate and overestimate the actual level.

If we summarise the general pattern here, though we can see the benefits for working-age people without children (at the top) are overestimated – people are surprised by how low benefits are (as I expected).  Surprisingly though, benefit levels for working-age women with caring responsibilities and particularly pensioners are underestimated (i.e. people believe benefits are lower than they actually are).

Why might there be this difference?  Two explanations come to mind.  Firstly, these are the benefits which Labour particularly increased in recent years, resulting in reductions in pensioner poverty and child poverty. There might be a delay between changes in benefit levels and people realising this.  Secondly, though, pensioners and those with caring responsibilities tend to be seen as ‘deserving’ (particularly in the way they are described in these questions), while other unemployed people tend to be seen as less deserving. Politically there’s therefore a temptation to get headlines by saying ‘we’re cutting unemployment benefits’ at the same time as saying ‘we’re giving money to deserving pensioners’.

A final thought

One possible misinterpretation of these figures must be stopped in its tracks though:people do not generally think that benefits give people ‘have enough to live on’.  For nearly all of these hypothetical people, 60-70% of respondents think that they would be ‘really poor’ or (more commonly) ‘hard up’ when told the amount that people would actually receive.

The only exceptions to this are three situations where this drops to about 50% (the unemployed single mother with a child in both years, and the pensioner living alone in 2000), and one case where this drops to only 29% (the pensioner couple on £171/pw in 2005).  Even for the pensioner couple though, only 11% say that the couple have more than enough to live on.

In other words, when told how much people would actually receive in benefits (after rent), only a tiny fraction of the British population think that this is ‘more than enough to live on’ (11% at most for the pensioner couple, and typically 2-5%). But it’s only for a select group – working-age benefit claimants without children – that people actually overestimate the amount of benefits; generally people are aware that living off benefits is a struggle.

This seems puzzling in a climate where a cap on total benefits claims has been introduced because (in the Prime Minister’s words) “it is simply not moral that people should be paid more in benefits than the average working family earns”. How do we square this? It might be that people generally know most claimants don’t have lots of money but think that a small number receive unfairly large amounts. Or that they think that wages in low-skill jobs lead to people being ‘hard up’ too, and benefit claimants should be even more hard-up. Or it might be because these questions don’t ask about housing benefits, which were one of the key concerns highlighted by Cameron.

Thoughts welcome, as ever…

The Inequalities Blog

Also by Ben Baumberg:

How the public massively overestimates benefit fraud  June 14, 2012

Has the ‘Labour’ Party’s approach to sick and disabled people shifted?  May 17, 2012 

The human cost of disability cuts ~ Letters to The Guardian  May 17, 2012