Why indeed has the UK’s social security system become so means-tested? After all, it was not designed to operate that way.
In answering this question, it is worth dividing the system into three broad sectors: benefits for adults of working age, for children, and for those receiving the state pension. Their histories have differed. And, in answering the question, it is necessary to go back to the founding document of Britain’s modern welfare state, the Beveridge report of 1942.
Beveridge had a visceral dislike of means-tests, and he was far from alone. He and many in Britain remembered only too well the punitive household means-tests of the early 1930s where a grandparent in the same household qualifying for a pension, or child taking a paper round, could see benefit abolished or reduced.
These means-tests were seen to be demeaning. They penalised savings, and discouraged any step back into work short of a job sufficiently well paid to lift the entire household off ‘the dole’, as unemployment assistance was popularly known. The means-tests almost actively encouraged small-scale fraud – why declare a tiny amount of income when benefit could be reduced? – and it led to neighbours snitching on each other, bringing the ‘means-test men’ round if an unexpected new coat or pair of shoes appeared (Fraser, 1973, p. 180).
In his report, Beveridge says that the means-test is offered ‘only on terms which make men unwilling to have recourse to it’, and they ‘penalise what people have come to regard as the duty and pleasure of thrift, of putting pennies away for a rainy day’.
Throughout the report, he is clear that the minimum benefits he proposes ‘should be given as of right and without means-test, so that individuals may build freely upon it’, and that ‘no means-test of any kind can be applied to the benefits of the scheme’.
Cite this as:
Timmins, N. (2023), ‘Why has the UK’s social security system become so means-tested?’, IFS Deaton Review of Inequalities, https://ifs.org.uk/inequality/why-has-the-uks-social-security-system-become-so-means-tested