Ben Simmons: Why a Basic Income could be the answer to the big pension problem

CommonSpace columnist Ben Simmons makes the case for a radical redesign of the welfare system and how we view it

AT THE recent Scottish Independence Convention conference, Jim Stamper of Pensioners for Yes gave an excellent account of the challenges facing the independence movement when it comes persuading pensioners to vote for change.

One of the most shocking points was that No voters are over-represented among pensioners because those disadvantaged by the status quo simply die much sooner.

The extent of this health inequality is a criminally neglected part of the national discussion and should be a source of outrage for every one of us regardless of our views on Scotland as an independent nation.

READ MORE: The basic income: Can it really work or is it all just a pipe dream?

Addressing inequality means fighting a hydra of ideology and economics, a fight that is fiercer every year of our voluntary austerity. The worst of all possible solutions is to do nothing at all and pretend that the pension age is nothing to do with how soon the government thinks you will die, and that it isn’t a lifeboat to be subtly rowed away from those unfortunate to live their lives below deck.

People in the most deprived communities in Scotland now face many more years of unemployment and ill health before receiving a pension, with the effect that a raised retirement age is a targeted sanction against those least likely to find work and with the lowest expected lifespan.

Bringing money into these deprived communities is essential because it brings with it security, freedom from sources of ill health such as stress and anxiety, and freedom to contribute to the community and local economy. 

Universal credit, while not wildly popular or well thought out, at least has a reasonable goal of simplicity of administration. Ideally, when it is easier to access support more people will be able to get the support to which they are entitled.

Unfortunately, the benefits system as it stands is inflexible, and deters those receiving support from seeking work through both a high rate of withdrawal (effectively slashing your hourly pay), and sanctions if you make a mistake trying to declare your situation. 

READ MORE: Think-tank research chief hits back at Tory attack on a Scottish Basic Income

Giving up even a meagre sense of security to work for what is basically a fraction of the minimum wage on a zero-hours contract is not only unattractive, it is almost immoral if it risks the wellbeing of any dependents.

There is an alternative with a growing profile internationally, but especially in Scotland. A Basic Income is the idea that every citizen receives the same amount of state support each month to ensure that poverty can be avoided. 

We figure out what we as a society wish the bottom rung to look like, and design a welfare system to make sure that no one can descend any lower, regardless of circumstance. Like universal credit this would mean replacing the complex web of benefits with a simple to administer, non-means-tested payment to each citizen.

There would still be a few selective benefits, such as disability benefits and housing benefit, and an infant would not receive the same as someone in retirement, but by and large we would all be able to live in dignity. 

The net result is that unpaid work is recognised and rewarded, your income is not threatened by finding work, and financial dependency becomes a thing of the past.

READ MORE: 5 ideas from the launch of Scotland's Basic Income Network

Many different funding models have been proposed to fund such a system, from sovereign wealth funds, to a flat tax on earnings. A new book launched this summer takes an exhaustive look at how such a scheme could be implemented in Scotland, and pilot schemes are already being discussed in Glasgow, Ayrshire and Fife. 

If you’re interested in learning more, Citizen’s Basic Income Network Scotland (CBINS) is raising awareness among the public and within governments about the positive change welfare reform would bring, and several reports have been published by both thinktanks and political parties on the topic.

As the prospect of retirement and the financial security of a pension becomes ever more elusive, it may seem counter-intuitive to suggest implementing something that looks a bit like a pension for everyone from birth. 

But the truth is that we need to abandon our idea of retirement as freedom from poverty for those that have earned it, and recognise that freedom from poverty is something that we all deserve.

Picture courtesy of Garry Knight

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