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TFI Daily News

World News for World Changers

Jan 17

A Harder Look at Welfare Rules as Europeans Flood Countries in Search of Jobs

By Stephen Castle, NY Times, Jan. 15, 2014

LONDON—When she arrived in Britain a decade ago from Poland, Justyna Mikler worked hard to find cleaning jobs, studied English and, she says, never even thought of applying for welfare.

Now the director of a cleaning firm, Ms. Mikler estimates that about a third of the more than 50 Poles she employs claim some form of benefits from the British state.

“The system allows them to do it so easily—it’s a nonsense,” she said, speaking over a late lunch of soup in a cafe at a Polish center in West London.

As part of the 28-nation European Union, Polish citizens have most of the same welfare rights here as Britons, under a European Union policy designed to foster European integration and create a vibrant economic market with mobile workers.

Instead, it seems to be driving Europeans apart.

At a time when some governments’ austerity policies have led to deep spending cuts, Europe’s ill-tempered debate over immigration has become intertwined with an equally thorny discussion of the costs of welfare, especially after Romanians and Bulgarians gained full access across European labor markets this year.

Benefits in Britain may be higher than in former Communist countries now part of the European Union, but they are not especially generous by Western European standards. Yet access to them is relatively easy, for workers as well as the jobless, and, unlike in some European countries, they are not usually based on claimants’ previous social security contributions.

“In Britain in particular this is creating a toxic situation,” said Mats Persson, the director of Open Europe, a research group in London, “combining worries about immigration, the European Union and welfare benefits with a general mistrust of politicians in charge of the system.”

The political poison has been spreading. When Prime Minister David Cameron suggested changes to welfare rules last year that would make it harder for some immigrants to receive benefits, Laszlo Andor, the European commissioner for Employment, Social Affairs and Inclusion, said Britain risked being seen “as a kind of nasty country in the European Union.”

More recent suggestions of curbs brought an acid response from Radoslaw Sikorski, Poland’s foreign minister, who, like Mr. Cameron, was educated at Oxford University and was even a member there of the same elite club, the Bullingdon.

“If Britain gets our taxpayers, shouldn’t it also pay their benefits?” Mr. Sikorski wrote on Twitter last week.

Nevertheless, rules that allow people to move freely throughout the European Union and give them equal rights are being questioned for the first time in years.

The debate in Britain is particularly fevered in part because a government study commissioned before eight former Communist countries were admitted to the Union in 2004 hugely underestimated immigration from Eastern Europe, suggesting there would be 5,000 to 13,000 arrivals a year up to 2010. But only two other European Union nations, Ireland and Sweden, opened their labor markets in 2004, so Britain saw a surge in immigration. A 2011 census listed 521,000 Polish-born people as residents in Britain, the vast majority having arrived after 2004.

Most economists believe this influx of mainly young and highly motivated workers gave a lift to the British economy. Studies have shown that such workers pay more in tax and social security into host countries’ budgets than they receive in benefits.

But, given the numbers in Britain, it is little surprise that strains in Europe’s welfare architecture are appearing here. Because it was a previous, Labour government that eased restrictions on Eastern European workers, the current Conservative-led administration can reject blame.

The hottest welfare issue is payments to parents, which can be claimed even if children are living in another European nation. In Britain, Child Benefit, as it is known, is worth 20.30 pounds, or about $33.40, per week for a first child and 13.40 pounds for subsequent ones. According to British figures, in December 2012 there were Child Benefit awards to 24,082 parents for 40,171 children living elsewhere in Europe, including 25,659 children in Poland.

Mr. Cameron wants to reduce or end such benefits for children living abroad, and has suggested limiting the right of migrants to come to Britain if the average income of their home country is far below the European average.

Several other European Union countries have similar benefits for children and therefore share Britain’s worries, or have broader concerns about “welfare tourism,” in which people move abroad to secure payments. Britain says it is working with Germany, Austria, the Netherlands and others on possible changes.

But the British have special reasons to worry because of the design of the rest of their benefits system. Forged after World War II, the British welfare state is financed mainly from general taxation and is built on the idea that those in need should receive similar amounts, regardless of what they have paid in social security contributions.

Its architect, William Beveridge, sought to eliminate poverty, protecting Britons from the “cradle to the grave,” but he could not have foreseen a Europe with a shifting population of mobile workers.

Benefits available to European immigrants in Britain include tax credits for low-paid workers and housing subsidies. But other European countries base payments on contributions of employees or employers, making them less generous to newly arrived workers. In these “Bismarckian” systems—after the 19th century German chancellor Otto Von Bismarck—benefits are linked to previous earnings, according to a report by the All-Party Parliamentary Group for European Reform.

The report says those who lose jobs in France, Denmark or Germany can expect to receive 40 percent to 90 percent of their net salary for a specified period, much of it financed by compulsory social insurance or employer contributions. In Britain, the jobless receive a maximum 71.70 pounds per week for six months, however much they have paid in contributions.

“By Western European standards the British system is not very generous in terms of the amount you can claim, though of course this is more than in Eastern Europe,” said Stephen Booth, the research director of Open Europe, who helped draft the report, “but it’s very generous in terms of giving access to the benefits.”

Wlodzimierz Mier-Jedrzejowicz, vice-chairman of the Federation of Poles in Britain, said Polish people overwhelmingly came to Britain to work, not to collect social security.

“Those who work and do pay taxes frequently claim the benefits they are allowed to,” he said. “That is legitimate. If the British government feels it is inappropriate, then it is up to them to put in place the appropriate legislation.”


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