Could a low income railcard work ?

[yorksrob]

I often say that railcards are there to generate business through a sunk cost.

Others say "no, they are there to assist groups of people who face barriers to rail travel"

If this be the case, shouldn't we have a railcard for those on lower incomes ?

Surely income is the underlying barrier to train usage that many of the railcards obliquely address.

It's apparent that some very wealthy people are eligible for railcards, while some not so wealthy people aren't.

Why not cut to the chase and have a railcard directly based on income ?

 

[Magdalia]

It is an interesting proposition.

But "work" can mean two different things here.

I often say that railcards are there to generate business through a sunk cost.

Others say "no, they are there to assist groups of people who face barriers to rail travel"

The first issue is is can a low income railcard work to achieve an objective? And is a low income railcard the most effective way of achieving the objective? There might be better ways of achieving the same objective, it is the end that's important not the means.

Of your two different objectives, a low income railcard will probably do more to assist groups of people who face barriers to rail travel than it will to generate business, because by definition low income people don't have much money to spend. There are probably other better ways of generating more business.

The other issue is can a low income railcard work administratively? How is eligibility decided? And how is the railcard withdrawn from people whose financial circumstances improve, so that they no longer qualify?

 

[Egg Centric]

How about a "rich *******" railcard where you have to pay double (a bit like first class on Southern)? Could be a status symbol amongst the arriviste.

More seriously there's a problem here. If we're going to use the railways for social engineering then the *actual* marginal tax rates in this country are like a bloody yo yo. The ones that get most attention are the 100k withdrawal of personal allowance / childcare cliff edge and the 50/60k child benefit withdrawal but there are pernicious ones at low income too - a cliff edge for carers where £1 a week can cost tens of thousands but also the universal benefit taper can essentially mean a marginal tax rate of 70+%. If you introduce this then (depending on what you are calling low income) for those that use it a lot you will be making this much worse, making that rate maybe up to more than 100% in some cases if they have a significant commute. In which case what incentive do they have to better their circumstances? You have created a poverty trap.

So it's a no from me.

 

[yorksrob]

It is an interesting proposition.

But "work" can mean two different things here.


The first issue is is can a low income railcard work to achieve an objective? And is a low income railcard the most effective way of achieving the objective? There might be better ways of achieving the same objective, it is the end that's important not the means.

Of your two different objectives, a low income railcard will probably do more to assist groups of people who face barriers to rail travel than it will to generate business, because by definition low income people don't have much money to spend. There are probably other better ways of generating more business.

The other issue is can a low income railcard work administratively? How is eligibility decided? And how is the railcard withdrawn from people whose financial circumstances improve, so that they no longer qualify?

Where the line should be drawn is the question. Personally I'd like it to be targeted at Theresa May's "Just About Managing's", rather than reserved just for those in abject poverty.

In terms of proving eligibility, I propose that people would present a benefit or tax document from the previous year every time they renew.

I contend that all railcards generate business from people travelling when they otherwise wouldn't do, whether that's their core function or just a by-product.

How about a "rich *******" railcard where you have to pay double (a bit like first class on Southern)? Could be a status symbol amongst the arriviste.

More seriously there's a problem here. If we're going to use the railways for social engineering then the *actual* marginal tax rates in this country are like a bloody yo yo. The ones that get most attention are the 100k withdrawal of personal allowance / childcare cliff edge and the 50/60k child benefit withdrawal but there are pernicious ones at low income too - a cliff edge for carers where £1 a week can cost tens of thousands but also the universal benefit taper can essentially mean a marginal tax rate of 70+%. If you introduce this then (depending on what you are calling low income) for those that use it a lot you will be making this much worse, making that rate maybe up to more than 100% in some cases if they have a significant commute. In which case what incentive do they have to better their circumstances? You have created a poverty trap.

So it's a no from me.

The obvious way to avoid that little conundrum would be to introduce a national railcard available to everyone, however the powers that be seem determined not to do that !

On the broader point, given all the other cliff-edges you've mentioned, I very much doubt that this railcard would lead to someone rationally choosing not to better themselves.

The 100k withdrawal of personal allowance is far above the income level I would target the railcard at.

From a social engineering point of view, this would not only help people who are being burdened with inflation, it might actually facilitate self betterment if it enables people to seek job/educational opportunities elsewhere.

 

[Egg Centric]

Where the line should be drawn is the question. Personally I'd like it to be targeted at Theresa May's "Just About Managing's", rather than reserved just for those in abject poverty.

In terms of proving eligibility, I propose that people would present a benefit or tax document from the previous year every time they renew.

I contend that all railcards generate business from people travelling when they otherwise wouldn't do, whether that's their core function or just a by-product.



The obvious way to avoid that little conundrum would be to introduce a national railcard available to everyone, however the powers that be seem determined not to do that !

On the broader point, given all the other cliff-edges you've mentioned, I very much doubt that this railcard would lead to someone rationally choosing not to better themselves.

The 100k withdrawal of personal allowance is far above the income level I would target the railcard at.

From a social engineering point of view, this would not only help people who are being burdened with inflation, it might actually facilitate self betterment if it enables people to seek job/educational opportunities elsewhere.

Those cliff edges very much affect people's behaviour though. And therefore so would this we're talking about a benefit potentially worth many thousands here.

If it were a "sliding scale" railcard you would avoid this problem, e.g. let's say you get 34% off at 20k and lose 2% discount every 1k up to 37k. That would lose the incentives issue but at the disadvantage of being horrendously complicated UNLESS it was administered by some kind of "voucher" scheme rather than a railcard. But then we have a black market in vouchers... I dunno I can't think of a sensible way.

National railcard sounds good to me though!

 

[yorksrob]

Those cliff edges very much affect people's behaviour though. And therefore so would this we're talking about a benefit potentially worth many thousands here.

If it were a "sliding scale" railcard you would avoid this problem, e.g. let's say you get 34% off at 20k and lose 2% discount every 1k up to 37k. That would lose the incentives issue but at the disadvantage of being horrendously complicated UNLESS it was administered by some kind of "voucher" scheme rather than a railcard. But then we have a black market in vouchers... I dunno I can't think of a sensible way.

National railcard sounds good to me though!

Yes, I think anything too complicated would be a no-goer.

 

[nw1]

I would say yes - why should a 29-year-old entrepreneur or City worker be entitled to discounted travel when a 30-to-64-year old unemployed or poorly-paid person would not be?

 

[yorksrob]

I would say yes - why should a 29-year-old entrepreneur or City worker be entitled to discounted travel when a 30-to-64-year old unemployed or poorly-paid person not be?

I very much agree with this sentiment.

 

[HSTEd]

A rather large fraction of the population already gets discounted rail travel, a low income entitlement would just put the number even higher.

Given the very low price of railcards compared to fares, I see little point continuing with them at that point - just cut the baseline fares and abolish them.

EDIT
57 million people 16+ in the UK, only 25 million don't qualify for an age based railcard. A substantial portion of those will qualify for an education based young person railcard, a network railcard or a disabled railcard.
The fraction of people who don't get a functionally free 30% off fares grows smaller with each passing year.

 

[Egg Centric]

I would say yes - why should a 29-year-old entrepreneur or City worker be entitled to discounted travel when a 30-to-64-year old unemployed or poorly-paid person not be?

When I was 29 there wasn't such a thing as a 25-30 railcard. I fully expect the moment I turn 41 for a 30-40 year old railcard to be introduced

 

[yorksrob]

A rather large fraction of the population already gets discounted rail travel, a low income entitlement would just put the number even higher.

Given the very low price of railcards compared to fares, I see little point continuing with them at that point - just cut the baseline fares and abolish them.

That's an interesting point. However if you just cut the baseline fare, there's nothing to benchmark it against, so they'll just put it up to what it was anyway.

Same thing happens with my broadband provider. Whatever I do to change the package, it always just goes back to what it would have been anyway !

 

[nw1]

A rather large fraction of the population already gets discounted rail travel, a low income entitlement would just put the number even higher.

Given the very low price of railcards compared to fares, I see little point continuing with them at that point - just cut the baseline fares and abolish them.

This isn't a good idea IMO - either the cut to fares would not be comparable with the railcard discount (disadvantaging railcard users) or would allow people who can afford to pay full-whack to get discounted fares (bad for the railway's income).

EDIT
57 million people 16+ in the UK, only 25 million don't qualify for an age based railcard.

All the 30-to-64 year olds, is that really less than half the 16+ year olds of the country?

 

[Egg Centric]

That's an interesting point. However if you just cut the baseline fare, there's nothing to benchmark it against, so they'll just put it up to what it was anyway.

Same thing happens with my broadband provider. Whatever I do to change the package, it always just goes back to what i would have been anyway !

Same thing if everyone has a railcard. Headline fare prices will bear as much resemblance to the actual price as a DFS Sofa!

 

[HSTEd]

This isn't a good idea IMO - either the cut to fares would not be comparable with the railcard discount (disadvantaging railcard users) or would allow people who can afford to pay full-whack to get discounted fares (bad for income).

But the railcard eligibility bares little relation to who "can afford to pay full whack".

All the 30-to-64 year olds, is that really less than half the 16+ year olds of the country? Very surprised.

It's 31 to 59 year olds, because the age limitation of the Senior Railcard is 60 and not 65.

 

[Egg Centric]

It's becoming increasingly obvious to me that the real problem here isn't railcards. It's that there is absolutely no consensus what the railway is for and we really need that before discussing pricing strategy.

Some kind of egalitarian mission is completely different to minimising congestion is completely different to maximising revenue is completely different to...

 

[yorksrob]

Same thing if everyone has a railcard. Headline fare prices will bear as much resemblance to the actual price as a DFS Sofa!

I suppose so. Switzerland seem to manage something similar though, and there's no way everyone would buy a national railcard, so you would have the non-discounted fare for occasional travellers.

However, a national railcard is a digression from my thread (much as I like talking about it )

But the railcard eligibility bares little relation to who "can afford to pay full whack".

I would say that my proposed railcard would be vastly more aligned to ability to pay, than the existing range of railcards.

 

[nw1]

But the railcard eligibility bares little relation to who "can afford to pay full whack".

Changing the railcard eligibility (e.g. increasing Senior Railcard limit to 65 as I thought it was, or withdrawing the 26-30 railcard) while also introducing an income-based railcard for those on low income at any age would help here.

It's 31 to 59 year olds, because the age limitation of the Senior Railcard is 60 and not 65.

Ah right, I thought they'd changed that years ago in line with the increase in pension age.

 

[yorksrob]

It's becoming increasingly obvious to me that the real problem here isn't railcards. It's that there is absolutely no consensus what the railway is for and we really need that before discussing pricing strategy.

Some kind of egalitarian mission is completely different to minimising congestion is completely different to maximising revenue is completely different to...

At a fundamental level, I would say that the railway should be less commercial, more public service. I see it as a facilitator to broader economic activity.

However, that doesn't stop us having railcards !

 

[Elecman]

The senior railcard should be set at state pension age not 60 or 65

 

[yorksrob]

The senior railcard should be set at state pension age not 60 or 65

I don't agree with anything that makes my getting a railcard further away.

 

[DanNCL]

I think there’s a relatively easy way to implement such a railcard, maybe not the fairest way but it would work. The solution would be to have the DWP as the railcard issuer for those specific railcards and for them to be automatically issued to anyone on Universal Credit or equivalent benefits.

 

[A0]

I would say yes - why should a 29-year-old entrepreneur or City worker be entitled to discounted travel when a 30-to-64-year old unemployed or poorly-paid person would not be?

There is already a railcard for the unemployed which is issued free of charge to those eligible.

Jobcentre Plus Travel Discount Card | Avanti West Coast

With the Jobcentre Plus Railcard, you can save 50% off rail travel if you are currently unemployed and actively seeking employment. Get your free card today.

www.avantiwestcoast.co.uk

 

[Egg Centric]

I think there’s a relatively easy way to implement such a railcard, maybe not the fairest way but it would work. The solution would be to have the DWP as the railcard issuer for those specific railcards and for them to be automatically issued to anyone on Universal Credit or equivalent benefits.

Please please please look into such things as the 16 hour work week trap and so on. This sort of well meaning stuff traps peoples in poverty. Cliff edges for relatively inconsequential stuff like winter fuel payment can be tolerated but a railcard worth many thousands should not have such low thresholds

 

[JonathanH]

Cliff edges for relatively inconsequential stuff like winter fuel payment can be tolerated but a railcard worth many thousands should not have such low thresholds

Anyone at the relevant cliff edge won't be able to make a railcard become worth 'many thousands'.

The idea that anyone on a low income has money to make discretionary journeys is quite naive. That is why it is fairly reasonable to try to push more of the cost of rail travel onto its users. Outside the major conurbations rail travel is generally something people do when they have a reasonably comfortable income.

 

[Egg Centric]

Anyone at the relevant cliff edge won't be able to make a railcard become worth 'many thousands'.

The idea that anyone on a low income has money to make discretionary journeys is quite naive. That is why it is fairly reasonable to try to push more of the cost of rail travel onto its users. Outside the major conurbations rail travel is generally something people do when they have a reasonably comfortable income.

I'm not referring to discretionary journies. I'm referring to commuting.

 

[JLH4AC]

I think there’s a relatively easy way to implement such a railcard, maybe not the fairest way but it would work. The solution would be to have the DWP as the railcard issuer for those specific railcards and for them to be automatically issued to anyone on Universal Credit or equivalent benefits.

DWP is one of the last Department you want to have anything to do with railcard schemes, they are unable/unwilling to handle their current commitment to process benefit claims in a timely manner and a UN committee found that it and the government were guilty of grave and systematic breaches of the human rights of disabled claimants. It being handled more likely how the Disabled Persons Railcard is now would be quicker, fairer and more cost effective (No need to administer railcards for people that do not need/want them.).

The other issue is can a low income railcard work administratively? How is eligibility decided? And how is the railcard withdrawn from people whose financial circumstances improve, so that they no longer qualify?

It would not be that hard to administer, a person would be eligible if they are able to produce a letter proving that they received a means-tested benefit in the past 12 months. If the possibility of poor people using the railcard after stopping being so poor is such a problem for the scheme they could limit it for a year like they do with the Network and 26-30 Railcards.

 

[43066]

I would say yes - why should a 29-year-old entrepreneur or City worker be entitled to discounted travel when a 30-to-64-year old unemployed or poorly-paid person would not be?

But, turning that around, why should a wealthy 60 year old be entitled to a discount when a hard up 29 year old wouldn’t be? Demographics being as they are, there will be *far* more wealthy retirees benefiting from railcards than there will be 29 year old entrepreneurs and highly paid city workers.

The obvious way to avoid that little conundrum would be to introduce a national railcard available to everyone, however the powers that be seem determined not to do that !

If you were going to do that it would undermine the long standing policy of transferring more of the cost of running the railway onto passengers and away from general taxation. A more straightforward approach to achieve the same end would be to simply abandon that policy and make fares cheaper across the board.

 

[yorksrob]

I think there’s a relatively easy way to implement such a railcard, maybe not the fairest way but it would work. The solution would be to have the DWP as the railcard issuer for those specific railcards and for them to be automatically issued to anyone on Universal Credit or equivalent benefits.

Please please please look into such things as the 16 hour work week trap and so on. This sort of well meaning stuff traps peoples in poverty. Cliff edges for relatively inconsequential stuff like winter fuel payment can be tolerated but a railcard worth many thousands should not have such low thresholds

As I said in an earlier post, I think the card should be targeted at the JAM's, so it wouldn't amount to a poverty trap as JAM's aren't generally in poverty.

I also don't agree that something that brings down everyday costs catches people in a poverty trap. Don't forget - rail travel isn't income or benefits - people have an element of choice as to how much they use it.

But with that in mind, I feel that receipt of income related benefits is too narrow an eligibility criteria.

Anyone at the relevant cliff edge won't be able to make a railcard become worth 'many thousands'.

The idea that anyone on a low income has money to make discretionary journeys is quite naive. That is why it is fairly reasonable to try to push more of the cost of rail travel onto its users. Outside the major conurbations rail travel is generally something people do when they have a reasonably comfortable income.

Assuming that that's correct, how much of that is a product of not being able to afford high fares ?

If people had access to lower fares, those people would likely make more journeys to their benefit !

 

[Magdalia]

I contend that all railcards generate business from people travelling when they otherwise wouldn't do

On the other hand, railcards also reduce revenue because there will be some people using railcards who would have travelled anyway paying the full fare.

From a revenue perspective, the key question is what is the net impact when one is set off against the other.

 

[JonathanH]

If people had access to lower fares, those people would likely make more journeys to their benefit !

That would lead to overcrowding and worse funding for the railway. How do you ensure that only those who currently can't afford railway fares have access to lower fares?