Having had experience of living on benefits when my husband got laid off, I can only assume the people living the life of riley on them must have other forms of income. We got invited to an important family occasion and I had to sell my jewellery so we could afford to go. We used our savings to keep the car on the road for when my husband got work and even managing the money the best we could, just scraped by.
Like I said, it seems to be a system you have to 'buy into' from the start in order to get the maximum out of it.
If you're laid off or whatever, then you get thrown scraps.