Duncan Smith unveils radical benefit reforms
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Work and pensions secretary Iain Duncan Smith has unveiled radical reforms to the benefits system.
Launching a consultation paper which proposes a ‘universal credit system’ which would bring together all out-of-work and in-work benefits and tax credits into a single, simplified payment, Mr Duncan Smith said the benefits system was ‘on the verge of breaking down’.
He told BBC Radio Four’s Today programme this morning that on his arrival at the work and pensions department, officials had said: ‘For goodness’ sake, let’s get on and reform this because we spend so much money holding together this complex system which is really, really on the verge of breaking down.
‘Every day we worry that we simply will have a system breakdown and we will lose people as a result.’
The consultation paper, 21st Century welfare, proposes a number of options for simplifying the benefits system, which it says is discouraging claimants from taking jobs. These include the universal credit, which would include income replacement paying similar rates to jobseeker’s allowance, income support, and employment and support allowance, help with housing costs and a replacement payment for child tax credit.
Other options for the simplified benefit payment are those proposed by the Institute for Public Policy Research, the Institute for Fiscal Studies, and the Taxpayers’ Alliance.
There are also plans for a tapered reduction in benefits as claimants move into work.
Mr Duncan-Smith said: ‘A system developed to help the most vulnerable and support people in times of need is trapping people in a cycle of dependency. We now have children growing up in households where neither parent works and where the only future is one stuck on benefits. This is a tragedy that we must bring to an end.
‘We are proposing to change forever how the system works. Not tinkering around the edges but a fundamental change from the top to bottom. Making it easier to help people into work, fairer to those who pay for the welfare state and continuing to provide unconditional support to those who need it.’
The consultation runs until 1 October 2010.
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Readers' comments (13)
Progressive Solutions Required | 30/07/2010 2:34 pm
This is so needed. Please take it further by removing all benefits and tax allowances and bandings, then applying the benefit universally (a multiplier to be paid to pensioners and those with disability).
The simplicity will be:
If you are a British Citizen you get paid the benefit and you pay X pence in every pound you then earn. If you want to live without working, fine, but that means you'll only have your UC.
This would mean:
no 1,000s of civil servants working out individual benefits
no means test
no 1,000s of more civil servants working out individual taxes
no 1,000s of even more civil servants paying out the benefits
no 1,000s of yet more civil servants collecting in the taxes
This would also mean employers free to employ at costs they agree and negotiate with their staff
People absolutely clear about what income they will have
Government benefits expenditure totally predictable every year
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Anonymous | 30/07/2010 4:38 pm
I wonder if there will be any provision for claimants to request that the housing element of their universal credit be paid direct to their Landlord ?
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kass | 30/07/2010 4:59 pm
Radical reforms? 'Radical' in social welfare was a word used to have a positive connotation, as bringing about better conditions for the down and outs.
I strongly suspect it's not used in this light here, and the down and outs will be even more so.
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ILAG | 30/07/2010 11:58 pm
IDS Rocks!
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Junior | 31/07/2010 10:39 am
I can't get a interview. I been trying for a job for 2 and half years and last tuesday a work trail job at the Job Centre . which means no pay just work experience which I phoned the Job Centre member of staff and by 16:00 p.m. that day closed the job due to 4,000.00 people apply for the job - this is life now in London. Some only paying minumum wages which I be luck if it would cover my rent in Social Housing let alone my Council Taxes. I spent the last two years up grading my knownledge and abilities in the field.
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Anonymous | 01/08/2010 7:08 pm
Radical change? From this coalition? No chance!
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Joe Halewood | 01/08/2010 7:37 pm
changes in circumstances anyone? Pooling all benefits into one payment sounds a good idea...on the surface. Yet whereas now a change in circumstances (CIC) may only affect one of many benefits it seems it will affect all of them.
Anyone who has had to wait 6 or 16 weeks for a HB claim to be decided - unfortunately very common - will understand the point I am making. its one thing making your landlord wait for money, its yet another waiting for income support.
The devil is in the detail which has not yet been announced - yet this is all too typical of IDS and his hare brained schemes and with this government also. Announce a superfically good idea and to hell with the detail and to hell with the consequences and to hell with what those consequences are - see the HB proposal debacle
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Anonymous | 02/08/2010 1:38 pm
Hi junior,
'this is life in London' which London is that?
Not the capital of the UK where there are numerous vacancies.
Some only pay the minimum wage. The minimum wage in the UK is a great deal more than in USA and probably 70% of the worlds population would like to earn it, instead of the 5p and 7p an hour they earn in places like india and china etc. etc.
Perhaps if you need to spend more than your full time job pays, you need one or two p/t jobs to top it up. Ive worked full time for nearly 50 years and 40 of those had at least two p/t jobs as well. I did send 6 months unemployed, but during that time had two part-time jobs but was still qualified for job sekers allowance.
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Anonymous | 02/08/2010 3:33 pm
If you work 57 hours a week at the minimum wage you would be able to afford from your net earnings a two-bed flat in Lewisham in the private sector. Not in westminster obviously.
Though you wouldnt have travel to work costs paid for... oh or food or heating or lighting or council tax!
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Anonymous | 02/08/2010 3:35 pm
...or shoe leather to walk to work or money for any other cost ... still think the minimum wage is great then? Or could it just be that PSLs are taking the micket by any chance??
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