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Welfare Reform on the Web (March 1999): Social Security - UK

BEATING FRAUD IS EVERYONE'S BUSINESS: SECURING THE FUTURE

London: TSO, 1998 (Cm 4012)

Alleges that fraudulent social security claims could be costing the taxpayer up to £7bn per year. Remedies proposed include improved detection of fraud, effective punishment of fraudsters, greater co-operation among stakeholders, and development of a highly-skilled anti-fraud profession.

(For comment see Independent, 14th July 1998, p. 9; Guardian, 14th July 1998, p. 10; Times, 14th July 1998, p. 1-2)

BEVERIDGE OR BROWN? CONTRIBUTION AND REDISTRIBUTION: THE REAL SOCIAL SECURITY DEBATE

S. Lawlor
London: Politeia, 1998

Argues that the Chancellor's plans to integrate the tax and benefits system and extend means testing mean that middle class people who have paid into the national insurance fund all their working lives will face loss of entitlements to benefits such as the state pension. Payments to the state would remain at much like the same level as at present, but would no longer be regarded as contributions. They would simply become an extra tax. Concludes by proposing that future reform of social security should be based on the contributory principle. Any reform must take into account contributions already paid to National Insurance, and universal benefits should be preserved where they already exist and should not be targeted.

BROWN'S £5bn WELFARE SWITCH

A. Segall
Daily Telegraph, 2 July 1998, p. 35

Reports that the Working Families Tax Credit, which replaces Family Credit, will be calculated by the Department of Social Security, but, instead of being paid by the DSS, the money will be added to the monthly wages of beneficiaries and paid by their employers through PAYE. This will make it virtually impossible to find out how much the reform of family support is costing.

COUNCILS WARNED ON ILLEGAL BENEFIT FRAUD PROBE

N. Timmins
Financial Times, 16th July 1998, p. 8

The government's high profile drive against benefit fraud received a set back when the Data Protection Registrar ruled that local authorities were breaking the law by going on wholesale "fishing expeditions" through staff payrolls to try and spot fraud. The aim was to match data against benefit claims to spot fraud, but the Registrar ruled that employers should disclose information on a case by case basis.


PHASING OUT DEPENDENCY

Adam Smith Institute
London, 1998

Proposes ending welfare dependency by replacing income support as a perpetual benefit with an income support which tapers to zero after three years. The state would play an active role in ensuring that sufficient low skill jobs were available to make up for the short fall in income support. It could generate a demand for jobs in personal and domestic services among the economically successful by treating this category as a tax deductible expense.

LONE MOTHERS MOVING IN AND OUT OF BENEFITS

M. Noble, G. Smith and S.Y. Cheung
York: York Publishing, 1998

Survey indicates that the overwhelming majority of lone mothers want to work. There was considerable movement on and off income support, with many lone mothers claiming only for short spells. Only 20% of the sample had an uninterrupted claim from 1993 to 1997. Lone mothers under 25 were most likely to come off income support, and were most strongly oriented to work. For many lone mothers in low-paid work, family credit acted as a stepping stone out of benefit altogether. However, a small number were unable to sustain work even with the support of inwork benefits. This group moved on to income support.

WELFARE AS "WAGES": BENEFITS, LOW PAY AND THE FLEXIBLE LABOUR MARKET

K. Puttick
Industrial Law Journal, vol. 27, no. 2, June 1998, p. 162-168

Note considers the role of in-work benefits in topping up wages in low-paid, part-time and flexible forms of employment. Argues that further restructuring of such benefits is needed if the social security system is to have a more effective impact on the "poverty trap" experienced by such workers. Possible developments include:

  • raised "earnings disregards";
  • more efficient child maintenance systems;
  • increased tax allowances;
  • accessible childcare schemes;
  • measures to make affordable housing more available.
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