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Welfare Reform on the Web (August 2010): Social security - UK

21st century welfare

Department for Work and Pensions

London: TSO, 2010 (Cm 7913)

The principle behind this consultation on the reform of the benefits system is to encourage the unemployed to work by allowing them to continue to claim when they start a job. State support, given either through an income tax rebate or the benefits system, would gradually taper off once they began to earn more. Benefits could also be localised so that those living in affluent areas would receive more to take account of the higher cost of living. The system would also be simplified, with all benefits possibly unified into one and tax credits phased out. Five options are offered for comment:

  1. universal credit, a single payment for working-age households, combining out of work benefits and tax credits
  2. single unified taper, under which separate benefits, such as those for housing and disability, would continue, but would all be reduced at the same rate as the recipient earned more money
  3. single working-age benefit, a flat rate benefit giving all those of working age the same amount, regardless of whether they are working or have disabilities, with supplementary payments for certain people and tax credits being retained
  4. negative income tax model, under which households would be guaranteed a certain minimum income (around 50% of average earnings) paid as income tax rebates directly into bank accounts, with the amount paid falling as the person earned more
  5. Mirrlees model, under which all benefits and tax credits would be combined into a single family allowance paid directly into bank accounts, with support for the unemployed significantly less than under the current system.

Benefits health test faces urgent review after only 6% pass

P. Wintour

The Guardian, July 28th 2010, p. 9

The minister for work and pensions, Chris Grayling, is conducting an urgent review of a new medical test for incapacity benefit following evidence which suggests that only 6% of those tested were deemed to be totally incapable of working. Graying has defended the principle of the tests but has said that they need to be used sensitively and that there needs to be a review into how they are applied.

(See also Daily Telegraph, July 28th 2010, p.1)

Credit agencies lined up to pinpoint benefit cheats

N. Morris

The Independent, July 1st 2010, p. 8

As part of the campaign to cut the 3bn benefit fraud bill, credit agencies have been called in by ministers trying to clamp down on bogus housing benefit claims using techniques borrowed from the private sector for assessing creditworthiness. Civil liberty groups have raised concerns over potential breaches of privacy.

Final hurrah for ILF?

G. Carson

Community Care, July 8th 2010, p. 22-23

New applications for financial support from the Independent Living Fund (ILF) by disabled people have exceeded its budget to the extent that it has announced that it will refuse all requests for help received from June 2010 to March 2011. There are concerns that this move could be a preamble to the eventual closure of the fund, which is highly valued by disabled people.

Osborne eyes existing incapacity claimants for major savings

A. Grice

The Independent, June 28th 2010, p. 9

Chancellor George Osborne announced that incapacity benefit will be targeted for savings, with ministers believing many of the 2.6 million claimants are capable of some work and are willing to work part-time with appropriate advice and support. Among the measures being considered are speeding up the Fit-to-Work tests for existing claimants, a move officials believe would take one million people off incapacity benefits.

(See also the Independent, June 29th 2010, p.6)

Support to incapacity benefits claimants through Pathways to Work

National Audit Office

London: TSO, 2010 (House of Commons papers, session 2010/11; HC 21)

This report assesses the progress of the Department for Work and Pensions (the Department) in reducing the number of incapacity benefits claimants and the effectiveness of its Pathways to Work employment programme. The Department introduced Pathways to offer earlier and more extensive employment support to claimants. In October 2008, the Department introduced a new benefit called the Employment and Support Allowance (ESA) for all new incapacity benefits claims. The Allowance introduces a new medical assessment to help determine eligibility, which is completed at the start of the claim, as well as obligatory work focused interviews. Overall, while the Department has made a real attempt to reduce the levels of claimants of incapacity benefits, Pathways has turned out to provide poor value for money and the Department needs to learn from this experience. In the future it should base its policy decisions on a robust and clear evidence base, follow best contracting practice and establish a measurement regime which allows it to understand better what happens to those whom they may have helped

Welfare overhaul transforms the fight against poverty

R. Watson

Children and Young People Now, July 6th-12th 2010, p. 8-9

The coalition government has introduced deep cuts in out-of-work benefits in its emergency budget, which will hit the poorest families hardest. The 2bn boost to child tax credits for low-income families will not compensate for other losses. The government says it wants to encourage people to work their way out of poverty and benefit dependency.

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