Social Security Committee
London: TSO, 1999. (House of Commons papers. Session 1998-99; HC 114)
Reviews the case for and against taxing child benefit. Should taxation of Child Benefit for higher rate taxpayers be proposed, care should be taken that a) the principle of independent taxation is not breached; b) the issue of potential evasion amongst cohabiting couples is seriously addressed, and c) the revenue raised is used to provide further increases in Child Benefit. Existing standard rate taxpayers should not be brought into higher rate tax by virtue of receipt of Child Benefit.
Times, March 18th 1999, p. 10.
Childcare organisations catering for 8 to 14 year olds will be able to apply for accreditation with a regular inspection by government-approved agencies such as the Kids Club Network. This will enable parents wanting to take advantage of the childcare tax credit to use breakfast clubs, after-school and holiday clubs. The tax credit applies only to registered forms of childcare, and until now out-of-school clubs for over-8s have been exempt from regulation.
Guardian, March 8th 1999, p. 10.
In a move which has delighted welfare groups, ministers have decided that lone parents receiving a state top-up of low earnings should no longer be required to co-operate with the Child Support Agency. The 182,000 lone parents affected will also be able to keep all child maintenance paid by a former partner. At present they can only keep £15.00 per week before the government starts clawing it back.
Community Care, no. 1260, 1999, p. 7.
Disability groups are bitterly disappointed that the Welfare Reform Bill proposes to abolish Severe Disablement Allowance for new claimants over 20 years old and to limit Incapacity Benefit to those who have paid full National Insurance contributions in one of the two proceeding years. These measures would result in £750 million of cuts to Incapacity Benefit and lead to thousands of disabled people losing out.
Financial Times, March 1st 1999, p. 18.
Argues that taxing child benefit for higher rate taxpayers would be wrong in principle and in practice.
Times, March 4th 1999, p. 1.
Reports government plans to combat benefit fraud by more rigorous checking of claims, abolition of the Weekly Benefits Savings system, instructing the Post Office not to redirect benefit cheques and the introduction of a computer system to cross-check information received by different government agencies so that people making fraudulent claims can be identified automatically.
(See also Guardian, March 4th 1999, p. 10)
Financial Times, March 11th 1999, p. 12.
It is argued that the new children's tax credit will not benefit very low paid families as it will go only to families with enough taxable income to offset against it. In single-earner couples the credit will have to go to the earner, usually the father, unlike child benefit paid mostly to mothers. At the upper end of the income scale, from an income of around £32,500, £1 of the credit will fall away for each £15 of income. A couple who each earn £30,000 each will receive the full credit as neither pays higher rate tax, while a single earner on £32,500 will start to lose it. This appears unfair.
Guardian, March 10th 1999, p. 24.
Praises the budget which has created a finely tuned network of children's benefits. The poorest unemployed families can get higher income support, the poor in work can get more Working Families Tax Credit, and average families will get the children's tax credit. The budget is stealthily redistributive, with the rich being squeezed through the raising of the National Insurance contribution ceiling, the abolition of mortgage tax relief and of the married couples' tax allowance.
C. Grover and J. Stewart
Journal of Social Policy, vol. 28, 1999, p. 73-96.
The 1990s have been marked by high levels of economic inactivity, low wages and fears about inflation. It was thought that these problems could be addressed through the social security system, in particular by the use of in-work means-tested benefits, which had some measure of compulsion to work attached. The aim of in-work benefits is to reduce wages still further so that the market can respond by creating more low-wage employment. By the stratagem, it is the market that responds to labour demand rather than the government creating work opportunities.
Community Care, no. 1260, 1999, p. 10.
Briefly outlines the provisions of the Welfare Reform and Pensions Bill, which the government is promoting as the beginning of the welfare revolution. Opponents regard the Bill as a cynical attempt to reduce the £90 billion benefits budget at the expense of the most vulnerable claimants. Tough provisions in the Bill include proposals that all claimants (including the disabled and lone parents) will be forced to attend a single gateway interview to examine the work options available before benefits can be awarded. Incapacity Benefit will only be available to those who have paid National Insurance contributions in the past two years and Severe Disablement Allowance will be abolished for those more than 20 years old.
Guardian, Feb. 22nd, 1999, p. 19.
Explains practical problems of implementing the proposed tax on child benefit for high earners. These difficulties stem from the fact that the British tax system treats all taxpayers as individuals rather than as man and wife. Most recipients of child benefit are women who do not earn enough to pay tax at the higher rate. Taxing it at the higher rate would raise little unless the incomes of partners were taken into consideration.
International Social Security Review, vol. 52, 1999, p. 7-30.
Suggests a reversal of the historical basis for social security during this past century. Instead of providing a system that imposes burdens on employers and treats the self-employed as self-employers, we could treat all who are economically active as self-providers. We could insist that they make provision for themselves and their dependants. The role of the employer would be in part as educator and facilitator and in part as enforcer, in addition to providing employees with the funds to pay their contributions.
International Social Security Review, vol. 52, 1999, p. 31-47.
In the UK, self-employed people are excluded from some of the most valuable contributory social security benefits in the state scheme. There is also evidence of underuse of benefits to which they do have access. There are administrative difficulties in dealing with claims from self-employed people for benefit, and there is a significant problem of uncollected revenue from National Insurance contributions. Self-employed people are not well provided for through private pensions and insurance. All this suggests the need for a fundamental review of social security for self-employed people in the UK.
J. Duncan Smith
Telegraph, Feb. 16th 1999, p. 28.
Argues that the Labour government's policy of extending the means testing of social security benefits is creating disincentives for people to take low-paid jobs. Extra burdens on business such as the minimum wage, the working families tax credit, forced union recognition and the working time directive will inhibit the creation of new jobs. It will be impossible to compel claimants to take jobs which do not exist.
Plans a central role with the Benefits Agency and local authorities in developing the government's proposed single gateway into the benefit system, while continuing to ensure that Jobseekers' Allowance requirements are being properly applied.
Times, Feb. 16th 1999, p. 20.
Argues that placing single mothers in hostels could provide them with companionship, and easy access to medical services, help and advice. A stay in a hostel would not be compulsory, but they could serve for a transitional period while the single mother finished training and got used to the baby.