Book Description

The benefits system as it stands often provides incentives to stay on benefits rather than take on a job. This paper identifies the key failings of the benefits system and outlines the objectives the Government believes the system should attempt to achieve. The framework being considered looks at the system of state support for the less well off as a whole and is designed to produce positive behavioural effects. The intention is to maximise work incentives while continuing to protect those most in need. This aim is to achieve this through new rules on how much of their earnings people can keep without losing benefit and by withdrawing benefits as earnings rise at a single, reasonable rate. The models being put forward for consultation include: i) a universal credit whereby elements of the current income-related and tax credit systems are combined, bringing out-of-work and in-work support together in a single system and supplement household earnings through credit payments; ii) a single unified taper would retain a set of benefits with a reformed delivery system whereby withdrawal would be through a taper applied to overall benefit eligibility as income increased; and ii) a single working age benefit which would give all working age claimants the same level of replacement income regardless of whether they were jobseekers, lone parents, sick or disabled. The Government is also looking at how to use smart automation to deliver support without the wasteful bureaucratic delays to payment that make the move into work more stressful than necessary