I was on the road yesterday (I seem to do too much driving for my own good), and listening to Jeremy Vine show on Radio2. The comments and calls on the issue of Benefits was interesting, but perhaps overshadowed by the violence of the student’s protest the day before.
The announcements of the shakeup of the benefits system is welcome. It was long overdue. The years of the previous Labour government saw an unprecedented rise in benefits dependency, a situation that is hidden from the taxpayer, but quite apparent to those who deal with Claimants on a regular basis, as I do.
When young able bodied men and women opt to live on benefits because they are better off than in work, then you know that something is seriously wrong. Welfare is not, and should not be the better life option to chose. There is no reason why taxpayers should continue to fund the lifestyles of those who can, but chose not to work. The welfare state is there to give a helping hand to those in need, but unfortunately, in its current form, it tends to let those needy people down far too often.
There is understandably concern about the changes, but as long as the safety net is still there for those in genuine need, the changes are welcome.
The main points of the Universal Credit (UC) system are that:
- Low paid workers get to keep more of what they earn
- Benefits will be cut for up to three months anyone who consistently refuses suitable job offers
- People can move in and out of work without losing benefits
- It comes into effect starting in 2013
- Will take up to 10 years to be fully implemented
- Will save money by reducing fraud and error
How it works
Up till now, people have had to make separate claims for each benefit, which leads to confusion for all concerned. With the new UC, all claimants will receive a basic personal amount (similar to the tax free band) with additional sums for housing costs, disability, caring costs and children. Couples and single people will get different rates, as currently exists, and likewise, those under 25 will receive less. It will also be calculated closer to real time where adjustments are made, where possible, on a monthly basis rather than annually.
Work must pay
In order to help the claimant adjust to the world of work, as earnings rise, the UC will be reduced at a rate of about 65p for every £1 of wages earned, and that is higher than in current system.
If a claimant refuses to accept a reasonable or suitable job offer, or those that fail to apply for a job or attend the mandatory work activity, will have their job seekers allowance being stopped for at least three months.
In the most serious or extreme situation of repeated refusal to take work, then the benefits could be cut for as much as three years, with no access to hardship funds during that time.
Bottom line is, it pays to work.