The Coalition government pledged to make work pay, and to that end, has undertaken a massive revamp of the Welfare regulations. The overiding aim is to ensure that people chose to work rather than stay on benefits, which until now has been generous enough to enable some to live on it.
The Welfare Reform Bill was first introduced to Parliament on 16 February 2011, and is the biggest change in the Welfare system in more than 60 years. It seeks to make the benefits and tax credit systems fairer and simpler to administer by:
- creating the right incentives to get more people into work
- protecting the most vulnerable in society
- delivering fairness to those claiming benefit and to the taxpayer
The changes are expected to take place over time, but the main strategies for reducing the welfare cost to the country are easily identified.
Main Strategies
Whilst the Welfare Reform Bill itself is about 175 pages in length, together with Explanatory notes which is another 108 page document, its main points are:
- introduction of a Universal Credit, to replace the working age benefits and Tax credits, to ensure that work always pays
- making changes that ensure that all claimants understand the requirements they need to meet in return for receiving benefits
- implementing new sanctions and punishments for fraudulent claims
- making changes that aims to ensure that Employment Support Allowance and Housing Benefit are targeted to those who need them most, and that no household receives more in benefits than the average after tax earnings of working households
- stopping abuse of the Social Fund system and empowering local authorities to target its use
- introduction of the Personal Independence payment as a reform of the Disability Living Allowance, to meet the needs of disabled people
- reforming child maintenance to make it easier for parents to make more flexible private maintenance arrangements, thereby putting the interest of the child first
The changes will start in 2011-12, and take place over an extended period, ending in 2017-18 when it is expected that the transition to Universal Credit will be completed.
Impact Assessment
The government has indicated that it will try to minimise the impact of the Welfare Reforms on claimants and those that have to administer the reforms. How successful that will be remains to be seen.
This is a far-reaching and ambitious program, being implemented at a time when the economy is in a poor shape, public money is in short supply, and work is hard to come by.
The Work and Pensions Secretary Iain Duncan Smith said:
"Our reforms will end the absurdity of a system where people too often get rewarded for doing the wrong thing, and those who strive to do the best by their families get penalised". "The publication of the Welfare Reform Bill will put work, rather than hand-outs, at the heart of the welfare system."
Bravo! With over 5 million people in receipt of one or more benefits, this is quite a challenge.
There are critics of the government plans, not least the Trades Unions organisations. But, the move also has its supporters, who claim that the Welfare Reform Bill offers an opportunity to overhaul a dysfunctional and chaotic benefits system that locks people in poverty and stifles aspiration.
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