Benefit claims system to be reformed
Benefits and credits are to be rolled into one single payment for claimants under plans unveiled today for the most radical shake-up of Britain's welfare system in decades.
Benefits and credits are to be rolled into one single payment for claimants under plans unveiled today for the most radical shake-up of Britain's welfare system in decades.
It is one of several proposals being trumpeted by the Government in a blueprint called 21st Century Welfare to get 1.4 million people on long-term benefits back to work.
Work and Pensions Secretary Iain Duncan Smith said he wants an end to the culture of dependency where too many are "trapped" on benefits and "entrenched in poverty".
He wants a simpler welfare system in which work pays by providing incentives for the unemployed to swap life on benefits for work.
The single universal benefit would be tailored to individual needs and replace the 51 benefits currently available to the unemployed.
Those who find work would continue to get the hand-out which would be gradually reduced and then stopped as people earn more.
Payments would also take into account claimants' circumstances such as children and housing needs.
The benefit bill currently stands at £87 billion including tax credits.
The number of working-age people on out-of-work benefits has reached five million, up 500,000 in a year.
Mr Duncan Smith said the reforms would ensure everyone who takes a job would be better off than they were on benefits.
At present, those on the dole are losing 90p or more out of every £1 they earn in tax and lost benefits.
He is considering plans to guarantee they could keep 40p out of each £1 they earn.
"The key thing is to make work pay at a higher rate than being on benefits.
"This complex system means many people don't take work when it is available because they are scared they will lose too many of their benefits. Our reforms should also ensure the system is easier for individuals to understand and will reduce the high costs of fraud and error," he said.
Shadow work and pensions secretary Yvette Cooper said the news was "a sham to cover the fact that the Budget actually cut work incentives, cut jobs and cut help for people to return to work".
By London reporter Sunita Patel