Summary
Department Secretary Iain Duncan Smith intends to incentivise working life and clamp down on unnecessary benefit pay-outs in a radical reform plan.
The Department for Work and Pensions (DWP) will promote work and personal responsibility by implementing a simpler benefit system through a new universal credit.
Universal credit is an integrated working-age credit that will provide a basic allowance with additional elements for children, disability, housing and caring, as detailed in the White Paper 'Universal Credit: Welfare that Works' (Cm. 7957).
The Government intends to reintroduce the culture of work in households where it may have been absent for generations by gradually reducing financial support as working hours and earnings increase.
The changes to the current benefits system include:
- A household benefits cap to the average amount working families are entitled to.
- Child benefits withdrawal for higher rate taxpayers.
- Tax credits, housing benefit and council tax benefit control measures.
- A time limit on Employment and Support Allowance for those in the Work Related Activity Group.
Through the new universal credit system, the Department has estimated a reduction of 1.3 million in the number of workless households facing Participation Tax Rates of over 70%.
In the coming months, there will be finalised policy for the Universal Credit. DWP expect to start taking claims for the scheme from October 2013.
Found this story interesting?
Spread the news by
clicking below to add it to your bookmarking service: