30/07/2010

'Radical' Benefits Reforms On Way

'Radical' proposals to reform the benefits system are being unveiled today by Work and Pensions Secretary Iain Duncan Smith.

The Minister is announcing plans to simplify the system, which could include combining benefits and tax credits, in order to ensure that people are always better off in work, rather than on benefits.

The options being considered by Mr Duncan-Smith included combining elements of the current income-related benefits and tax credit systems, combining the total number of jobless benefits into one 'universal credit' and supplementing monthly household earnings through credit payments, which would reflect circumstances such as children and disability.

Mr Duncan Smith said that five million people had become "abandoned" on out-of-work benefits, with nearly 1.5 million being on benefits for nine or more of the last ten years.
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He also criticised the current system as "complex and unfair", saying that it left people "entrenched" in welfare and poverty.

However, Labour has questioned how much this new system would cost to get started. TUC General Secretary Brendan Barber also questioned the new proposals. He said: "While the aim behind this certainly has merit, minister have a big problem. You can only make work pay in two ways.

"Either you make those who are out of work poorer, yet we already have jobless benefit levels way below those when Mrs Thatcher was in power. Or you can boost income in work either through more generous benefits or a higher minimum wage.

"The first should be morally unacceptable, while the Treasury will not allow the second. Iain Duncan-Smith is trapped in the Catch 22 of welfare reform."

A White Paper detailing the government's preferred proposals is due to be published in the autumn.

(KMcA)

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