This the Department for Work and Pensions (DWP) consultation sought views on proposed reforms to the benefits and tax credits system.
The consultation sets out seven principles for reform. These are to:
ensure that people can see that the clear rewards from taking all types of work outweigh the risks;
further incentivise and encourage households and families to move into work and to increase the amount of work they do, by improving the rewards from work at low earnings, and helping them keep more of their earnings as they work harder;
increase fairness between different groups of benefit recipients and between recipients and the taxpayer;
continue to support those most in need and reduce the numbers of workless households and children in poverty and ensure that interactions with other systems of support for basic needs are considered;
promote responsibility and positive behaviour, doing more to reward saving, strengthening the family and, in tandem with improving incentives, reinforcing conditionality;
automate processes and maximise self service, to reduce the scope for fraud, error and overpayments. This could include a responsive and immediate service that saves the taxpayer significant amounts of money and ensures compliance costs for employers, at worst, no worse than under the current system; and
ensure that the benefits and Tax Credits system is affordable in the short and longer term.
To achieve this the consultation proposes the introduction of a Universal Credit which would bring together existing income-related out-of-work benefits and tax credits into a supposed simpler, integrated system that supports people in and out of work.
This system has already been proposed in ‘Dynamic Benefits: Towards Welfare That Works’, a report produced by the Centre for Social Justice.
The consultation asks 12 questions:
What steps should the Government consider to reduce the cost of the welfare system and reduce welfare dependency and poverty?
Which aspects of the current benefits and Tax Credits system in particular
lead to the widely held view that work does not pay for benefit recipients?
To what extent is the complexity of the system deterring some people from moving into work?
To what extent is structural reform needed to deliver customer service improvements, drive down administration costs and cut the levels of error, overpayments and fraud?
Has the Government identified the right set of principles to use to guide reform?
Would an approach along the lines of the models set out in chapter 3 improve work incentives and hence help the Government to reduce costs and tackle welfare dependency and poverty? Which elements would be most successful? What other approaches should the Government consider?
Do you think we should increase the obligations on benefit claimants who
can work to take the steps necessary to seek and enter work?
Do you think that we should have a system of conditionality which aims to maximise the amount of work a person does, consistent with their personal circumstances?
If you agree that there should be greater localism what local flexibility would
be required to deliver this?
The Government is committed to delivering more affordable homes. How could reform best be implemented to ensure providers can continue to deliver the new homes we need and maintain the existing affordable homes?
What would be the best way to organise delivery of a reformed system to
achieve improvements in outcomes, customer service and efficiency?
Is there anything else you would like to tell us about the proposals in this document?
Closing date for responses
The closing date for responses was 1 October 2010.
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