The changes could significantly change families’ experiences of the welfare system Welfare overhaul plans ‘imminent’
The changes could significantly change families’ experiences of the welfare system Details of a major overhaul of the benefits system will be published “imminently” in a government bill, a committee of MPs has heard.
This will outline exactly which benefits and tax credits could be replaced by the proposed Universal Credit system.
Work Secretary Iain Duncan Smith has been taking questions from the Work and Pensions Committee.
If given the go-ahead, the system will start for new claimants in 2013.
However, it will take 10 years for the changes to come into effect fully.
The government is planning to simplify the UK benefits system, claiming that universal credits would “make work pay”.
It wants to consolidate the existing 30 or more work-related benefits – such as jobseeker’s allowance, housing benefit, child tax credit, working tax credit, income support and employment support allowance – into a single universal payment.
Universal Credit – Key pointsLow paid workers to keep more of what they earnReplaces working tax credit, child tax credit, housing benefit, income support, jobseeker’s allowance and income-related allowancesBenefits cut for three months if job offers refused – and for up to three years in the most “extreme” casesPeople can move in and out of work without losing benefitsStarts for new claimants in 2013Will take up to 10 years to come fully into effect£2.1bn start up costsMeant to save money in the long run through reducing fraud and errorQ&A: Benefits overhaul A basic guide to benefits
But there has been debate over exactly which of the dozens of benefits will fall under the umbrella of the Universal Credit system.
Mr Duncan Smith told the committee that the bill would outline whether benefits such as carer’s allowance would be included, adding that the publication of these details was imminent.
“The current system is a pretty near nightmare to negotiate,” he said.
“We are pretty well ready [to publish the bill].”
He added that this would include details about carers who currently faced losing their allowance if their earnings reached more than £100 a week.
Mr Duncan Smith also said he wanted families to decide themselves exactly where the single universal payment would be made – such as into a joint bank account, or to a man or woman in a household.
The plan was for a monthly payment, as this was similar what happens in a workplace. Many benefits are paid every two weeks, at present.
The government has insisted that nobody will experience a reduction in the benefit money they receive as a result of the introduction of the Universal Credit.
But a recent report by the Institute of Fiscal Studies (IFS) suggested that 1.4 million families would lose money as a result of the government’s reforms. It also calculated that the changes would help 2.5 million households.
Under the plans, there would be stricter rules for people losing their payments if they refused a job, with those who do so three times losing their benefits for three months.
Part of the committee’s discussion was how job centre staff would be able to find out all of the key details that would affect people’s benefit claims.
Some of the information from new claimants will be entered online, if they are able to access the internet, before a face-to-face interview with an adviser.
People could also input details on terminals at benefits centres. A review of online use is being conducted among existing benefits claimants at present.
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