proposals for changes to unemployment benefit system
Iain Duncan Smith, the Work and Pensions Secretary has outlined
proposals that could see the current system of unemployment
benefits scrapped and replaced with a totally new system based on
income tax rebates. The idea is part of the government's plan to
make sure that people can earn more by working than by staying on
benefits.
Under this proposal, the current system of benefits and tax
credits that are paid to jobseekers and to people in low paid jobs
would be replaced by a system of income tax rebates. Tax credits,
child benefit, income support, housing benefit, incapacity benefit
and job seekers allowance would all be replaced by tax rebates,
which would decrease as pay increases. Benefits for pensioners,
disabled people and carers would however remain unchanged.
This idea is one of a number of proposals that aim to ensure
that people are encouraged to go back to work wherever possible. It
also aims to simplify the current system which has been accused of
being ridiculously complicated.
The reforms are likely to cost in the region of £2 - 3
billion.
