The Universal Credit

[Xenia]

Well done Iain Duncan-Smith.

1. Anyone in work will be better off than anyone not.
2. More benefits can be retained despite starting work
3. Housing benefit, income support incapacity benefit of dozens of other payments all scrapped and replaced with one simple universal credit.

This is reported in the Times. No treasury comment.

Very good news.

In theory it sounds like a great idea. We shall see about the detail.

It will not be in force right away and they are still working out the details.

Some debate still going on about whether CB will be scrapped also. We'll have to wait and see.

It will be interesting to see if they regard it as a household credit or individual - if it is household then it may well worsen not improve the couples penalty.

Flippin heck I work for a charity as a Benefits Advisor....I might not be needed anymore! Hopefully stillbe needed to fill out the dozens of DLA froms which I see every week. Be interesting to see if it is really as simple as it sounds, thanks for the update.

The only link I could find without a paywall is in the DM

I would like to see more details as to what this actually means.

Some fresh thinking on the way welfare works was long overdue. Even without all the i's dotted and t's crossed this sounds like simplification - which has to be a good thing. Also sounds like the scaremongers wailing about 'the poor being hit worst' might have to eat their words.

If this 'Single Credit' does happen I think it will be a huge and positive move. Working is good for people. A simple Single Credit that encourages people to work and is easier to claim and cheaper to administer is a fab idea.

However, before we run away with the joy of it let us remember the IDS Single Credit idea is in fact only a partial step to a true Universal Benefit that everyone gets whether in work or not. The Child Benefit, NHS healthcare, Basic State Pension are all true Universal Benefits that are given regardless of means or circumstances.

True Universal Benefits remove the stigma of being on welfare and the resententment that tax payers feel to those who apparently get 'money for doing nothing'. The reasoning is simple, if everyone gets it and regardless of whether they are in work or not then no one feels resentful and there is also very little fraud. Handing out a Universal Benefit to everyone while removing all other lower rate tax bands and tax allowances for working people would be a way of introducing it quickly and cheaply.

A jolly good first step though and well done to IDS. Treasury must follow through.

I think this is a very interesting idea - however I've just heard on the radio that it is going to be very expensive and that IDS is in talks with the treasuy cos he won't be able to meet the proposed cuts to his dept.

In fact it's going to cost more.

if the nhs also keeps its ringfence then some of the other depts are really really going to feel the pinch.

I know but the Times seems to think he has won his battle with the treasury because of the way savings will be "credited".

Is this the original universal credit plan, where every adult, regardless of need, got £x a month?

"Is this the original universal credit plan, where every adult, regardless of need, got £x a month?"

If it is I can't see how it will work.

If £x is enough to live on then people who don't want to work won't even need to jump through the hoops of disability or unemployment, they'll just pocket the money and watch Jeremy Kyle.

If £x isn't enough to live on then people who do need support, the ill and the unemployed for example, won't get it and will either starve or we'll see additional benefits come back in which defeats the argument that this will be simple.

No, it's just for those on benefits and will ensure if they take jobs they are not penalised and worse off so it's a good plan. It will also simply the benefits regime hugely which is all to the good. So much time is wasted on working out who is elgible for what.

Xenai - Radio four seemed to think IDS had won his argument wiht the treasury, as it would assist in the long term.

But given the NHS is ringfenced and Education isn't to have too greater chop, hwere are the savings going to come from?

I bet the Minister for Transport is bricking it.

There is the defence budget too.

If child benefit went which would be a pity as universal benefits work well and are cheap to run and seen as fair, we might save some money. If we abolisyhed all child tax credits which are very recent things anyway perhaps coupling that with some tax reductions too to help parents and also if there is a universal benefit with a much lower amount within it for housing I imagine plenty of savings could be made.

If people also find they can go back to work and not lose much benefit gradually they may take on more work and come off benefits altogether although that would be a long term savings and not going to have much impact in a recession when there are few jobs to had at all.

have to say if it means that people going back from benefits could say end up in a 15hr a week job (loads and LOADS of them round here) and not be substantially worse off that would be great.

I've seen several jobs recently that I'd love to apply for - but they're 12-15hrs a week. If I took them I'd lose my benefits - but not qualify for WTC. So would basically be throwing myself onto the street.

Many of the jobs I've seen would be fabulous "stepping stones" to longer hours/better paid work Bit I an everyone else on benefits can't take them without throwing themselves int o financialy disaster.

I think there would still need to be some form of help wit childcare costs for those on lower incomes though. AS even with a universal credit those on a low wage are going to have to try and find childcare fees from somewhere.

Right now the leap from "benefits" to work is a truly scary one (not to mention pretty hard), especially in a single "income" household.

About time too. I'm a single parent, work part-time and some of my neighbours who don't work make so much more than I do for sitting on their backsides.

Makes a whole mockery of the system. I've been on benefits, used it as it should be, a safety blanket until you can get on your feet again. It should never be a life long cash cow for the lazy and sadly, in a lot of cases, it is.

Also, I believe that if you work under 16 hours then you don't lose benefits? I currently work 20 hours so can't vouch for this but I'm sure I read it somewhere!

Twoifbysea - you can only earn £20 a week before they start deducting it from your IS. You can't claim WTC unless you're working 16hrs a week or more.

I know that if I worked 16hrs a week my HB and CTB would drop (I wouldn't get the full amount) - so a few hours less and you'd wouldn't get the full hosuing benefit or CTB either - so would have top up out of your wages

Plus of course you wouldn't get any help with childcare as you wouldn't get the childcare element of the TC's.

actually no - according to entitled to 15hrs a week I'd still get full HB and CTB.

But I'd get no help with childcare costs at all.

1796 working 15hrs (including wages)
1709 - not working at all
2102 - working 16hrs a week (including wages - but excluding the childcare element of TC's)

Having looked into this a bit more I can see it will not really work as a Universal Benefit should. The idea of a Universal Benefit and as I think IDS originally wanted it was to provide a sum of money everyone got regardless of whether you worked or not. Crucially a Universal Benefit does not get taken away if you work.

That is not what will happen in the current IDS proposal for a Single Credit. What seems to be being floated is the idea that a Single Credit will be paid and once someone starts working they will get to keep some of the benefit but that it will be gradually tapered down the longer they work.

Unfortunately, it stll means people on a Single Credit will eventually end up worse off by working than not working. The biggest disincentive to work will stil exist. People can and will figure out quite quickly exactly how much Single Credit they will get if they dont work and they know how much they will get paid and over what timescale the Single Credit will be gradually reduced. They will therefore only have an incentive to work for as long as the salary plus tapered benefit is greater than just sitting at home on Single Credit.

It will lead to a lot of people deliberately aking part time short term contracts with deliberate periods of unemployment to get the Single Credit back up to the maximum level. This already happens to some extent now with people allowed to work a maximum 15 hr week before benefits are cut.

In effect, I think there is a real risk that the Single Credit will just be a relabelling and rejigging of what happens now with a bit of admin cost saving nd some reduction in fraud. Employers will be the biggest beneficiary as the Single Benefit will just be a subsidy to a living wage while someone works on a short term contract.

This initiative is unfortunately likely to become an underfunded half cut idea that will not deliver the desired outcome and is massive missed opportunity. Worse still, politically it will be labelled as a Tory smash and grab on people on benefits and low paid people.

I don't think IDS had ever proposed a proper universal benefit although I would support one. Probably too radical for now but this will be a good simplification and presuymably it is also like to include a cut in benefits and tax credits and the like too which also would incentivise people to work. Housing benefit could be included in it too.

If it were changed to a totally universal credit including state pensions and the like it would certainly be a better idea.

I like the idea of a universal benefit. It's a shame that IDS's plans don't include this but it seems like a step in the right direction.

I'm scared by teh not knowing, if that makes sense?

I'd at least like to know the timescales.

We have got plans to get us both in work anyway that will take a few years (most know our circs but basically, 4 chidlren of which 2 have autism; DH was made redudnant and is retraining whilst making a small amount self employed. Desperately trying to avoid LA housing as social services adament we need a 4 bed whcih emans we would need many eyars wait and that in a homeless accomodation whcih the boys could simply not handle- ds1 for example already has eating disorders for which he receives treatment and would not eat food from a shared kitchen).

We've tried to work out if I could start the social worker training I am due to do a eyar early but we can't, as college funding won;t cover nanny costs (will covere nursery or CM) and no other chidlcare would allow DH and I to both study as we would both be on courses that go to 8pm and even beyond- just how theya re scheduled. When dh qualifies he will work from home to allow me to train if that amkes sense? juggled but productive.

So with no chidlcare that stillr emains undoable: ds1 attacks people so can;t go to sahred chidlcare.

The options we are left with are hope it takes longer to be implemented than we need to finish (I mean, it's not as if we chose any of this- a bit of luck would not go amiss!); put DS1 in a foster placement so I can do it ( would hurt as much as anyone else giving their child up, and aggression doesn;t eman he doesn;t ahve an understanding- average IQ etc, it would hurt him).

The other is for DH to get teh business big enough to emply me. it's not a field I have any interest in whasoever but if ti kept us going.... the main issue atm is that our shop launch which was due to be in July ahs been held up as our main supplier has taken our money and refused to supply any stock ('my child is ill') in months so we are taking court action and have a hold up.

So we are trying to find ways to manage this but really need the facts about it to be able to do so. If there's one thing I hate it's uncertainty.

I did of course ask the boys to stop being autistic but that's seeming to be a no go. Bit of a worry really; apart from the effect on us as a wider family any cuts to long term dependency are going to make ds3's life worse, that really is simple, it's not as if he has a choice!

But, we shall see. We have to sign or not the house l;ease this week for the next 18 months and we will do it and pray. I just remember the days when losing ajob emant you could run out and sort anohter and we didn;t have so many unasked for barreirs to overcome becuase that takes time. And it 's not as if I am happy being a SAHM either- not so bad atm with ds4 but he starts school nursery next year and I will be so bored!

Also have a week to decide whether I shoudl pull out from my uni course and save the costs; it's supposed to be to get me onto the social work course but it''s a legal commitment once I start paying and if this will come in before I findsih in June we'd be lumbered IYSWIM.

"Crucially a Universal Benefit does not get taken away if you work."

I'm still curious to see how you think this should work. Is it enough to live on? Un which case people will still be able to choose not to work without any of the proof that we need at the moment. Or is it not enough to live on? In which case there will have to be some extra situation dependent benefits, which shoots the argument about this being simpler in the foot.

"They will therefore only have an incentive to work for as long as the salary plus tapered benefit is greater than just sitting at home on Single Credit."

Well allegedly IDS's plans are that working will always pay more than benefit. So salary plus tapered single credit will always be more than single credit. So that situation isn't going to arise.