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NEW: Dynamic Benefits; Towards Welfare that Works
16 Sep 2009
The Centre for Social Justice have released their Dynamic Benefits report which aims for a radical recasting of state support for the jobless and low-paid, to enable 600,000 households to come off welfare dependency and into work, boost the incomes of the lowest paid by nearly £5 billion and help move more than 200,000 children out of poverty.
Dynamic benefits calls for:
- replacement of 51 separate working age benefits with just two
- Universal Work Credit would replace out of work benefits (JSA, IB, ESA, and IS), (there would be a requirement to participate in welfare to work programmes in order to 'earn' it )
- Universal Life Credit would replace more general support benefits (HB, CTB, DLA, WTC, and CTC).
- Tapered benefits (gradually reduced as hours are increased) following a bigger Earnings Disregard (which we are campaigning for)
CSJ claim these proposals would remove the benefit risk of, and barriers to job entry and ultimately reduce the complexity of the benefits system by making it easier to understand and less stressful.
The authors claim that the proposal would cost money in the short term (£3.7bn a year) but would be self-financing in the longer term.
We support the approach Dynamic Benefits has taken as we have been pushing for a tapered system to remove the need for informal work. If a future government was to consider implementing the Dynamic Benefits model they would need to take into account the numbers currently working informally and how the JCP, Community and Voluntary groups would be able to offer the right support for people to go legit. This would include working with those employers and ensuring that employees were secured in doing so.
In the meantime, as Dynamic benefits is a complex (and expensive) model it is clear that it would be a period of time before this was implemented. Therefore future governments should seriously consider INCREASING THE CURRENT EARNINGS DISREGARD FOR JSA FROM £5 TO £50. This is a stepping stone for people and for government and is an indicator that parties have gotten the right direction for welfare reform in the lead up to an election!
Have a read of our blog piece for more information and leave your thoughts on Dynamic Benefits below
You can read a blog by Indusdelta of a simplified assessment of Dynamic Benefits here with some good questions and answers!