The proposals to be published today should make for interesting reading:
Remind you of the situation here?“After years of piecemeal reform the current welfare system is complex and unfair,” the former Conservative Party leader will say in a speech on Friday.
For many people, taking a job leaves them no better off than a life on benefits, and this has trapped significant parts of our society in inter-generational worklessness and entrenched poverty.
“The complexity of the system also creates risk and uncertainty for the people in society who most need stability. We want to simplify the system to make it clear that work will always pay.”
Again, does it ring a bell here?The Government believes that because of the effect of “marginal tax rates” — the combination of withdrawn benefits and the tax on earned income — millions of people calculate that it is simply not worth taking a job.
One example cited by Mr Duncan Smith involves the case of a lone parent with three school-age children earning £7.50 an hour as an office administrator.
Working 23 hours a week, he says, she would have a net weekly income (including benefits and tax credits) of £345 after paying rent and council tax. However, if she were to increase her hours to 34 a week she would get only about £10 more due to a loss of benefits.
It is proposed that “entitlements” are tapered so that when earnings — net of tax and National Insurance — are not significantly above what a claimant would get on benefits, they are topped up by payments. Ministers want a system where claimants would be better off by up to 40p in every pound extra they earn.
As part of his efforts to make low-paid jobs worth taking, the Work and Pensions Secretary is looking to merge existing unemployment and in-work benefits with a “universal credit”.
Conservatives: come off benefits and we'll make work pay - Telegraph



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