Friday 28 May 2010

Benefit Reform

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The Department for Work and Pensions has admitted that the benefits system was ‘breaking’ and in need of urgent attention. I think we all knew that!

The department has disclosed that almost five million people were on unemployment benefits, 1.4 million of whom had been receiving support for nine or more of the last ten years and that, in addition, 1.4 million under-25s were neither working nor in full-time education.

Nearly 700,000 families receive more than £15,000 a year in benefits and around 50,000 households receive annual benefits of more than £26,000, As this last is more than the average pre-tax wage for full-time workers, it is no wonder that so many benefit recipients are reluctant to get out and seek work. The annual cost of all this is £13 billions.

When you also learn that housing benefit has risen by 40 per cent under Labour to more than £14 billion, with some families receiving an absurd £93,000 a year, you have to agree with the new Work and Pensions Secretary, Iain Duncan Smith, that something needs to be done. So the government proposes to introduce a new ‘work programme’ which will offer help to get the unemployed into work – with sanctions if they refuse.

The 2.6 million people on Incapacity Benefit will also be subject to new assessments of their ability to work. It is interesting that since new assessment standards were introduced at the end of 2008, nine out of ten people who claimed to be too sick to work were found to be actually fit to take a job!

It must be clear to everyone that the country cannot afford rising benefit costs and that those who are able to work should be encouraged to do so when work is available. At the same time, those who do attempt to return to work should somehow not be penalised financially by doing so.

It will be a difficult thing to arrange and the draft proposals have already drawn forth angry protest. On the other hand, the former Work and Pensions Secretary, John Hutton, welcomed the ‘exciting’ reform plans.

And he should know!
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