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IDS calls for radical welfare reform

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A range of welfare benefits could be brought together as a single payment distributed at different local rates across the UK, work and pensions secretary Iain Duncan Smith has announced.

The Department for Work and Pensions set out proposals for a “radical overhaul” of benefits in an attempt to encourage people into work and create a more localised system.

Around 50 separate benefits could be brought together as a single payment that would taper off as claimants move into employment.

Mr Duncan Smith said: “A system developed to help the most vulnerable and support people in times of need is trapping people in a cycle of dependency. We now have children growing up in households where neither parent works and where the only future is one stuck on benefits.

“This is a tragedy that we must bring to an end.”

Speaking on Radio 4’s Today programme, Mr Duncan Smith said he wanted to see a more “humanised” approach where payments reflected local circumstances.

He added: “We as a government say we want to see more discharged at a local level to get completely away from this top-down centralised approach.”

Mr Duncan criticised current benefit payments that taper off at different rates as a “complex maths equation that very few people can work out”.

He claimed the new system would also be more accurate than tax credits as benefits would be paid in “real time”. He said the Treasury had paid up to £11bn in overpayments under the old system.

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Readers' comments (1)

  • When Tax Credits were introduced I recall a highly placed person within HMRC telling a conference of LA Benefit Managers that working out Tax Credits was so simple that a monkey could do it.
    Yet in 2008 the Public Accounts Committee said
    HMRC was failing to repair the tax credits system with fraud and error continuing to lose the taxpayer £1bn a year.
    Despite repeated criticism of Tax Credits HMRC had still not put any targets in place to bring the level of fraud down.
    £65bn had been paid in tax credits since 2003. Of that, £6bn was overpaid in the first three years. By the end of 2007 HMRC had collected £2bn of the overpayment but written off £700m. Of the £3.3bn still to be collected, PAC said £1.6bn was unlikely to be recovered.
    Let us hope that if benefits and Tax Credits are merged that they are administered by those who are generally better at it - Local Authorities.

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