WGPlus (Archive)
| An alternative option for the Chancellor to ‘think about’? |
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The government should replace tax credits, Jobseeker’s Allowance, the Universal Credit, and most other major welfare payments with a single Negative Income Tax (NIT), according to a new report (Free Market Welfare: The case for a Negative Income Tax) from the Adam Smith Institute. This NIT would act as a minimum income guarantee for all British citizens and be tapered away as people’s earnings rise through work. Britain’s existing welfare programmes are ‘costly to administer, complicated to navigate, & designed for a postwar-style labour market that no longer exists’, and the paper argues abolishing the existing system would save the DWP up to £6bn in administrative costs. The payment scheme is structured so that the claimant is always better off working more hours or taking higher wages than in their current position. These payments would be automatic for workers within the PAYE system. |
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ASI: Reform tax credits with a Negative Income Tax, says new report IEA - Welfare state 'not fit for purpose' and public unable to influence government, poll reveals Government must do more to combat benefits fraud & error Universal Credit now available in over 60% of jobcentres in the UK ScotGov: Families punished by cuts IPPR: £1bn shortfall in Government childcare extension pledge TUC: Number of families with problem debt up by more than a quarter since 2012 Minimum wage increase must be backed by pay bargaining & job security rights, says TUC 94% increase in online tax credits renewals Universal Credit reform could lift over 500,000 children out of poverty JRF: Families struggle to close budget gap despite a pause in the rise of the cost of living IEA: The focus of welfare reform must be broader for substantial savings IFS: Benefit cuts: where might they come from? Osborne could have gone for the Finnish solution |
