WGPlus (Archive)

An alternative option for the Chancellor to ‘think about’?

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.
Researched Links:

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

IFS:  An assessment of the potential compensation provided by the new ‘National Living Wage’ for the personal tax & benefit measures announced for implementation in the current parliament

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

Be honest – could you raise a family on the Minimum Wage?

But are all tenants capable of ‘financial management’?

On-demand webinar: How AI is helping Telford and Wrekin council answer 95% of queries