Benefits system overhaul 'to make work pay'

The biggest welfare shake-up since the 1940s will make going out to work pay and see benefit cuts for those who refuse to take jobs, ministers say.

Work Secretary Iain Duncan Smith plans to bring in a single Universal Credit to replace work-related benefits.

Claimants moving into work will keep more of their income than now, but face losing benefits if they refuse a job.

Labour said it backed moves to make work pay but warned about the possible lack of available jobs.

The new system will mostly be administered through the internet, with people expected to make claims online and check their payments like they would an online bank account - even though an estimated 1.5 million unemployed people do not currently have internet access, according to government figures. The DWP says a "minority" of cases will still be dealt with face-to-face.

Unveiling his white paper on welfare reform in the Commons, Mr Duncan Smith said the current system was hugely complex and costly to administer, vulnerable to fraud, and deterred people from finding a job or extending their hours.
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Mr Duncan Smith, who campaigned for root-and-branch welfare reform while in opposition, said millions of people had become "trapped" on benefits and long-term unemployment had become entrenched in communities where generations of families had not worked for years.

There will be tougher penalties for people fit to work but unwilling to do so. A sliding scale of sanctions will see those refusing work on three occasions having their benefits taken away for three months. Those repeatedly convicted of benefit fraud could have their benefits stopped for three years.

Mr Duncan Smith insists no one will experience a reduction in the benefit money they receive as a result of the introduction of the Universal Credit.

Universal Credit claimants will receive a basic personal amount with additional sums for disability, caring costs, housing costs and children, with single people and couples getting different rates and, as now, the under 25s receiving less. Unlike now, people will not have to claim separately for different benefits.

**BBC website**