Universal Credit benefit details 'imminent'

Family The changes could significantly change families' experiences of the welfare system

Details of a major overhaul of the benefits system will be published "imminently" in a government bill, a committee of MPs has heard.

This will outline exactly which benefits and tax credits could be replaced by the proposed Universal Credit system.

Work Secretary Iain Duncan Smith has been taking questions from the Work and Pensions Committee.

If given the go-ahead, the system will start for new claimants in 2013.

However, it will take 10 years for the changes to come into effect fully.

Simplification

The government is planning to simplify the UK benefits system, claiming that universal credits would "make work pay".

It wants to consolidate the existing 30 or more work-related benefits - such as jobseeker's allowance, housing benefit, child tax credit, working tax credit, income support and employment support allowance - into a single universal payment.

Universal Credit - Key points

  • Low paid workers to keep more of what they earn
  • Replaces working tax credit, child tax credit, housing benefit, income support, jobseeker's allowance and income-related allowances
  • Benefits cut for three months if job offers refused - and for up to three years in the most "extreme" cases
  • People can move in and out of work without losing benefits
  • Starts for new claimants in 2013
  • Will take up to 10 years to come fully into effect
  • £2.1bn start up costs
  • Meant to save money in the long run through reducing fraud and error

But there has been debate over exactly which of the dozens of benefits will fall under the umbrella of the Universal Credit system.

Mr Duncan Smith told the committee that the bill would outline whether benefits such as carer's allowance would be included, adding that the publication of these details was imminent.

"The current system is a pretty near nightmare to negotiate," he said.

"We are pretty well ready [to publish the bill]."

He added that this would include details about carers who currently faced losing their allowance if their earnings reached more than £100 a week.

Mr Duncan Smith also said he wanted families to decide themselves exactly where the single universal payment would be made - such as into a joint bank account, or to a man or woman in a household.

The plan was for a monthly payment, as this was similar what happens in a workplace. Many benefits are paid every two weeks, at present.

Winners and losers

The government has insisted that nobody will experience a reduction in the benefit money they receive as a result of the introduction of the Universal Credit.

A recent report by the Institute of Fiscal Studies (IFS) suggested that 1.4 million families would notionally lose money as a result of the government's reforms. But it also calculated that the changes would help 2.5 million households.

It said that those on lower incomes would be most likely to benefit.

But some charities have raised concerns about the planned changes.

"There is a real danger that lone parents with young children will not be able to work their way out of poverty as is possible under the present benefits and tax credits system," said Citizens Advice chief executive Gillian Guy.

Under the plans, there would be stricter rules for people losing their payments if they refused a job, with those who do so three times losing their benefits for three years.

Part of the committee's discussion was how job centre staff would be able to find out all of the key details that would affect people's benefit claims.

Some of the information from new claimants will be entered online, if they are able to access the internet, before a face-to-face interview with an adviser.

People could also input details on terminals at benefits centres. A review of online use is being conducted among existing benefits claimants at present.

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.