Welfare Reform
Many people on benefits perceive the financial risks of moving into work as just too great. For some groups the gains to work, particularly at low hours, are small, and any gain can easily be wiped out altogether by in-work costs such as transport. The Coalition Government has identified two key problems with the current system:
- work incentives are poor, and
- the system is too complex.
We are reforming the system to help people to move into and progress in work, while supporting the most vulnerable.
Reforming the benefit system aims to make it fairer, more affordable and better able to tackle poverty, worklessness and welfare dependency. We made the commitment to overhaul the benefit system to promote work and personal responsibility.
Welfare Reform Act 2012
On 8 March the Welfare Reform Act 2012 received Royal Assent. The Act introduces a wide range of reforms to make the benefits and tax credits system fairer and simpler by:
- creating the right incentives to get more people into work by ensuring work always pays
- protecting the most vulnerable in our society
- delivering fairness to those claiming benefit and to the tax payer.
Personal Independence Payment
A key measure in the Welfare Reform Act is to replace Disability Living Allowance for eligible working age people (aged 16 to 64) with a new benefit, Personal Independence Payment, from April 2013. Find the latest information on policy developments and the draft assessment criteria in the Personal Independence Payment pages.
Universal Credit
Universal Credit is a major feature of the Welfare Reform Act. It aims to simplify the current benefits system to make work pay. Key decisions on the detailed policy for Universal Credit are being made over the coming months.
The Government has also published its response to the consultation document “21st Century Welfare” which spelt out the problems of poor work incentives and complexity in the current benefits and Tax Credits systems. Over 1,600 responses were received. There was general agreement on the need for reform with strong support for our objectives of streamlining the system and making work pay.
