Universal Credit to simplify the Welfare System

In the most significant reform of the welfare system to be proposed in many years the new Coalition Government has unveiled its plans for the introduction of a new Universal Credit.  It is claimed that the Universal Credit will make the benefits system simpler and ensure that everyone will be better off in work than on benefits.

The Universal Credit would bring together the existing out-of-work benefits and tax credits into a simpler, integrated system to support people in and out of work.  It is proposed that the new Universal Credit will provide improved incentives to work with people entering employment seeing no reduction in their Universal Credit until they earn over a certain threshold and would also include incentives to earn more.

These reforms will be introduced in a White Paper in the Autumn and then put to Parliament in a Welfare Reform Bill next year.

There is a strong case for the simplification of the benefits and tax credits systems.  Over the last year Citizens Advice in Northern Ireland has helped people with over 179,000 benefit and tax credits issues and many of the those who come to CAB are confused about the benefits system and their rightful entitlements.  Others are required to make frequent contacts with the benefits and tax credits systems due to ongoing administration issues, delays in benefit payments or to appeal decisions.  One Universal Credit could help to remove some of these issues as well as the problems that many experience with the interactions between various existing benefits and tax credits.

We understand the Government’s need to reduce costs and welcome these proposals to simplify the system. Equally, there is a need to recognise that some people will always require support through the benefits system.  Citizens Advice believes that it is crucial to ensure that the most vulnerable and disadvantaged people in our society are protected in any reform the welfare system.  This is vital in making real progress towards reducing poverty.  Citizens Advice is already concerned that measures announced by the Chancellor in his Emergency Budget in June 2010 will do little to reduce poverty and will in actual fact push more people and children into poverty. 

Citizens Advice awaits more detail on these proposals and how the introduction of the Universal Credit will affect different groups of people.  We believe that the detail of the proposals should be tested against a series of case studies to determine their likely impact and assess the extent to which those who are vulnerable or in need are adequately protected.

Citizens Advice also echoes the Minister for Social Development’s comments that Northern Ireland should be given special status and that the Government should take into account the specific circumstances that exist here, namely higher rates of deprivation and the legacy of the Troubles, when considering these welfare reforms.

To listen again to Lucy Cochrane’s comments on the proposed introduction of a Universal Credit on Good Morning Ulster this morning click here (0:36 mins).