Welfare And Benefits Flashcards
What are contributory benefits?
Benefits paid on the basis of previous contributions. Pay in when you are young healthy and in work and draw out when you are old sick or unemployed.
National Insurance introduced by liberal gov in 1911 is the obvious example. Old age pension is dependent on NI contributions, you get higher Jobseeker’s Allowance if you have paid NI
What are Non-contributory benefits?
These are paid on the basis of need, not dependent on previous contributions.
Some of these benefits, such as Jobseeker allowance and Housing benefit are dependent on income and claimants are required to undergo a ‘’means test” to ensure they need the benefit
Some universal benefits are paid regardless of income, for example winter fuel payments and free TV license for the elderly. Child benefit used to be universal but coalition gov introduced restrictions on people earning over 50k
How much do benefits cost?
Very expensive
Social protection - mainly pensions and benefits largest items of public expenditure, costing about £256bn a year - about 30% of public spending
What are other welfare benefits?
Unemployment benefits
Child benefits
Housing benefit
Child and working tax credits
Disability benefits
What will happen as the population ages and life expectancy increases?
It will get more expensive
What do some people argue about universal benefits?
That universal benefits not dependent on contributions weakens the idea that people have a stake in the system
It is no longer a temporary safety net - people remain on benefits for many years, even in times of economic prosperity
Some argue that handing out benefits without concoctions acts as a disincentive to work, promotes idleness and traps people in poverty
When people on benefits enter employment what do they face?
Very high marginal tax rates, this means they pay a large proportion of each extra pound they earn in tax and lost benefits - plus they have to for child care, communising costs etc
What is Jobseeker’s Allowance
Paid to adults working fewer than 16 hours a week. Higher payment for those with significant NI contributions
What is Income support?
Non-contributory benefit for those on low income and not in full-time employment
Employment and Support Allowance and Disability Living Allowance?
Paid to sick and disabled. Paid in different rates depending on disability.
What did Coalition gov introduce that proved controversial?
Introduced Work Capability Assessments
What is Welfare Reform Act 2012
In 2012 Coalition gov introduced radical reforms that will be rolled out gradually through 2017 (deadline pushed back) at a cost of 2bn
What is idea of Welfare Reform Act 2012?
Idea is to simplify a complex system and ensure that work pays and remove disincentives to work
Idea is that claimants will be able to retain more of their benefit as they move into work, removing the problem of high marginal tax rates
What is the “keystone” of the 2012 act?
Universal Credit
What will be the 6 other benefits Universal Credit will replace
Means tested part of Jobseekers Allowance
Means tested part of Employment and Support Allowance
Income Support
Child Tax Credits
Working Tax Credits
Housing Benefit - rent element only
