A SINGLE WORKING AGE BENEFIT
330. Freud's inclination towards a single working
age benefit has yet to be backed up by the robust modelling which
he suggests is required before moving forward. The lack of any
substantial research into the feasibility of introducing a single
benefit to the UK was reflected in the fact that witnesses were
generally impartial on the subject; one exception to this was
the Institute of Public Policy Research (IPPR). IPPR welcomed
Freud's report and suggested that in addition to the advantages
he outlined, a single working age benefit would lead to:
"greater transparency (leading to greater understanding
of, and support for, the benefits system), greater administrative
simplicity, the end of a system of categorising people according
to a single characteristic such as lone parenthood and the introduction
of a system centred on the citizen as an individual and greater
alignment of the benefits systems with employment support options."[357]
331. Like Freud, IPPR recommended that DWP undertake
or commission detailed modelling work to explore the likely impacts
of creating a single working age benefit that combines Jobseeker's
Allowance, Incapacity Benefit/Employment Support Allowance and
Income Support.
332. We also received evidence from the Citizens
Income Trust, with its proposals for "an unconditional, automatic
and nonwithdrawable payment to each individual as a right of citizenship".[358]
333. Some witnesses did comment on the principle
of a single benefit and were sceptical that a single benefit would
remain simple in the face of complex contingencies. Michael Fothergill
of OSW commented,
"It really worries me as to whether a Single
Working Age Benefit would actually be that simple. ... I was talking
a bit earlier about the Employment and Support Allowance ... Within
one benefit there seem to be all these different rates and complexity,
depending on what work activity you get involved in, then possibly
further sanctions beyond and below the holding rate as well.
Often they start off by looking simple but end up being relatively
complex."[359]
334. Steve Broach of Every Disabled Child Matters
commented:
"If you took our families as an example, a single
working age benefit would need a disabled child premium, the disabled
child premium would probably have to be differentiated, perhaps
into a higher, middle and lower rate, and then you have basically
replicated Disability Living Allowance [...] so you might spend
an awful lot of time and money replicating the existing system
when it came down to brass tacks and to delivery."[360]
335. For the most part witnesses cautioned against
the execution of bold reform too quickly because the details of
it remained unclear. John Wheatley from Citizens Advice said:
"It is such a 'big bang' change that I think
all groups would want to see some analysis of the impact before
rushing to judgement. It is an attractive notion that you have
a single benefit with overlaying things on, but it does mean scrapping
what we have now and putting something else in place. It is much
easier to contemplate incremental changes, and there are plenty
of things which could and should be done to simplify in the short
term." [361]
336. Janet Allbeson from One Parent Families argued
that in the absence of more concrete details to such a proposal,
it was difficult to understand how a single working age benefit
would operate in reality, particularly in terms of accommodating
wider benefits such as Housing Benefit and Tax Credit:
"I must admit to being really perhaps slightly
head-scratching about what the single working age benefit actually
is, in that I cannot quite work out where it sits within Housing
Benefit, Council Tax Benefit. Are they still going to be there?
What about the Working Tax Credits, Child Tax Credits? A lot
of the attempts to simplify are someone sitting down, looking
at a piece of paper and saying 'Gosh, this looks terribly complicated.
Let's just make it simpler' without thinking through the implications."[362]
337. However, One Parent Families added that "unless
resources are found for a more radical and ambitious simplification
agenda, it is unlikely that the complex workings of the present
system will be improved from the point of view of lone parents."
[363]
Winners and Losers
338. The hesitancy of witnesses about the single
working age benefit was also fuelled by concerns that such wholesale
reform of the benefit system could lead to injustice and a large
proportion of losers.
339. Referring particularly to the single working
age benefit, Paul Treloar, from Disability Alliance told us:
"We would want some very robust modelling of
winners and losers in terms of particularly disabled working age
adults, because they are one group who have been moving more deeply
into relative poverty over the last ten years compared to people
with children and compared to older people. There are issues
around universality of disability benefits which we think could
help to bridge some of that gap. So we are not against it in
principle but we would be, as I say, very keen to see some robust
modelling to make sure that the actual effects on disabled working
age adults were taken care of."[364]
340. The concerns of witnesses about the winners
and losers that a single working age benefit might create and
about the lack of coherent thinking around the concept has been
picked up by the Institute for Public Policy Research (IPPR).
IPPR has recently examined the case for a single working age
benefit and concluded that it may provide "the best prospect
of achieving a benefit system that actively supports welfare-to-work
policy":[365]
"The single benefit would replace JSA, IB and
IS and could also incorporate Carer's Allowance. There is a range
of advantages to this vision of a single working-age benefit that
deal with some of the problems of the current benefit system (and
particularly the links between them) that certainly exist and
that look likely to continue after the introduction of the ESA.
The problems associated with moving between benefits would disappear.
There would be no risk to a person's benefit if they tried going
into work because the benefit would be the same before and after
a period of work. There would therefore be no need for the little
understood 'linking rules', which currently allow people to return
to their former rate of benefit if they cease working. It could
also be expected that the stigma and possibility of subsequent
discrimination that have been associated with the notion of disability
benefits would be reduced. Importantly, there would be no financial
gain of claiming one benefit over another or of remaining on benefit
for a longer period. Overall, a single working-age benefit would
not only be less complex and easier to understand than the current
array of working-age benefits, it would be easier to administer
too."[366]
341. IPPR developed further ideas around the gateway,
eligibility rules and the level at which the benefit would be
set.
342. The Institute
of Public Policy Research has set out one option for the radical
reform of the benefits system. In the absence of a strong Departmental
vision we have endeavoured to spark a debate by developing a suggested
outline for a simplified Single Working Age Benefit, which is
attached at Annex A. This sketches out an alternative option
to that proposed by IPPR by extending the single working age benefit
to provide in-work support, thus replacing tax credits. We recommend
that the Government study these proposals and respond setting
out which elements it agrees with and, most importantly, what
alternatives it would propose for those facets it does not accept.
We accept that fundamental changes such as those outlined would
require a great deal more detailed development before they would
be ready, but we would reiterate our disappointment that there
is no obvious debate or vision being developed and, accordingly,
offer this as a starting point.
Transitional arrangements: potential
to 'buy out' claimants' rights to legacy benefits
343. Wholesale structural reform to create a simpler,
more manageable system is a desirable prospect, although whether
it is achievable remains uncertain. This is partly because of
the extensive modelling that would be required to determine if
it is achievable, partly because of the enormity of managing such
change and partly because it raises the question of what happens
to existing claimants.
344. Previous welfare reforms have managed the latter
issue by putting in place transitional arrangements to protect
the rights of claimants to remain on legacy benefits when they
are replaced. However, for a system such as the single working
age benefit to be introduced, particularly if it were done in
the name of simplification, transitional arrangements would defeat
the purpose - retaining old benefits and adding a new layer contributes
to complexity as opposed to remedying it.
345. Donald Hirsch from the Joseph Rowntree Foundation
said:
"What happens effectively is that we have a
system with all the little old bits hanging off, and I think that
does add to the complexity itself."[367]
346. Steve Devereux from Jobcentre Plus highlighted
the fact that transitional protection contributes significantly
to the administrative complexity of the benefits system which
is "arguably the bane of my life and certainly the bane of
my staff's life."[368]
The impact, he continued, will be compounded as the numbers of
staff who understand the rules of the old benefits decreases:
"I can only speak from my position as a manager
who is having to deal with staff who work with things like transitional
protection. It is something I cannot possibly train new staff
to do. There is absolutely no way I can train new staff to understand
issues that came to pass 15, 20 years ago, and I am left being
very dependent on a limited number of staff who have got that
technical expertise.[369]
347. The DWP's memorandum similarly conceded that
"transitional protection avoids losers but increases complexity
because it preserves the old rules alongside the new."[370]
348. We discussed with witnesses the possibility
of overcoming the complexity of transitional protection by buying
out the right to retain a benefit when it is replaced by giving
claimants a lump sum at one time rather than continuing with a
small regular payment of the old benefit. Sue Royston told us:
"it would be very helpful, certainly with sickness
benefits. There are so many different forms of sickness benefit
it must be very difficult for officers to deal with. It is difficult
for advice agencies to deal with when you have got people on invalidity
benefit, incapacity benefit, SDA and so on. I suppose it depends
whether it is affordable. It would be very helpful if it was
affordable."[371]
349. Steve Devereux from Jobcentre Plus agreed. He
said:
"From an administration standpoint it is certainly
simpler in the long run. I do not know how employment support
allowance at this moment in time is going to impact on things
like transitional protection. It will start and new claims will
be taken on but there is certainly going to be a question about
the existing incapacity benefit customers as they transfer at
some point and migrate onto employment support allowance. That
seems to me like an opportunity."[372]
350. However, Fran Bennett suggested that forecasting
accurately how long a person is going to claim an old benefit
in order to determine how much they should receive in a lump sum
would be difficult. She concluded:
"the problem about the lone parent example is
that it would be very difficult to predict how much you ought
to give them to be fair, because you would not know how long their
lone parenthood would last. We know the average is only about
five or six years, I think, but it would be more or less difficult
to have such a buy-out depending on which group of claimants you
were talking about, I suspect.[373]
351. DWP provided information on the caseload of
legacy benefits in 2006-07:[374]Table
5: Legacy benefits - Current caseloads figures for the 'legacy
benefits' (benefits not currently open to new claimants)
