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Iain Duncan Smith’s Welfare Reform project has experienced criticism concerning the social implications of his Universal Credit and the nationwide cap on benefits at £26,000.
Iain Duncan Smith, the work and pensions secretary is seeking to introduce a £26,000 household benefit cap. The new scheme, called Universal Credit, will dispose of the main existing benefits, replacing them with one integrated system; it aims to combine the main means-tested benefits and tax credits into one collective benefit with the intention of “making work pay”.
Benefits will be paid to claimants on a monthly basis (unlike the current fortnightly basis) to only one member of the household and will be predominantly IT based, with individuals needing to apply, claim and manage their account online.
What’s more, the Department for Work and Pensions (DWP) plan to introduce so-called “in-work conditionality”, which enforces reductions in claimant’s universal credit payments if they do not extend their hours upon starting work.
Ministers say that the £500 weekly cap – equivalent to the medium income of working households – will introduce fairness into the benefit system and provide more of an incentive for claimants to find work.
The government argues that it is unfair that families on benefits should receive more than the average working family.
Most people would accept that principle.