Wednesday, September 16, 2009

Get the scroungers out working

Tories in rethink on benefit system

Families earning more than £30,000 would have their entitlement to benefits cut under far-reaching reforms to the welfare system being proposed by former Tory leader Iain Duncan Smith's think-tank. The Dynamic Benefits report recommends increasing support for working couples and measures to remove financial barriers to finding a job.The report concludes that under the present system some claimants are worse off if they take a job paying up to £15,000 a year as they face the loss of benefits. The recommendations hold to the simple principle that work is the sustainable route out of poverty.

Posted by mytimeisnigh @ 08:28 AM (706 views)
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4 thoughts on “Get the scroungers out working

  • From the blurb on the CSJ website, this looks like too smallish steps towards a Citizen’s Income style scheme – rabid simplification (replace 51 benefits with 2 benefits) and reducing marginal withdrawal rates from 90% (once you take PAYE and means tested withdrawal into account) down to a flat 55%.

    So I’m quite hopeful about this, but I’ll have to print off and read the relevant chapter before I make up my mind.

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  • OK, I’ve skim read 370 pages and they are still making it far too complicated, the headline “55% withdrawal” figure is a Big Fat Lie (this is 55% after PAYE of 31%, so mathematically it is 70% overall) and they reckon it would take 2 to 3 year to work out how to withdraw benefits via the PAYE system.

    It would in fact take a couple of hours to suss this out as the PAYE system already caters for this when it is taxing ‘benefits in kind’ (like a company car or whatever), you just adjust peoples Personal Allowance downwards to account for the welfare benefits they receive (in the same way as you do for benefits in kind) so that if you get benefits and a lot of housing benefit you might end up with a K-code, in which case the total tax/NIC that will be drawn is restricted to 50% of gross salary (which seems to be the absolute upper maximum in any sane or normal world).

    Anybody who knows anything about PAYE will know what I am talking about – but Iain Duncan Smith and his little friends clearly don’t, so what’s the use?

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  • mark wadsworth says:

    On closer inspection their proposals are hardly better than what we have now.

    I’ve done the workings to show how it should be done.

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  • I really can’t see how a simplified system of single tax – LVT or other and citizens income would not be a vote winner if explained properly to the public. Even just for a large party to put it forward on a manifesto, to see the objections from the major parties and stimulate debate?
    Really all these proposals do is to illustrate what we knew already – none of the major parties are viable options. None wish to alter the status quo or the balance of power between the people and the wealthy/powerful elite, so ‘far-reaching reforms’ are nothing more that tinkering at the edges.

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