Possible Benefits Changes?

By: A.C.

Last year I wrote an article regarding tax payments which cost me a great deal of money repaying Income Tax through no fault of my own.

At that time I had also read about a proposal by Ian Duncan Smith to tax Disability benefits amongst other benefits. That article can be read here.

At that time IDS seemed to be ‘thinking out loud’ and there appeared to be no legislation or other Government Papers which would confirm such a swingeing DWP move.

The question of how would a further cut in welfare of £12 billion be paid for seems, on the face of it, to have been answered.

On Friday, the BBC reported that they had been given some leaked documents  from the DWP which were allegedly written by civil servants and commissioned by the Tory Party.

This seems to confirm what was already posited by IDS in that speech in October last year.

The BBC claims to have uncovered several benefits which could be changed in order to meet the new, lower budget.

  • “Industrial Injuries Compensation Scheme – could be replaced by companies providing industrial injury insurance policy for employees. Any that did not would become members of a default national industrial injuries scheme, similar to the programme for asbestos sufferers. DWP predicted saving – £1bn
  • Carer’s Allowance – this could be restricted to those eligible for Universal Credit. Leaked documents suggest about 40% of claimants would lose out. DWP predicted saving – £1bn
  • The contributory element of Employment and Support Allowance and Job Seekers Allowance – currently claimants who have paid enough National Insurance contributions can get the benefits with little means testing; DWP analysis suggests 30% of claimants, over 300,000 families, would lose about £80 per week. DWP predicted saving – £1.3bn in 2018/19
  • Disability benefits – Disability Living Allowance, Personal Independence Payments and Attendance Allowance (for over 65s who have personal care needs) would no longer be paid tax free. Possible saving – £1.5bn per annum (based on IFS Green Budget calculation.
  • Council Tax Support – to be incorporated into Universal Credit. Possible saving – not known
  • Child Benefit – Limiting the benefit to the first two children. Possible saving IFS estimates £1bn saving per annum in the long run but little initially.
  • Regional Benefit Caps – The £23,000 limit would vary in different parts of the country, with for instance Londoners receiving the top amount due to the higher cost of living. Possible saving – not known and dependent on where levels were set”.

The question that I would like answered is: would any other Government, not involving a Tory Coalition, enact these proposals and make them law in the next session of parliament?

As Ed Balls has said he would not change a thing regarding the Budget, and he is quoted by the BB C as saying he is in favour of a regional benefits cap.

Rosanna Trudgian, policy officer at the charity Mencap, speaking to the BBC, said the proposed changes were unfair.

“Disabled people don’t choose to have their disability. They don’t choose to pay for these additional costs related to that disability,” she said.

Mr Duncan Smith told the Andrew Marr Show on Sunday 29 March that  “none of the stuff” that had been reported had been discussed with the chancellor, and it was standard for government departments to put figures together – but that did not mean they were policy.

He said a benefit freeze and pledge to reduce the annual benefits cap from £26,000 to £23,000 would account for about a quarter of savings and were “a good indication that we know where we’re going to go to make those savings”.

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