“The biggest shake-up to welfare in Britain since 1942” is how The Daily Telegraph describes Work and Pensions Secretary James Purnell’s proposals. At their heart, notes Philip Webster in The Times, is the abolition of “two of the benefit payments that underpin Britain’s welfare system” – income support and incapacity benefits. The latter will be scrapped by 2013, while income support will be replaced by a widened “Job Seekers Allowance” for those able to work and a new “Employment and Support Allowance” for those who can’t. Here’s a basic guide to what we’re losing – but be warned, the system is riddled with exceptions and is very much dependent on your circumstances.
Income support provides money for those on a low income who are not eligible for Job Seekers Allowance because they work part-time, are sick or have a disability, or have special status such as being a lone parent. Those who work more than 16 hours a week, have savings above £16,000, or study full-time are excluded in most instances. The amount you receive is means-tested, and is based on the difference between what the Government thinks you need to live on and your current income. There are three elements: a fixed personal allowance which is based on your age – currently £60.50 per week for a single person aged 25 or over; a “premium”, which could bring it up to £86.35 if that person is also disabled (say registered blind); and “additional payments” to cover specific housing costs such as council tax.
Incapacity benefit is paid to anyone unable to work, due to sudden illness or disability, and who is also ineligible for statutory sick pay – paid at £75.40 a week – through being, say, self-employed or unemployed. The benefit is normally only available for the first 28 days of absence from your current job (if you have one). It is only available beyond that if you are unable to do any job at all. For the first 28 weeks the benefit is currently £63.75, for weeks 29-52 it’s £75.40 and beyond that £84.50. Let’s hope the proposed changes at least make things simpler.