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Changes to benefit system

money worries

Queen’s Speech – Welfare Reform Bill

 

“The tax and benefits system will be made fairer and simpler.”

 

The purpose of the bill:

To simplify the benefits system in order to improve work incentives.

 

The main benefits:

  • Making the benefits system less complex

  • Improving work incentives

  • Getting the five million plus people languishing on benefits into work and out of poverty

  • Reducing the scope for fraud and error

 

The main elements:

  • Removing the confusing complexity of the benefits system, which too often leaves people afraid to make any change to their circumstances and can be a barrier to moving from benefits to work

  • Making people see a gain when entering work through simplifying the benefits system

  • Reducing the scope for fraud and error by making the benefits system simpler

  • Reducing unnecessary administration of benefits. Currently people can have overlapping entitlements or switch between different benefits – around 200,000 people a year cycle between Jobseeker’s Allowance (JSA) and Incapacity Benefit (IB/ Employment and Support Allowance (ESA)

 

Effect on insurance:

  • More important than ever for people to have insurance

  • People cannot rely on the state

  • Insurers with payment restrictions based on state benefits may have to amend their cover

  

Income protection insurance: News update: 29 May 2010

  

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