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Welfare reform plans unveiled

  • Published: Thursday, 17 February 2011

A new Universal Credit will replace the current patchwork of benefits and credits, under plans contained in the Welfare Reform Bill. The aim is to make work pay by ensuring that people are better off for each hour they work and every pound they earn.

Welfare Reform Bill

Benefits - find out more

Everything you need to know about benefits and financial support

Hailed as the biggest shake up of the system for 60 years, the Welfare Reform Bill plans to:

  • replace the patchwork of benefits and credits with a Universal Credit to make work pay
  • introduce a cap, linked to average weekly earnings, which will limit the amount of benefits a household can get
  • make benefits conditional, to help prevent the system being abused or defrauded
  • introduce a new Personal Independence Payment for disabled people – this will involve an assessment to target support at those who really need it
  • create a new system of child support which puts the interest of the child first 

New powers to tackle the problems of fraud and error, which cost the taxpayer around £5.2 billion a year, will also be introduced.

The new measures include tougher one-strike, two-strike and three-strike rules, with a benefit ban of three years for people who offend repeatedly. 

A single investigation service and a new mobile regional taskforce will be set up to investigate each and every claim in high fraud areas. Penalties of £50 for more minor offences will also be introduced.

According to the Department for Work and Pensions, the government’s plans will lift nearly 1 million people out of poverty, including 350,000 children.

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