Welfare and benefits Flashcards
Which two main types of benefits make up the current system of welfare?
Contributory and non-contributory benefits?
What are contributory benefits paid on the basis of and what is the philosophy behind them?
Previous contributions.
You pay in when you are young, healthy and in work, and you draw out your benefits when you are old, sick or unemployed.
What is the main example of a contributory benefit?
National Insurance. (Your old age pension is dependent on NI contributions and you get higher Jobseeker’s Allowance benefits if you have paid NI.)
What are non-contributary benefits paid on the basis of?
Need
How is the need for benefits like Universal Credit assessed?
Depending on income and claimants are required to undergo a ‘means test’ to ensure they need the benefit.
Name the benefits paid regardless of income and give some examples.
‘Universal’ benefits.
For example winter fuel payments and free TV licences for elderly people (up to 2020 when this was scrapped).
Child Benefit used to be a universal benefit but the Coalition Government introduced restrictions on people earning over £50,000 p.a.
What are the two main cost factors in relation to benefits?
- It is expensive. ‘Social Protection’ – mainly pensions and benefits is the largest items of public expenditure, costing about £260bn a year – about 30% of total public spending.
- It will get more expensive as the population ages and life expectancy increases.
What are 4 main criticisms of welfare benefits?
- Some people argue that handing out universal benefits that are not dependent on contributions weakens the idea that people have a stake in the system.
- It is no longer a temporary safety net – some people remain on benefits for many years, even in times of economic prosperity.
- Some argue that handing out benefits without conditions acts as a disincentive to work, promotes idleness and traps people in poverty.
- People on benefits face very high marginal tax rates when they enter employment. This means they pay a large proportion of each extra pound they earn in tax and lost benefits – plus they have to pay for child care, commuting costs etc.
Name the 3 main types of benefit and outline what they do
- Jobseeker’s Allowance – paid to adults working fewer than 16 hours a week. There is a higher payment for those with sufficient NI contributions.
- Income Support – Non-contributory benefit for those on low incomes and not in full-time employment.
- Employment and Support Allowance and Disability Living Allowance – paid to the sick and disabled. Paid at different rates depending on disability. Coalition introduced Work Capability Assessments that have proved controversial.
What is the new type of benefit that came from the Welfare Reform Act 2012?
Universal Credit
Which 6 other benefits does it replace?
- The means tested part of Jobseeker’s Allowance
- The means tested part of Employment and Support Allowance
- Income Support
- Child Tax Credits
- Working Tax Credits
- Housing Benefit - Rent element only.
When was the Benefits Cap introduced and what is it?
In the 2012 Welfare Reform Act.
The idea is that people on benefits should not get more money than the average family in work.
What is the maximum amount of money p/a that families can live on under the Benefits Cap? And who does it mostly impact?
£20,000 (£23,000 in London )
It affects relatively few families – most often those with a lot of children living in expensive housing in central London.
What is the Two Child rule?
From April 2017 Child Tax Credit was limited to the first two children
Child Tax Credit is one of the benefits being phased out and replaced by Universal Credit - but the two child limit will also apply to the ‘child element’ of Universal Credit.
In which three contexts do exemptions apply?
Exemptions announced for adopted children and multiple births, also announced for child born through “non-consensual conception” the so-called rape clause
