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What are the Social & Economic Consequences for Claimants of the Welfare Reform Act 2012 - Essay Example

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The government believes that the previous system of welfare was complex. It also believes that the previous system failed to encourage people to take up jobs and increase work hours. They think the new system will be much fairer and affordable to alleviate poverty…
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What are the Social & Economic Consequences for Claimants of the Welfare Reform Act 2012
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Download file to see previous pages The paper will explore what each side has to say and discuss them. Above all, it would examine how the claimants of government welfare are being affected or benefited.
The Welfare Reform and its Rationales: There are several reasons why government wanted to pass and implement the Welfare Reform Bill of 2012. What was the rationale behind the bill and its main elements? Or should one rather ask- what are the benefits the bill will produce that the bill’s main proponent Lain Duncan Smith puts forward? The government believes that the previous system of welfare was complex. It also believes that the previous system failed to encourage people to take up jobs and increase work hours. They think the new system will be much fairer and affordable to alleviate poverty. They claim that the Universal Credit will bring together several benefits under a single payment system (Great Britain: Parliament, 2012, p 6). The Universal credit system will encourage people to take up a job, and increase their working hours. This will make sure that work pays. The Universal credit will make the transition of in and out of work smoother. The new system, according to the government, will be simpler, easier to understand and cheaper to administer. The system will also reduce the number of working poor. Other benefits a claimant will get are help with budgeting, supported accommodation housing cost and self employment start up period. The Department for Work and Pension (DWP) wil help the claimants with their budgeting by selecting appropriate bank accounts, financial products etc. for them. The financial products will be such that they should make sure one’s necessary bills are covered and one’s credit rating improves. The supported accommodation housing cost will help the DWP to meet the higher expenditures involving providing of supported accommodation. The provision of self-employment start up period will make sure that a claimant gets enough time to establish him/herself. When a person is self employed for a period less than 1 year, a start up period will be granted. Therefore, the person need not look for work or be available for work. This will give claimants more time to focus on the development of their business. People will be given a new start up period once in every five years; not once in their lifetime. (Great Britain, The Stationary Office, 2012, pp 1, 2; Department of Work and Pensions, 26 April 2013) Another element of the new bill is the Personal Independence Payment (PIP) which replaces the old Disability Living Allowance. They claim that PIP will help people towards the additional cost that one has to bear for a long term illness or disability. The PIP is base on the evaluation of the needs of an individual. It will not stress on what disability one has; but will consider how the disability will affect one. The PIP benefit is neither mean-tested nor subjected to tax. The pip is payable to person who has a job or is unemployed. Government claims that PIP will engage a more objective evaluation, with a direct consultation with an independent physician for most of the claimants. There will be regular reviews which will result in a continuous and appropriate support for individuals. (Great Britain,The Stationary Office, 2012. pp 56- 58; Department of Work and Pensions, 26 April 2013) Housing support comes under universal credit. The universal credit will take account of a suitable amount to meet the cost of room rent or a home-loan interest. The government claims that the new approach is fairer; improves motivation to work and brings stability in the market. The ...Download file to see next pagesRead More
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