This white paper sets out the Government's plans to introduce legislation to reform the welfare system by creating a new universal credit. This universal credit will radically simplify the system to make work pay and combat worklessness and poverty. The consultation document (Cm. 7913, ISBN 9780101791328) spelt out the issues and the consultation responses (Cm. 7971, ISBN 9780101797122), publishing simultaneously with this paper, broadly welcomed the proposals that were put forward. Universal credit is an integrated working-age credit that will provide a basic allowance with additional elements for children, disability, housing and caring. It will support people both in and out of work replacing working tax credit, child tax credit, housing benefit, income support, income-based jobseeker's allowance and income related employment and support allowance. The universal credit will improve financial work incentives by ensuring that support reduction is tapered at a consistent and managed rate. It will also be backed up by a strong system of conditionality. As a simpler system managed by one department it will reduce the scope for costly errors and fraud. The universal credit will not replace: contributory jobseeker's allowance & contributory employment and support allowance which will continue aligned to earnings; disability living allowance; child benefit; and bereavement benefits, statutory sick pay, statutory maternity pay, maternity allowance and industrial injuries disablement benefit

2

The white paper published as Cm. 7957 (ISBN 9780101795722)

2

Reveals the deep roots of the UK's lack of resilience when COVID-19 hit and sets out an ambitious manifesto for change.

In May 2011, the Department for Work and Pensions commissioned the Social Security Advisory Committee to undertake an independent review of passported benefits and how they link with Universal Credit. Passported benefits were defined as those additional benefits to which working-age claimants on certain means-tested benefits and tax credits are automatically entitled. The SSAC broadly considered them in four groups: education, health, utilities and access to justice. They did not consider Housing Benefit or Council Tax Benefit, and referred only briefly to benefits within the Social Fund. The SSAC found that all passported benefits fulfill important needs, are highly valued by those who receive them and make significant social contributions. Options for the future should not undermine policy objectives and it is unlikely that one approach will suit all passported benefits. Review respondents identified a tension between three key factors: reducing complexity, making work pay while maintaining a range of policy objectives and keeping costs neutral. One of the simplest solutions offered was extending eligibility for passported benefits to everyone receiving UC. This option, though, would not meet the constraint of cost-neutrality. Alternatively income thresholds within UC could be imposed, below which claimants are automatically entitled to receive certain passported benefits. To alleviate the cliff-edge it would also be possible to: impose an earnings disregard, allow the benefit to run-on for a period of time after the cut-off point has been reached, withdraw the benefit in a stepped taper. The Coalition Government recognises the opportunities and challenges but notes that there has already been a considerable amount of work undertaken and believes there is scope to deliver