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Abolish benefit means tests

Comment 20th July 2010

Many benefits require applicants to prove their income to demonstrate eligibility. If they then earn more than a certain limit the benefits are reduced at effective rates of income withdrawal, that if called tax would make the pips of the rich squeak. If the means tests are abolished the benefits would be made universal, avoiding the bureaucracy for applicants and government and the disincentive to work for the recipients. Of course this would mean higher bills. To pay for this I suggest the following.

  • Base benefits on personal status (age, children, disability) not income levels.
  • Class all benefits (including child benefit) as taxable income. Then higher earners benefit less.
  • Abolish the personal tax allowance. The universal benefits would replace this.
  • Every current means test represents a poverty trap that stops people working. The additional incentives to work would increase national wealth and tax revenue.

Why does this matter?

The point is to end the current system that traps people in dependency on benefits. I realize the abolition of tax allowances is the opposite of the LibDem policy, but the current system of means tests is trapping many in poverty, destroying their incentive to work, and stifling the economy of the country.

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