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Simplify Benefits System

Comment 1st July 2010

First establish how much a person needs to live on. Allow anybody to claim this amount, no extras for lots of different things, one amount only. If you claim you agree to repay this amount as part of the tax system at an additional 50% of earnings until repaid. If you do not wish to claim it then you pay normal tax rates.

Example :-

Amount needed to live on £5000 per year

Tax at an additional 50% on first £10000 of earning, reducing to normal taxation rates when repaid.

So a person claims there allowance @ £5000

They earn £8000 per year

They repay £4000 (50% of £8000 earning)

They have a take home income of £9000 (£8000 + £5000 – £4000)

The figures above are only an example.

Why does this matter?

Advantages:-

Simple to understand

Simple and cheap to administer

No deterent to earning even if only able to get a part time job as whatever is earned makes the person better off.

No arbitary amount of working hours applied to benefits which means signing off one to claim another and back again along with associated delays and distress.

Encourages people to take any work available as they would be better off.

Allows a support structure for people that might want to start their own business but haven't the funds to support themselves during the start up period.

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