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Wednesday, February 10, 1999 Published at 09:04 GMT

UK Politics

Welfare state faces overhaul

The bill aims to provide security for those who cannot work

Social Security Secretary Alistair Darling: those who can work, must work
The government is set to unveil its bill to create a modern welfare state through what it calls an overhaul of the benefits and pension system.

The bill stems from Labour's "contract with the people" - the 10 key points of their election manifesto, which promised to "lay the foundations of a modern welfare state".

But critics claim the bill is far from being the fundamental redesign of the welfare system promised.

Social Affairs Correspondent Kim Catcheside; is this a staging post to forcing all claimants to work?
They say the legislation is merely tightening up the current system by increasing means testing for incapacity allowance and widows' benefit, and the possibility of withdrawing benefits from those who do not turn up to job interviews.

Gateways to work

[ image: Able-bodied claimants will undergo an interview]
Able-bodied claimants will undergo an interview
Labour first raised the idea of a more personalised benefit system when in opposition. The gateway idea will reinforce the government's philosophy there should be work for those who can and security for those who cannot work.

It will bring together welfare providers such as the Employment Service and Benefits Agency at a single point of contact, with as many services as possible based on the same site.

The reformed system will also aim to treat all unemployed individuals in a similar manner, rather than as different groups such as lone parents, the unemployed or the disabled.

Disability benefits

Social Affairs Editor Niall Dickson: changes introduced by stealth
The bill will aim to provide more help for the most severely disabled and tougher tests for incapacity benefit.

There are 1.7 million people currently claiming incapacity benefit, three times as many as in 1979, although there has been a steady fall in claimants since tighter restrictions were introduced in 1995.

Dr Lynne Jones MP: "Heavy handedness might lead to loss of trust in system"
The government is critical of the method by which individuals are assessed for eligibility for the benefit, believing it to be an "all or nothing test". Instead, it favours a test of employability rather than a test of incapacity.

In the Welfare Reform Green Paper the government stated "we want a new approach to IB [incapacity benefit] which focuses on what disabled people can do, not on what they cannot".

[ image: The government wants a test of employability]
The government wants a test of employability
Disability groups have criticised the proposed test. They argue it fails to cover learning disability and mental health adequately, is too rigid and can not deal with conditions which fluctuate.

Pension reform

The government also plans to introduce a "stakeholder" pension, which would offer low-cost, flexible pensions. Although the framework would be established by government they would not be provided by the state.

The 1992 Conservative government originally moved to introduce arrangements to allow pensions to be shared on divorce following a Lords vote in favour of the move during the passage of the Family Law Act. The proposals did not move beyond a white paper published in February 1997.

In June 1997, the then Social Security Secretary, Harriet Harman, announced plans for a bill on pension sharing to come into force in the year 2000 and a draft bill was published last year.

Widows benefit

[ image: Widows pension will be extended to widowers]
Widows pension will be extended to widowers
The reforms are expected to increase the lump sum widows' payment to £2,000 and extend it to widowers.

It will extend the widowed mothers' allowance to widowers and to restrict it to those with children in full-time education.

Widows' pension will be extended to widowers but time-limited. Widows and widowers aged 45 and over with no dependent children will receive a weekly benefit for six months.

There are 284,000 widows claiming benefits, costing £1bn each year. The government estimates that the reforms will save £500m in the long-run. In the short-term they will cost an additional £140m.

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Internet Links

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