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

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What are the Social and Economic Consequences for Claimants of the Welfare Reform Act 2012

Welfare Reform Act 2012 is one big step as it demands some radical changes. It is regarded as the most significant reshaping of the welfare state in 60 years (Field, 2012). The main goal of the reforms is to encourage people to get into work. It has been a general feeling among people on benefits that if they get employed, their gain is going to be very small. The net benefit that they obtain from work becomes very low due to the costs incurred while doing work e.g. transport. For people on benefits, working part-time is oft times not even an option because of the fact that costs of work almost completely set off the benefits received. The major steps in curtailing this culture of dependency involve the introduction of Universal Credit. This is a measure to make the system simpler by replacing five work-based benefits with one benefit. Universal Credit is considered to be an efficient and less complicated system by its advocates. The Universal Credit is made up of the following elements: The standard allowance; An amount for responsibility for children and young people; An amount for housing; and An amount for ‘other particular needs and circumstances’. (NHA Briefing, 2012) The award is calculated by the determination of a ‘maximum amount’ through the aforementioned elements....
(NHA Briefing, 2012) Universal Credit is to be paid in arrears as a single monthly payment for most of the households. This is an effort to replicate the efforts of working people who get their salaries by the end of the month as a single payment. It might be also be paid jointly to a couple with the couple itself deciding as to who receives the payment. Currently, many people are receiving benefits on a fortnightly basis. Also, claimants of housing benefits are not being paid directly; their benefit is paid directly to their landlords. The Universal Credit system would bring a change in the payment of both types of beneficiaries. It will be paid on a monthly basis instead of fortnightly basis, and the tenants would be receiving their benefit directly in the shape of a monthly payment. However, the Government has not overlooked the fact that there might be some cases where a single monthly payment would not be suitable. There may also be instances where it is more appropriate to pay the couples separately rather than jointly. There might also be cases where it is not suitable to pay the tenants directly. These exceptions would be identified after the demonstration project that began in June 2012 and is to end in June 2013. The system of Universal Credit would be formally employed in three phases: Phase 1 (October 2013 to April 2014): In this phase, all new claims to current benefits and credits would be gradually withdrawn. The last to end in this phase are the new claims to Housing Benefits and Tax Credits. There are existing claimants to benefits who might experience a change in circumstances of their lives. For instance, the birth of a child brings a huge change. Such ...Show more
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Summary

Welfare reform is a process that requires great examination and scrutiny of current circumstances regarding the provisions of social security and welfare, so that the right decisions can be made for the future course of action…
What are the Social and Economic Consequences for Claimants of the Welfare Reform Act 2012
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