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B1329 - Welfare Modernisation Bill 2018 (Second Reading) watch

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    B1329 - Welfare Modernisation Bill 2018 (Second Reading), TSR Libertarian Party




    Welfare Modernisation Bill 2018

    A Bill to replace the entirety of the UK’s welfare state, reduce bureaucracy, create a freer economy and stimulate economic growth through increasing the Personal Allowance significantly, replacing Jobseeker’s Allowance with a new Unemployment Allowance and repealing most current forms of welfare and replacing them with a Negative Income Tax.


    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

    1: Personal Allowance

    (1) The Personal Allowance is increased to £20,000 per year.

    2: Repeals

    (1) The following benefits are hereby abolished:
    Budgeting Loans
    Care to Learn
    Child Tax Credit
    Child Trust Fund
    Cold Weather Payment
    Constant Attendance Allowance
    Council Tax Benefit
    Crisis Loans
    Employment and Support Allowance
    Free School Meals
    Guardian’s Allowance
    Healthcare Travel Costs Scheme
    Health in Pregnancy Grant
    Healthy Start Scheme
    In Work Credit
    Incapacity Benefit
    Income Support
    Industrial Injuries Disablement Benefit
    Invalidity Benefit
    Job Grant
    Jobseeker’s Allowance
    Maternity Allowance
    Mobility Supplement
    Pension Credit
    Reduced Earnings Allowance
    Return to Work Credit
    School Uniform Allowances
    Severe Disablement Allowance
    Statutory Adoption Pay
    Statutory Maternity Pay
    Statutory Paternity Pay
    Statutory Sick Pay
    Sure Start Maternity Grant
    Working Tax Credit
    Training Premium
    Travel to Interview Scheme
    Unemployability Supplement or Allowance
    Universal Credit
    Vaccine Damage Payment
    Widowed Parent’s Allowance
    Winter Fuel Payment
    War Disablement Pension
    War Widow’s/Widower’s Pension

    3: Unemployment Allowance

    () This program will administer a weekly lump sum of £91.38 to unemployed individuals.

    (2) Receipt is conditional upon status in any one of the following categories:
    a) Active seeking of full-time employment in accordance with current codified standards to receive Jobseeker’s Allowance.
    b) A disability or dependent(s) which reasonably preclude an individual from holding full-time employment in accordance with current codified standards.
    c) Volunteerism with a registered charity or public organization a minimum of 30 hours per week.

    (3) After one month of unemployment, individuals that receive Unemployment Allowance under clause (2)(a) must accept any job offered in which they would work for 30 hours per week or higher. Failure to do so will mean that they are no longer eligible for Unemployment Allowance.

    (4) The program is to be administered by the Department for Work & Pensions.

    4: Negative Income Tax

    (1) There is established a program, available to all individuals aged 18 or over, called the Negative Income Tax.

    (2) This program will administer an amount of money to individuals earning below £20,000 and working for less than 30 hours per week who are not on Unemployment Allowance in accordance with the equation "15% of the difference between gross annual income and the Personal Allowance established in this Act"

    (3) This program will administer an amount of money to individuals earning below £20,000 and working for a minimum of 30 hours per week in accordance with the equation "30% of the difference between gross annual income and the Personal Allowance established in this Act".

    5: Commencement, Short Title, Extent and Conditions

    (1) This bill shall come into force on April 1, 2018.

    (2) This bill shall be cited as the Welfare Modernisation Bill 2018.

    (3) This bill extends to the United Kingdom.

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    Notes

    A majority of aspects of the current welfare state are identified and abolished. This is the correct decision for the UK, because a complicated and overly bureaucratic system means that - over time - the welfare state has become exceptionally inefficient. It wastes money on areas in which welfare is not necessary, and has less effect on the lives of the people who receive it than it should as it is split into different areas rather than giving liquid cash that can be spent exactly how the individual who receives it wants. Of course, without replacing the current welfare state, our economy would face a major crisis.

    In contrast to the many types of welfare which are abolished under this bill, the system that has been proposed as a replacement consists of merely five: Unemployment Allowance, Child Benefits, Housing Benefits, Disability Allowance and the Negative Income Tax. Unemployment Allowance ensures that those out of work receive more help in their time of need, but balances this by increasing the restrictions around it. The Negative Income Tax ensures that everybody under the new Personal Allowance of £20,000 has their income supplemented, working to tackle poverty in the UK, increasing social mobility and serving to counter any negative effects caused by the changes to the welfare state. This bill blends the goals of neo-liberal economics with a pragmatic approach to ensuring the UK can thrive, meaning that - if it passes - we will undoubtedly see a rise in people’s living standards.

    Changes for Second Reading

    - The costing has been revised, with the amount of people eligible for the Negative Income Tax being linked to two sources and the amount of money per person reduced due to the changes to the policy.

    - Further tax changes apart from the Personal Allowance raise have been removed from the bill in order to ensure that VAT can remain the same as it currently is.

    - The abolition of all minimum wage legislation has been removed entirely from the bill due to it not being necessary for the other reforms mentioned to be enacted.

    - Child Benefits, Housing Allowance and Disability Allowance will coexist with the Negative Income Tax and Unemployment Allowance due to their necessity to the individuals and families that receive them.

    - Unemployment Allowance will no longer be based on dependents but a 25% increase on the current amount of money recipients receive per week.

    - Any mention of pensions has been removed from the bill, with the system not receiving any changes under this bill.

    Costing

    Unemployment Allowance: Jobseeker’s Allowance currently costs £2.4 per year according to this article. By increasing expenditure by 25%, the new Unemployment Allowance would cost £3 billion per year, an increase of £600 thousand. This could be different depending on changes to the amount of people receiving unemployment benefits and for how long.

    Negative Income Tax: An estimate of 30 million people would be eligible to receive money through the Negative Income Tax according to this graph and this article. Assuming an average cost of £1,500 per person, the Negative Income Tax would cost around £45 billion per year.

    Total Revenue: £53.3 billion (Repeals) = £53.3 billion per year.

    Total Costs: £45 billion (Negative Income Tax) + £3 billion (Unemployment Allowance) = £48 billion per year.

    Overall Change: £53.3 billion per year (Total Revenue) - £48 billion per year (Total Costs) = £5.3 billion per year.

    Note: The changes do not include tax revenue gained due to economic growth or tax revenue lost due to the Personal Allowance raise. The Negative Income Tax estimation could also be more or less than predicted, but is based on the amount that the average recipient should receive.


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    What is this party's obsession with trying to abolish our NHS and cutting child and disability benefits?
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    £91.38 a week is by no means enough for anyone to live on.
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    (Original post by JMR2018)
    What is this party's obsession with trying to abolish our NHS and cutting child and disability benefits?
    PRSOM

    A £20,000 personal allowance from the current one of £11,500, unless it was increased earlier on TSR, is also too much of a sudden increase in my opinion.
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    (Original post by JMR2018)
    What is this party's obsession with trying to abolish our NHS and cutting child and disability benefits?
    I guess you could call it an obsession with seeing that the current system is not sustainable, and that for the benefit for everyone, it’s not great that healthcare covers everyone the same amount, with no incentive for varying care standards.
    Besides that point, the amount of benefits in circulation is not what one could call efficient and at its current situation probably makes it easier to abuse, this bill aims to simplify things, specifically with JSA which means it doesn’t deter someone from returning to work. After all the longer someone is unemployed, the more the chance of them being unable to get a job, this bill aims to offer an ultimatum of sorts: accept a temporary solution during their search for jobs which keeps them within the market opposed to relying on the state for help continuously. So it’s not trying to abolish benefits but rather make things more efficient and provide only the necessary help needed for families

    (Original post by The PoliticalGuy)
    £91.38 a week is by no means enough for anyone to live on.
    I disagree, it is enough for anyone who is living within their means to survive per week. Plus it is a temporary solution until they get a job... so I’m not sure where the problem lies here
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    No, the same problems exist, using a single mother with one child as an example, if she worked 30 hours a week on minimum wage she would receive £6077 a year in benefits, which is excluding the child benefits this bill keeps. This bill will pay the mother 15% of £20000 minus £11700 which is £1245: the single mother is £4832 worse off if this bill is implemented. Saunders16 should remember the efficiency savings a Negative Income Tax creates are not larger than the decreases in welfare payments vulnerable groups will see; it is a fallacy to think NIT can make all claimants better off for a lower cost.
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    (Original post by JMR2018)
    What is this party's obsession with trying to abolish our NHS and cutting child and disability benefits?
    This bill does not abolish the NHS, nor does it change disability benefits (child tax credits, but not child befits, are replaced by the NIT).

    (Original post by The PoliticalGuy)
    £91.38 a week is by no means enough for anyone to live on.
    It is 25% more than people on Jobseeker's Allowance currently receive; a heavier increase would serve to incentivise unemployment whereas the increase included in this bill serves to counter the added restrictions.

    (Original post by JellyMilk)
    PRSOM

    A £20,000 personal allowance from the current one of £11,500, unless it was increased earlier on TSR, is also too much of a sudden increase in my opinion.
    This is not fair, as the raise in Personal Allowance replaces the benefits that are abolished; the NIT is better for the average person as individuals get more choice over their own money.
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    Nay. Anyone relying on the state for support is already underfunded. Any policy which reduces the spending on social security is either a) targeted to make the unfortunate even more miserable; or b) unrealistic with its costings.
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    Sounds good, a strong 'aye' from me
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    (Original post by JMR2018)
    What is this party's obsession with trying to abolish our NHS and cutting child and disability benefits?
    It's called Libertarianism.
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    (Original post by Jacob E)
    No, the same problems exist, using a single mother with one child as an example, if she worked 30 hours a week on minimum wage she would receive £6077 a year in benefits, which is excluding the child benefits this bill keeps. This bill will pay the mother 15% of £20000 minus £11700 which is £1245: the single mother is £4832 worse off if this bill is implemented. Saunders16 should remember the efficiency savings a Negative Income Tax creates are not larger than the decreases in welfare payments vulnerable groups will see; it is a fallacy to think NIT can make all claimants better off for a lower cost.
    How much does this person receive in Housing Allowance and Disability Allowance?
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    Aye
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    (Original post by Saunders16)
    How much does this person receive in Housing Allowance and Disability Allowance?
    The woman did receive child tax benefits, housing allowance, and disability welfare, however, those types of welfare were excluded from the total welfare payments received because this second reading keeps those benefits: the woman is worse off.
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    Nay. This is becoming a joke ...
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    (Original post by Jacob E)
    The woman did receive child tax benefits, housing allowance, and disability welfare, however, those types of welfare were excluded from the total welfare payments received because this second reading keeps those benefits: the woman is worse off.
    She would therefore receive Housing Allowance, Disability Allowance, Child Benefits (but not Tax Credits) and money from the Negative Income Tax under this bill; there is a misunderstanding. Once again, how much does she currently receive through Housing Allowance and Disability Allowance?

    (Original post by CoffeeAndPolitics)
    Nay. This is becoming a joke ...
    What are your issues? At least provide some feedback if you are going to comment instead of simply insulting. I want to make this bill satisfactory to the House and somehow I expect you to support a government version of this that is unlikely to be much different seeingas the Negative Income Tax was pledged by both of our parties.
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    (Original post by Saunders16)
    She would therefore receive Housing Allowance, Disability Allowance, Child Benefits (but not Tax Credits) and money from the Negative Income Tax under this bill; there is a misunderstanding. Once again, how much does she currently receive through Housing Allowance and Disability Allowance?



    What are your issues? At least provide some feedback if you are going to comment instead of simply insulting. I want to make this bill satisfactory to the House and somehow I expect you to support a government version of this that is unlikely to be much different seeingas the Negative Income Tax was pledged by both of our parties.
    The amounts are £8 a week in housing benefit and £21 a week in child benefits, there was no disability income because the woman in the example was not disabled. That is a total of £1945 a year, however, as those benefits were not counted in the figure I provided in the first comment and the benefits were not counted in the total the woman receives under this bill, the difference is the same. The woman is worse off because the NIT payments in this bill are below the tax credits scheme in the existing system where the woman is paid over £100 a week. In all of the example that can be constructed, the minor benefits can be ignored because the biggest difference is found when comparing NIT to tax credits.
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    The error in your calculations is that the mother would receive "15% of £20000 minus £11700 which is £1245" through the Negative Income Tax. This is wrong because she works 30 hours a week; if she worked any less than 30 hours a week she would receive 15% of the difference. However, she meets the requirement to receive 30% of the difference. This means she would receive £2490 a year through the Negative Income Tax instead. Using your statistics, £2490 plus £416 through Housing Allowance is £2906, which means you are incorrect by £1661. This means that she would be £3171 worse off rather than £4832 worse off. This remains a significance difference but is not as drastic as your calculations would suggest; it is an unfortunate consequence of simplifying an unsustainable system.

    Those who appear to be worse off through your examples on both the Second Reading and original version of the bill seem to be single parents that no longer receive Child Tax Credit rather than those without children, which shows that the Negative Income Tax would provide much-needed assistance to a large amount of people within a better, less complex system. However, I agree that this should not be done by hurting this particular vulnerable group. Could you please tell me how much she receives through Child Tax Credit? If it is a significant amount then the correct course of action would be to abolish Housing Allowance rather than Child Tax Credit, which would be possible due to the similar cost of both benefits to the taxpayer.
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    (Original post by Saunders16)
    The error in your calculations is that the mother would receive "15% of £20000 minus £11700 which is £1245" through the Negative Income Tax. This is wrong because she works 30 hours a week; if she worked any less than 30 hours a week she would receive 15% of the difference. However, she meets the requirement to receive 30% of the difference. This means she would receive £2490 a year through the Negative Income Tax instead. Using your statistics, £2490 plus £416 through Housing Allowance is £2906, which means you are incorrect by £1661. This means that she would be £3171 worse off rather than £4832 worse off. This remains a significance difference but is not as drastic as your calculations would suggest; it is an unfortunate consequence of simplifying an unsustainable system.

    Those who appear to be worse off through your examples on both the Second Reading and original version of the bill seem to be single parents that no longer receive Child Tax Credit rather than those without children, which shows that the Negative Income Tax would provide much-needed assistance to a large amount of people within a better, less complex system. However, I agree that this should not be done by hurting this particular vulnerable group. Could you please tell me how much she receives through Child Tax Credit? If it is a significant amount then the correct course of action would be to abolish Housing Allowance rather than Child Tax Credit, which would be possible due to the similar cost of both benefits to the taxpayer.
    If the mother receives £2490 per year in NIT, the difference is £3587 because the total of £6077 received in the current system excludes housing benefits and child benefits, my calculation is wrong by £1245. The difference is huge for a woman in that situation, to her £3500 might be £4800 because the figures are unobtainable sums of money. That is because single parents are quicker to add in the calculator, if the same is done for a couple there are reductions in income. It should be said that this bill is damaging to families where the parents work fewer than 30 hours a week to have time to care for their children because the couple cannot afford childcare. Child tax credit would be £76 for the woman, a small part of the total welfare income. NIT seeks to achieve something that cannot be achieved, if the welfare system is going to be controlled, an state debit card that can be spent on good judged necessary would be a better system. Under a state debit card the government could efficiently distribute money, control what the money is being spent on to prevent claimants wasting money, and bill a claimant for fines, unpaid rent, and other bills the claimant needs to pay.
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    Nay - It is a very radical bill that will end up making a lot of people worse off.
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