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White paper to set out Universal Credit proposals

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Detailed proposals for a single credit to replace the current state benefits and tax credits will be set out in a white paper to be published later in the autumn.

‘The Universal Credit will simplify the benefits system by moving from the current benefit structure to a simple streamlined payment. People’s benefits will also be withdrawn at one unified rate,’ said the Department for Work and Pensions.

In a recent consultation paper the DWP said the interactions between benefits and tax credits make the transition to work risky and uncertain.

Excessive complexity for claimants arises, it said, from the interaction between different benefits and tax credits and ‘layers of previous reforms, with many different benefits addressing the same underlying issue and entitlement to benefit paid by one agency affecting the benefit payable by another’.

More work would be needed to decide the most cost-effective approach to delivery of the Universal Credit, the consultation paper said, including ‘how best to define the relationship between the Department for Work and Pensions’ delivery agencies, HM Revenue & Customs and Local Authorities’.

It added: ‘We envisage an integrated IT system to manage all claims, and a single payment system to apply a withdrawal rate and pay the correct entitlement. These would not be entirely new systems and could be built on our existing IT and capabilities.

'HM Revenue & Customs is consulting employers and payroll providers on mechanisms that could support more frequent or real-time collection of Pay As You Earn data. Such a system could also enable the use of real-time earnings data to calculate net entitlement, removing the need for claimants to notify different agencies when their earnings change.’