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16 February 2011
Last updated at 19:08 ET
The government is to set out how it intends to overhaul the welfare system to try to make work pay better and to tackle the "benefit culture".
A new "universal credit", new sanctions for those turning down jobs and a cap on benefits paid to a single family will be among the changes outlined in a welfare reform bill on Thursday.
Current rules "encourage people to act irresponsibly", David Cameron has said.
Labour back some changes but say help for people to find work is inadequate.
They have criticised the government's back-to-work programme, a centrepiece of the package, saying thousands of young people are being "betrayed" at a time of record youth unemployment.
'Better off' Ministers will explain how they plan to reshape the welfare system to try to ensure people are better off in work than on benefits, to simplify its operation and to help people get jobs.
They say the fact that five million people of working age are on out-of-work benefits, 1.4 million of those for nearly a decade, while unemployment has become entrenched in many communities shows that the current system is not working.
Ahead of the announcement, David Cameron said the "collective culture of responsibility" which had underpinned the benefits system for more than 50 years had eroded in recent years.
"The benefits system has created a benefit culture," he said. "It does not just allow people to act irresponsibly but often actively encourages them to do so."
The key changes are expected to include:
This will see existing out-of-work and in-work entitlements, such as Jobseeker's Allowance, Income Support and Housing Benefit, paid as a single lump sum although it is unclear how many benefits will be included in the new payment.
Moving people onto a single payment, ministers believe, will make it easier for them to claim benefits, demonstrate the value of being in work, reduce administrative costs and the risk of fraud.
Ministers say the current system actively discourages claimants from looking for work, or those on low-paid jobs from increasing their hours, as rates of tax and benefit reductions leave them worse off.
In future, the government is guaranteeing that for every £1 extra people earn, they will be at least 35p better off as a result of being in work.
Up to 2.7 million households will be better off as a result of the changes, ministers say, with more than a million of these - including many of the poorest - seeing an increase of £25 a week.
'Punishing people' But the Institute for Fiscal Studies has warned that while the changes could benefit 2.5 million households, a further 1.4 million - including many lone parents and families with savings of more than £16,000 - face being worse off.
Ministers say transitional arrangements will be put in place to make sure no-one is worse off while they are being migrated to the new system - which will cost £2.1bn up front to introduce.
That short-term cost, ministers insist, will reap considerably higher savings in the long term.
Labour support efforts to simplify the system and back "conditionality" on benefits but say people should not be penalised for being unable to find work and have criticised the proposed maximum £26,000 cap on benefits - likely to affect 50,000 families - as a dangerous gimmick.
Critics say the overhaul, combined with cuts to housing benefit for those on Jobseeker's Allowance for more than a year, could leave vulnerable people worse off.
"To reduce the housing allowance for those out of work means punishing people for failing to find a job in a very difficult job market," said David Orr, chief executive of the National Housing Federation.
"The proposal is unfair, unjust and will heap further misery onto households already under huge financial pressure. People should be encouraged into work, but threatening the roof over the head of those who are unemployed isn't the right way to go about it."
A new "universal credit", new sanctions for those turning down jobs and a cap on benefits paid to a single family will be among the changes outlined in a welfare reform bill on Thursday.
Current rules "encourage people to act irresponsibly", David Cameron has said.
Labour back some changes but say help for people to find work is inadequate.
They have criticised the government's back-to-work programme, a centrepiece of the package, saying thousands of young people are being "betrayed" at a time of record youth unemployment.
'Better off' Ministers will explain how they plan to reshape the welfare system to try to ensure people are better off in work than on benefits, to simplify its operation and to help people get jobs.
They say the fact that five million people of working age are on out-of-work benefits, 1.4 million of those for nearly a decade, while unemployment has become entrenched in many communities shows that the current system is not working.
Ahead of the announcement, David Cameron said the "collective culture of responsibility" which had underpinned the benefits system for more than 50 years had eroded in recent years.
"The benefits system has created a benefit culture," he said. "It does not just allow people to act irresponsibly but often actively encourages them to do so."
The key changes are expected to include:
- Single universal credit to come into force in 2013
- Tax changes to enable people to keep retain more income
- Changes to the disability living allowance
- More details of the back-to-work programme
- Those refusing to work face maximum three year loss of benefits
- Annual benefit cap of about £26,000 per family
- Review of sickness absence levels
This will see existing out-of-work and in-work entitlements, such as Jobseeker's Allowance, Income Support and Housing Benefit, paid as a single lump sum although it is unclear how many benefits will be included in the new payment.
Moving people onto a single payment, ministers believe, will make it easier for them to claim benefits, demonstrate the value of being in work, reduce administrative costs and the risk of fraud.
Ministers say the current system actively discourages claimants from looking for work, or those on low-paid jobs from increasing their hours, as rates of tax and benefit reductions leave them worse off.
In future, the government is guaranteeing that for every £1 extra people earn, they will be at least 35p better off as a result of being in work.
Up to 2.7 million households will be better off as a result of the changes, ministers say, with more than a million of these - including many of the poorest - seeing an increase of £25 a week.
'Punishing people' But the Institute for Fiscal Studies has warned that while the changes could benefit 2.5 million households, a further 1.4 million - including many lone parents and families with savings of more than £16,000 - face being worse off.
Ministers say transitional arrangements will be put in place to make sure no-one is worse off while they are being migrated to the new system - which will cost £2.1bn up front to introduce.
That short-term cost, ministers insist, will reap considerably higher savings in the long term.
Labour support efforts to simplify the system and back "conditionality" on benefits but say people should not be penalised for being unable to find work and have criticised the proposed maximum £26,000 cap on benefits - likely to affect 50,000 families - as a dangerous gimmick.
Critics say the overhaul, combined with cuts to housing benefit for those on Jobseeker's Allowance for more than a year, could leave vulnerable people worse off.
"To reduce the housing allowance for those out of work means punishing people for failing to find a job in a very difficult job market," said David Orr, chief executive of the National Housing Federation.
"The proposal is unfair, unjust and will heap further misery onto households already under huge financial pressure. People should be encouraged into work, but threatening the roof over the head of those who are unemployed isn't the right way to go about it."