Workers who lose their jobs will be prioritised for benefits under sweeping reforms to the welfare system to be unveiled this week.
Ministers are creating a new, time-limited benefit for those who find themselves out of work after paying into the system, dubbed ‘unemployment insurance’.
It will have a lower age limit – likely around 22 years – with different support set to be announced for out-of-work youngsters.
The Government wants to change the system so that those who have not paid into it get less out of it than those who have.
However, exemptions will be in place for those who are unable to work because of severe disabilities.
Work and Pensions Secretary Liz Kendall is set to announce the changes to the Commons this week, with a statement expected as early as Tuesday.
She is seeking to save around £5billion from the welfare bill, with the bulk of the cuts expected to come from changes to Personal Independence Payments (PIP).
Ministers are planning to prioritise benefits for workers who lose their jobs in an ‘unemployment insurance’ under new reforms (file photo)
Work and Pensions Secretary Liz Kendall (pictured) is set to announce the changes to the Commons this week
Explaining the motivation behind the reforms, Cabinet Office Minister Pat McFadden said that without action four million people would be on long-term sickness benefits.
‘There are 2.8 million people on long term sickness benefits,’ he told the BBC’s Sunday With Laura Kuenssberg.
‘We are an outlier in the UK and not in a good way. We’re the only G7 country that hasn’t recovered its pre-pandemic rate of employment and we’re the Labour Party.
‘We believe in work. We believe in the good that a good job can do for people. We don’t believe it is good that if somebody could work with a bit of support that they’re left to live a life on benefits.
‘200,000 of those 2.8 million have told us they would work tomorrow with the right support. So, we’ve got to reform the system, because if we don’t, the trajectory of standing back and doing nothing is that it won’t be 2.8 million in a few years, it will be over 4 million people. We can’t allow that to happen.’
A government source said last night: ‘The challenge we inherited and the case for change is stark.
‘When this Government took office last July, more than 9.3 million working aged people were out of work and not looking for employment – that’s more than the entire population of London. 2.8 million of those were out of work due to long term sickness – the highest in the G7.
Under the proposals, the benefits system would be reformed so that those who have paid into it get more out of it than those who haven’t (file photo)
Cabinet Office Minister Pat McFadden said that 200,000 of the 2.8 million people on long term sickness benefits have said they would work tomorrow if they had the right support (file photo)
‘We have a moral duty to get Britain working again and put welfare spending on a sustainable path so we can unlock growth as part of our Plan for Change.
‘But our reforms aren’t simply driven by a desire to balance the books. It’s about giving people the best opportunities to get on in life through meaningful reforms to the system to stop people becoming trapped and dependent on benefits.
‘For too long the debate about welfare has been dominated by politics and ideology over people – those changes under this government. We will deliver reform with real people and real voices at the heart of the changes – people who for too long have been ‘signed off’ rather than ‘signed up’ to support which will help them back to work.’
