PM set to unveil universal benefit

Prime Minister Helen Clark

Prime Minister Helen Clark will present a big overhaul of the social welfare system when she addresses Parliament's first sitting of election year tomorrow.

She told the Herald yesterday an overhaul of the benefits system was under way to create a single universal benefit, a long-held aim of some in the Labour Party.

"It's very close to coming to a head."

Helen Clark said the central focus of the overhaul would be on how to move people from benefits to independence under a strong, single-benefit structure.

Welfare dependency was the target of National leader Don Brash's Orewa speech last Tuesday but Helen Clark said work on the overhaul had been going on for a long time.

The plans are understood to involve replacing the complex system of 10 base benefits - including sickness, invalids, unemployment and domestic purposes - with a single universal benefit.

The Herald understands there is no intention to cut benefit levels. People with special needs - such as invalids - would get top-ups with their universal benefit.

The raft of additional payments would be incorporated into the proposed single benefit but the most important add-on - the accommodation supplement - is likely to remain unchanged.

Social Development and Employment Minister Steve Maharey could not be contacted last night.

Last October he said there were 10 base benefits and 36 add-ons in the present system. He wanted to cut the amount of time Work and Income staff spent administering the system - reportedly 70 per cent - so they could concentrate on helping beneficiaries move off welfare.

Helen Clark will also use her speech to indicate plans to boost savings and home ownership, as well as increase labour productivity and workforce participation rates.

Last November at Labour's annual conference she touched on plans for a third term that included:

* Helping prospective home owners save their deposit.

* Incentives for those saving for tertiary education.

* Ensuring more people save for retirement.

"There's intense policy work going on, so I'll be signalling pretty clearly across those areas," she said yesterday. However, she indicated that little detail of the initiatives would be offered tomorrow.

The Prime Minister refused to comment on whether cuts to personal or company tax rates were part of the Government's plans this year.

Benefits overhaul

What's the problem?

* The system is so complex people are not getting their full entitlement, and staff are spending too much time on administration instead of getting beneficiaries off welfare.

How it might work

* Ten benefit types would be merged into one universal benefit.

* The many supplementary payments would be incorporated into the single benefit - although the accommodation supplement is likely to remain unchanged.