Social security system

The Department of Social Security is the biggest spending department of government and a major pillar of the welfare state. It provides more than ₤92 billion of benefits to secure a basic standard of living for people who are retired, unemployed or cannot work, to provide help for families and with the costs of disablement. What is social security for?The social security system provides a minimum level of income below which no-one should fall if they are unable to work through their circumstances, unemployment, or disability. Social security provides cash benefits for children and families, unemployed people, disabled people and pensioners, including war pensioners.The Government wants the welfare system wherever possible to help people towards independence, not to encourage dependence. The Government sums up its aims for social security like this: work for those who can; security for those who cannot. Later on this section describes the Government's plans for reform and the measures to help people into work. How is social security funded?All taxpayers, employers and employees contribute to the cost of social security. The programme has two sources of finance.The cost of contributory benefits and their administration is met from the National Insurance Fund, to which all employers and employees contribute. The Fund also has income from its investments. Non-contributory benefits and their administration are financed from general taxation.General taxation provides more than half of social security income, National Insurance contributions from employers around a quarter and National Insurance contributions from employees about a fifth.How is the money spent?The total social security budget in 1997-1998 was more than ₤ 92 billion, which is almost a third of all government spending. The pie chart top left show how the budget was spent on people who received benefits for the year 1997-1998. The pie chart bottom left shows how the money was spent in terms of benefits for the same year. Who receives benefits?More than 20 million people receive some sort of benefit in Britain. The elderly and the short-term sickreceive predominantly contributory benefits, unemployment peoplereceive mainly income related benefits, familiesmainly other benefits while the long-term sick and disabledreceive all three types of benefit.How is Social Security organised?The Department of Social Security (DSS) comprises a small central headquarters which support the Secretary of State for Social Security and a team of Ministers in developing policy, and five executive agencies. Most of the services in Great Britain are run by the separate agencies.Executive agencies of the DSS-The Benefits Agency- pays most social security benefits,The Child Support Agency- collects child maintenance from absent parents,The War Pensions Agency- administers benefits and delivers services for war pensioners and their dependants,The Information Technology Agency- develops, implements and supports the IT system which now plays a major role in social security.In Northern Ireland the Social Security Agency administers contributions and benefits.Types of benefit-There are three broad categories of social security benefit:Contributory benefits,where entitlement depends on a person's record of National Insurance contributions. The main contributory benefits are Retirement Pension, Widow's Benefits, Incapacity Benefit and Jobseeker's Allowance. These account for half of social security spending. Income-related benefit, for people whose income falls below a certain level, determined according to their family circumstances. These benefits take a person's capital well as their income into account. The income-related benefits are Income Support, Housing Benefit, Council Tax Benefit, Disability Working Allowance, Family Credit and Earnings Top-up in certain pilot areas. These account for a third of social security spending. Jobseeker's Allowancehas both contributory and income-related components. Other benefitsdepend on conditions such as disability or family needs. Benefits in this group include Industrial Injuries Disablement Benefit, Attendance Allowance, Disability Living Allowance, Severe Disablement Allowance and Child Benefit. These other, non-contributory benefits account for about a sixth of social security spending.The Government's aims-modernise the structure of social security and the way benefits are delivered to encourage financial independence and promote social cohesion,make the welfare system active in supporting work, saving and honesty,tackle social and economic inequalities.Welfare Reform is central to the Government's plans for the future development of Britain. Reform will tackle three key problems with the existing welfare system:inequality and social exclusion are worsening, especially among children and pensioners, despite rising spending on social security;people face a series of barriers to paid work, including financial disincentives; and fraud is taking money out of the system and away from genuine claimants.Reform will be a long process, but the Government has already begun by publishing a Green Paper on Welfare Reform entitled New Ambitions for Our Country - A New Contract for Welfare. It sets out a number of key principles guiding welfare reform and includes a series of success measures to be achieved over the next 10 to 20 years. For example, by the end of the process of reform, the results that the Government expect to achieve include:a reduction in the proportion of working age people living in households where no-one works,a guarantee of decent income in retirement for all,a reduction in discrimination against people and an increase in the number of disabled people at work ,a rise in the proportion of parents meeting their financial obligations to children after separation,a reduction in the amount of money lost in fraudulent payments.

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