Single state benefit proposal bodes well for protection industy

A single state benefit could be moving a step nearer today with the publication of a consultation paper on the future of the welfare state.

It also includes proposals to force those benefit claimants currently out of work for health reasons back into employment.

The 21st century welfare paper includes a proposal to scrap all the present out of work benefits and tax credits and replace them with a universal credit.

This would bode well for a suggestion, put forward by Edmund Tirbutt at the Protection Review conference and reported by COVER, for greater industry involvement with Government.

Tirbutt's scheme included the need for a single state benefit with a top-up income protection option administered as a public-private partnership.

Speaking to COVER, Peter Le Beau, co-chairman of the Protection Review, says this is not an unfeasible opportunity for the industry to work with the new Government.

"There is a chance that it would have a new attitude to insurance and there could be a possibility of a partnership in some area," he says.

"The point Edmund Tirbutt raised was interesting because it was a concept of outsourcing the sickness benefits to the insurance industry on a pooling basis.

"This seems on the face of it to be a feasible issue," he adds.

The universal credit option is one of three options set out by Iain Duncan Smith MP, the Secretary of State for Work and Pensions, with the other two being: combining elements of the current income-related benefits and tax credit systems; and supplementing monthly household earnings through credit payments reflecting circumstances such as children, housing and disability.

The consultation runs until 1 October.

The full interview with Peter Le Beau is in the August issue of COVER, which is out next week.