May benefits need to be repaid in the future?

Those people who are on welfare may need to someday repay the money given to them. This is an idea being floated by more and more Conservative Mps, including some influential ones such as Mr. Kwarteng. The MPs are stressing this form of loan benefit are in particular focusing on young people.

If a change like this were to ever occur, it may dramatically change the social safety net in the UK. Many of the welfare schemes will in effect become repayable loans. The claimant would need to repay the money to the government once they received a job or have a source of income.

Reason the change is being considered

The central government continues to try to find ways to reduce the overall cost of the many welfare schemes and other benefits. It now costs over £90bn, and millions of families rely on these safety nets to hep pay their bills or rent each month. It is not being used to help those in an emergency, but rather is being relied on for everyday needs.

With continued budget cuts occurring, one of the key aims of the Conservatives is to give people an incentive to gain new skills or find work. That cost to the UK of over £90bn needs to be reduced, according to Mr. Kwarteng and others. This is part of the free enterprise model being pushed.

Many in the government feel that by changing the assistance programmes to a loan, this will not only save money but also ensure people eventually get a job. In particular, with young people under the age of 25, some feel they really need to get out there and find a job. The youth in the UK should not be relying on welfare schemes to make it through.

If the welfare entitlement were issued to residents as a low cost loan, this means that family will still get the government aid they need. They will stall have money while they are jobless or facing a crisis. But the big difference is that it will provide claimants a big reason to find work. As if they do not, then the debts will continue to build up with the government.

This may be first used for youth. People under the age of 25 will at first need to repay any funds under some of the ideas being considered by Conservatives. They would have the most time to repay the government, and this is why, if it ever progresses, it may be rolled out to them as a trial. This is but one of the ideas being thrown around by the Enterprise Group of Conservative MPs.

In addition to the idea of offering aid as a loan, another option being considered by MPs, including Chancellor George Osborne, is to reduce tax credits. This will be for working families. This too can go a long way towards encouraging work of those families that are on a low income.

No matter what happens with future benefit payments, people should continue to prepare for changes now that the Conservatives have a strong foothold from the recent election. Also, most of the changes will be reductions in safety net programmes as they are trying for a competitive economic environment while reducing the government debt levels.