‘Social insurance’ proposal would hit the poorest hardest – and perhaps even kill some

‘There is only one surprise about John Godfrey’s proposal to scrap publicly-funded state benefits and replace them with compulsory ‘insurance’ – that it has taken the Tories six years to get around to it.
For the people earning the least, it would be a financial disaster. It’s all very well saying someone earning £27,000 a year could pay in £11 per month and claim 40 per cent of their earnings (£10,800) from an insurer over a 12-month period. Most people don’t earn £27,000.
If you’re on £13,000 or thereabouts, paying in the same percentage would bring you £5,200 over a year – less than the current level of Employment and Support Allowance (is this why it is being cut for those in the Work-Related Activity Group?), and an amount on which it is much harder to survive. Not only that, but there is no guarantee that an insurer will pay out the money when it is needed.’
Read more: ‘Social insurance’ proposal would hit the poorest hardest – and perhaps even kill some