Quarkside

08/12/2011

IDs for a UK Citizen Account

Quarkside has just heard of a way to solve the following problems:

  • Benefits costs
  • Under employed people
  • Education maintenance allowance
  • University living costs
  • Basic pensions
  • Enhanced pensions
  • Recovering money for fines
  • Health costs

It requires setting up a citizen account (UK citizens only) for EVERY citizen, including children. For sake of an abbreviation, we will call it the UK Citizen Account (UCA). The following rights are given, they are paid from taxation, without exception, into a freely spendable account (FSA).

  • 0-16 child allowance, spendable by nominated parent or guardian
  • 16-18 youth allowance, spendable by the young person
  • 19-24 tertiary education allowance, spendable by the citizen
  • 24-67 working age allowance
  • 67-80 first pension
  • 80+ second pension

Alongside the government input is personal input which is a proportion of taxable income.  This is a protected endowment account (PEA).  The main aim is to build up a personal fund that can be drawn down as housing, pension, health and mid-life education.  The nearest analogy is Singapore’s Central Provident Fund (CPF).  It is a colonial legacy: ” When the Japanese Occupation ended in 1945, Singapore became a British colony again. Life was hard. People struggled to make ends meet. To ensure that workers could take care of themselves in their old age, the Central Provident Fund was set up as a compulsory savings scheme. ”

The benefits to the government are:

  • Simplicity of administration – entitlements are universal, every citizen independent of other income
  • Means tested benefits cease, such as housing benefit.
  • Personal National Insurance (NI) contributions are paid into the PEA, like a compulsory personal insurance.
  • Employers NI contributions are paid into the PEA as a percentage of taxable income.
  • Debts to the government can be taken from the fund, eg fines, unpaid taxes.
  • Choice by the citizen for medical treatment.  The tariffs are well documented.  A percentage is taken from the PEA for every access to NHS services – lower percentage for basic services (10%) – higher percentage for more expensive, private care provision (90%).
  • Funding for infrastructure from accrued savings
  • Funding for low cost housing by giving loans from accrued personal PEA savings
  • Choice to use the PEA for adult education and retraining for new skills.   The Working Age Allowance is always paid to provide some basic income.

The benefits to the citizen are:

  • Guaranteed untaxed income throughout life, whether working or not.
  • Working will always be better than not working.
  • Protected Fund, built up by work, for spending on housing, further education, pensions and health.
  • Additional contributions from employers (including self-employed), interest on account and profits from fund investments.
  • Opportunity to obtain a mortgage from funds accrued – commercial interest rates will be charged.
  • Opportunity to pay for adult education or re-training.
  • No risk of bankrupt or stolen pension funds.
  • Choice to pay for care at home or residential homes.
  • The residue on death forms part of the estate – not taken by the government.

The details can be sorted out, but it avoids the costly mistake of Universal Credits.  Such a total restructure of the welfare state means sacrificing sacred cows. Singapore now has a handle on social welfare costs, unlike the UK.  They have a successful economy.  Rationing of health costs is left to citizens and their families.

And the governance issue is: – citizens will need to have a trusted Identity,  without too many duplicates.  Perhaps this will be good enough to allow them to vote, too.

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1 Comment »

  1. […] fresh out of a politics degree, may not even know there is a difference. There are alternative approaches to controlling the costs of social welfare – but the have not appeared in radar of […]

    Pingback by Household Hold-up. Universal Complexity « Quarkside — 08/12/2011 @ 6:27 pm | Reply


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