This report explores the radical proposal to overhaul the current social security system for people out of work in favour of employment insurance.
Currently, income replacement policies provide financial protection when people leave a job or stop working temporarily. This includes non-means tested social security benefits, payments from employers and private insurance policies covering circumstances such as unemployment, sickness, caring for a dependant and re-training. The think tank recommends overhauling the current system in favour of an employment insurance which is loosely based on Canadian employment insurance. This would consist of a combination of paid leave from employers and state insurance benefits.
Through employment insurance, people who stop working would typically be paid half their current or recent earnings with a cap on the amount payable to high earnings. Fabian Society describe this proposal as a huge step forward for the UK and advocate that this amount be paid in tandem with Universal Credit for low-income households. In the case of those who stop working due to sickness, the think tank goes further and recommends that 80 per cent of earnings are paid. Fabian Society’s plan also suggest new employment rights including improved statutory redundancy pay, four weeks of annual carer’s leave and a new carer’s career break of up to 12 months to help the most vulnerable in the workforce.
The key Point Raised by The Fabian Society describes the current system of income replacement as inadequate falling behind the support found in other rich countries.
Read more here