How is the money spent? How is social security funded?

How is social security funded?

What is social security for?

Social Security

The Department of Social Security is the biggest spending department of government and a major pillar of the welfare state. It provides more than ₤92 billion of benefits to secure a basic standard of living for people who are retired, unemployed or cannot work, to provide help for families and with the costs of disablement.

The social security system provides a minimum level of income below which no-one should fall if they are unable to work through their circumstances, unemployment, or disability. Social security provides cash benefits for children and families, unemployed people, disabled people and pensioners, including war pensioners.

The Government wants the welfare system wherever possible to help people towards independence, not to encourage dependence. The Government sums up its aims for social security like this: work for those who can; security for those who cannot. Later on this section describes the Government's plans for reform and the measures to help people into work.

All taxpayers, employers and employees contribute to the cost of social security. The programme has two sources of finance.

· The cost of contributory benefits and their administration is met from the National Insurance Fund, to which all employers and employees contribute. The Fund also has income from its investments.

· Non-contributory benefits and their administration are financed from general taxation.

General taxation provides more than half of social security income, National Insurance contributions from employers around a quarter and National Insurance contributions from employees about a fifth.

The total social security budget in 1997-1998 was more than ₤ 92 billion, which is almost a third of all government spending. The pie chart top left show how the budget was spent on people who received benefits for the year 1997-1998. The pie chart bottom left shows how the money was spent in terms of benefits for the same year.

Дата добавления: 2013-12-13