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EU welfare reforms could encourage low earners not to work


Government plans to stop EU migrants claiming in-work benefits would encourage some British workers to give up their job, according to some government officials.

The prime minister is making welfare reform within the EU a key demand ahead of the proposed in-out referendum.

However, the current demands to stop EU migrants from claiming in-work benefits will most likely have to be scrapped, as it is prohibited under EU law to impose “additional requirements on EU workers that do not apply to a member state's own workers.”

Therefore, it is widely accepted that in order to pass the reforms that David Cameron has demanded, an EU treaty change would be needed, which is something that EU leaders are insistent will not happen.

Alternative options

The current situation has meant that government ministers are looking at alternative options to curb in-work migrant benefits, many of which would mean that thousands of UK nationals would also become ineligible for these benefits.

One option that is being considered is to stop people claiming in-work benefits, unless they received unemployment benefits in the previous 12 months.

However, this has been heavily criticised, as it would mean that some people would benefit financially by temporarily giving up their job.

A second proposal that is being considered by Treasury officials is to introduce a four year residency period before becoming eligible for in-work benefits. However, some families would be thousands of pounds worse off if one family member found a job, further discouraging people from working.

Additionally, this plan has been criticised for discriminating against young adults, as an 18 year old would have to wait until they are 22 years old before becoming eligible for the benefits.

A third option would deny in-work benefits to people who have not paid a certain level of National Insurance contributions over a three year period. However, this would be difficult to implement as it would change the newly introduced Universal Credit system, and could make EU migrants eligible for out-of-work benefits too.


The proposals have come under heavy criticism by government officials and politicians, as they could hit UK families and discourage people from working.

Nigel Farage, leader of UKIP, said that the prime minister was failing in his renegotiation of Britain’s EU membership. He said:

"Even the one area where he was going to go to the European Council and try to get a rule change, actually we've surrendered already by saying we will change the British social security system.

"So young couples in this country, aged 21, who work and have got children, will, if this goes ahead, be better off not working than being in work. I think it's appalling."

However, despite this criticism, it is believed that the prime minister remains confident that he can achieve welfare reform from his EU negotiations.

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