Buried in the welfare reform bill, published tomorrow, is a new rule that will achieve just that. You have to wonder whether it will survive in its current form.
Iain Duncan Smith’s ambitious plan to create a new Universal Credit will extend a savings means test — applied to those on out of work benefits — to working families that would currently be eligible for tax credits.
This will mean any working family with savings of more than £16,000 will have no entitlement to universal credit, once the system is in place.
A further 200,000 families, according to the Social Market Foundation, would see their benefit docked because they held savings of more than £6,000.
There is a reasonable case for withdrawing state support for families with lots of money sitting in the bank. And this changes will pave the way to a single working age credit — the great prize of welfare reform.
But the politics is awful. The families likely to be hardest hit are those saving for a deposit to buy a new house. The Council of Mortgage lenders says the typical deposit for a first time buyer stood at £31,500 in late 2010. That’s double the IDS savings threshold.
Anyone working household on universal credit would need to forgo hundreds of pounds of monthly income, merely to be given the opportunity to save.
The other group that will be hit are those who inherit significant sums. It will be a stealth inheritance tax on income.
Ministers insist measures will be in place to ensure that no families lose out, at least at the point of transition. But as soon as family circumstances change (that includes your child leaving home, a change in income, or a separation) they will be hit by the new savings rule.
This issue may not blow up this year, or even in the next couple of years. But somewhere down the line a minister is going to have some uncomfortable questions to answer.