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Benefits parity with Britain: what it means and the cost of losing it

By Lisa Smyth

Social Development Minister Alex Attwood wants to have a conversation about parity in the future. He has said that to put people on welfare at greater risk by unilaterally abandoning parity is unwise and counter-productive.

The parity principle operates on the basis that Northern Ireland has the same range of benefits paid at the same rates and subject in general to the same conditions as in Britain.

Changes in existing legislation, and new legislation, generally, take effect at the same time in Britain and Northern Ireland.

Underpinning the parity principle is the fact that, as people in Northern Ireland pay the same rate of income tax and National Insurance contributions as those in Britain, they are entitled to enjoy the same rights and benefits as people in Britain, notwithstanding that Northern Ireland is not self-sufficient in funding the resulting benefit costs.

Parity also allows Northern Ireland to use computer systems in Britain with low contributions to the overall costs.

The cost of paying benefits in Northern Ireland (about £4bn) is heavily subsidised by Britain. Any costs resulting from changing parity would fall to be picked up by the Executive.

The Whitehall view is that it would not be feasible for British taxpayers to help to fund the Northern Ireland social security system if people in Northern Ireland were subject to different conditions of entitlement as people in Britain.

The benefit of parity results in annual funding transfers to Northern Ireland of almost £3bn to fund the Northern Ireland benefits system.

Without parity and the associated funding, the Northern Ireland social security system may be unsustainable.

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