A NEW welfare system, if Scotland votes yes to independence, should be fairer and simpler according to a report from an expert group.
The recommendations include restoring the link between benefits and the cost of living, and increasing the National Minimum Wage to the Living Wage level.
The bedroom tax should be abolished and a new Social Security Allowance would replace separate benefit payments except housing benefit.
A new allowance rate for carers should be set at the same level as Job Seekers Allowance to £72.40 a week.
The Scottish Government accepted much of the report but said it would consider the recommendations on the minimum wage and SSA and a replacement for the Work Programme.
Martyn Evans, chairman of the Expert Working Group on Welfare, said: "We have made almost 40 specific proposals. We have recommended that the real value of benefits is restored each year."
Deputy First Minister Nicola Sturgeons said: "In particular, I strongly endorse the Group's view that the welfare system should act as a strong safety net and a springboard to a better life.
"They are right when they say work should be the best route out of poverty for most people but that the rise in in-work poverty needs to be addressed if this is to be the reality."
Poverty campaigners welcomed the report.
John Dickie, of the child Poverty Action group, said: "If we are serious about ending child poverty it is vital that any new approach is underpinned by the restoration of the value and universality of child benefit.
"Furthermore wider benefit rates need to be reviewed toward ensuring they provide not just a 'safety net' but the minimum income needed to participate fully in society."
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