As well as these measures, Reform is proposing a raft of other radical measures including ditching the mandatory retirement age and increasing the age at which the basic state pension kicks in.
In a paper entitled The End of Entitlement, the think tank calls for phased increases in the age at which people are able to receive the state pension to be brought forward so that men would receive it at 68 by 2015-16 and women would receive it at 68 by 2017-18.
Reform argues a “poisonous blend of entitlement and apathy” has developed whereby middle and high earners, who it argues should be independent of public welfare, instead use their political weight to extract their “fair share” from Government, which it calculates costs the public purse £31bn per year.
Reform says the benefits that the “entitled classes” are taking advantage of include child benefit, child and working tax credits, pensions entitlements, the winter fuel allowance, statutory maternity pay, as well as what it calls a “near-free higher education”.
The think tank says introduction of personal accounts in 2015 is the opportunity to introduce broader personal welfare accounts, where individuals can save for and protect themselves against life “shocks” such as unemployment, disability, parenthood and retirement.
Reform says these accounts would allow individuals to take control over their finances and their future.
Under the proposals, when individuals reach working age, they would be free to choose a welfare insurance provider to open their personal welfare account. If no provider is chosen, then they would be allocated one. As well as making minimum contributions into their welfare account,individuals would also be free to top up their coverage through insurance products.
It says supplementary insurance could cover a range of life events through products already available such as income protection and life insurance.
Reform points to countries such as New Zealand and Canada as countries that have managed to reduce their welfare costs.
Other proposals outlined by Reform include scrapping child benefits and streamlining child tax credits, scrapping child trust funds, reforming statutory maternity pay and leave, scrapping the winter fuel allowance, charging student loan borrowers market rates and ditching the educational maintenance allowance.