One fundamental problem we do have but there is no easy solution to is discriminating between those who for whatever reason can not work, those who are working but need state support to balance the books for a basic standard of living and those who are perfectly capable of working but know how to manipulate the system not to work. If the latter category were working 35-40 hours at minimum wage they may well still need state support but at least a lower level.
Indeed. Without very intrusive Govt. control / judgment of lives there will always be cases where welfare rules create hardship or give a free ride. For the fairness of everyone else, the rules need to be such that keeps those making welfare as a lifestyle choice to a minimum. This will inevitably result in 'dehumanising' actions (depending on your point of view). The less 'dehumanising' then the more making that choice. Where the line is drawn will always be subject to controversy.
In a country as developed as the UK, if there are a substantial number of people working "normal" working weeks at minimum wage who, assuming their circumstances do not necessitate a level of expenditure beyond what would usually be expected, cannot achieve a reasonable standard of living, then the only solution (short of universal basic income) is to raise the minimum wage. Routinely "topping up" insufficient wages with benefits is a pointless endeavour - it effectively removes the incentive for employers to pay their staff enough to live on to begin with.
But this is not a black and white issue either. Raising the minimum wage so a person with non-working spouse and four children can live without recourse to any welfare will allow a single person living with parents to live in luxury. (It would also destroy lots of jobs too!) Surely the welfare system acts as a safety net and should incentivise those on minimum wage to better themselves? Again, where the line is drawn will always be subject to controversy, as some people will be unable to better themselves for one reason or another, but without intrusive Govt. control and judgment of peoples lives what better system can there be?
Does it really matter if that is a "problem"? Personally, and I hope I speak for a lot of people here, I'd rather EVERYONE who genuinely needs help is able to get it, regardless of if that may mean some other people who don't need the help take advantage of that too. The other option of trying to discriminate just means those people who do need help are also caught up in it and punished too.
Personally, as someone who works his backside off and pays a huge amount of tax because of that, I couldn't give a damn if some people game the system. Those aren't the people I care about. The people I give a damn about are those who are having to choose between feeding themselves or their children, or between food and heating, or those who have to appeal DWP's decisions time and time again because the system is so stacked against them.
I would suggest that you are in a minority of those who pay a huge amount of tax. There will be many to whom this does matter - this was pretty much the thinking in the years prior to 1980 - especially as they would not want their tax bills to further rise to pay for it.
I also want EVERYONE who genuinely needs help to get it, but only those who are genuine, and there will no doubt be controversy over what is genuine and what is not. I certainly do want the number of some other people taking advantage to be kept to a minimum. I also realise that I would need the wisdom of Solomon to decide where the line is and am glad not to be making those decisions.