In the USA, such benefits are normally not taxable, so that in recent years, legislation enabling these benefits to accrue in a special tax free account has been enacted.

These benefit accounts, called pre-tax savings accounts, are controlled by each employer. Ostensibly due to the complex accounting required at the human recourses departments, these accounts must be spent before the end of the year, or the funds will be lost.

In a typically American political maneuver, these benefit savings accounts were created to fail, by framing them in a self defeating program which is of no use to the anyone. 

Why not allow tax free benefit accounts to be created at banks and accrue on the family level? There they can be consolidated into categories which receive deposits from several employers, and accrue for the entire family or community?  

Of course, any sensible benefit account must be able to be carried to the next tax period, as long as the expenses debited to them are tax-free at the time of purchase.

If we were to pass legislation to create benefit accounts at private banks, to be used for specific social benefits by all family members, we can in one simple step eliminate much of the current chaos in the US social safety net.

Minor children, retired elderly family members and others who normally work only part time are at present not covered by employer paid insurance. Yet, if we had family benefit accounts at private banks, we could empower all family members to accrue benefits to these categorized accounts at the bank of their choice.

In multiple income families, all benefits could be consolidated to a single account, subdivided by benefit category. The family could decide what insurance policy best meets their needs, or what use they will give the funds, as long as they are used for the benefit they were intended for.

This simple cybernetic change would eliminate the primary and secondary insurance coverage now offered in the USA for dual income households. It would greatly simplify the benefit accounting at businesses, by moving the medical savings accounts from the human recourses departments and into banks.

For many people in the US today it has become necessary to hold down several jobs. Normally, part time after hours jobs do not pay benefits. Yet, under this family centric plan, all jobs would pay benefits based on the number of hours worked, and pay them into the family benefit account, by direct deposit.

Expenditures from these accounts could only be done by a transfer document, similar to a two party check, or by an electronic bank payment. The institution receiving the funds must provide a service which is allowed under that benefit. For example, family medical benefit can be used only to pay for medical expenses or to pay for a family medical policy.

Benefits could be paid on an hourly basis. There would be no need to withhold them from employees which do not meet minimum hourly work requirements, as in now the case. If a teenager flips burgers at the local hamburger shop, he could accrue his hourly medical benefit to the family medical account, to help pay for the family medical insurance, or for other family medical needs.

All benefits can be accrued in this way, both from private and public sources. Food stamps could be allocated in this manner, as well as any other food assistance that the private sector might deem appropriate to grant to employees in the future. Housing assistance could be granted to a family from several sources, for multiple family members, and consolidated into a family housing benefit account.

The benefits are to be paid out in the free market, as long as the destination of the funds can be controlled. This practice is not a novelty. In some states, food stamps are distributed by means of a food debit card issued to the head of household. This practice has proven to be reliable and relatively fraud safe.

Why not begin our work by changing this elementary structure in our benefits system? We will soon see how this simple measure will enable us to go on to more complex systems which will provide our citizens with a better social structure, and grant business some relief from incredibly burdensome accounting practices.

This is not rocket science, but it we can not get this off the pad, then anything more would just be systems in the sky.

Atlanta,
February 7, 2000