In case you're here via Obo...

... I deconstructed Iain Duncan Smith's "Big Idea" here.
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In reply to the comments:

@ Obo, I mentioned the CI in my post, it's buried away in the figures. Once you've worked out how to 'pay' for the £10,000 personal allowance (see below), all you have to do is merge all existing welfare payments (Income Support, JSA, students grants and loans, Statutory Maternity Pay etc, total cost £15 billion to £20 billion) into a flat rate payment and deal with the 'means testing' via the normal PAYE system (which was the main topic of my original post).

This'd probably be fiscally neutral - those current unemployed would get a bit less on the whole because they are more likely to get a job if the 100% income-based benefit withdrawal is scrapped; as against other people who would get a bit more (instead of making them claim Tax Credits).

@ JH: Obo's post is here.

@ JT, why not hike it to the Lib Dems' £10,000? They reckon it would 'cost' £17 billion or something, so what? Tax Credits cost about £25 billion all in*, so we can use £17 billion of that to 'pay' for the increase in the personal allowance and the other £8 billion can go towards increasing Child Benefit (total cost £10 billion) to something sensible like £30 or £40 per child per week, instead of £50 plus per child for yer unemployed 'single' mother and £12 for the second and subsequent children of a normal working family.

* See page 86 of HMRC's Trust Statement for 2008-09 and add on £2 billion for overpayments, fraud and error and administration.