The Incentives and Earned Privileges system determines which prisoners are entitled to privileges such as extra visits, the ability to earn more money in prison jobs and access to in-cell TV.
Under the current system, there are three levels: 'basic', 'standard' and 'enhanced. Each level has certain associated perks which are set by individual prisons but are broadly the same.
Prisoners currently start on 'standard' and may lose or gain a status based on their behaviour.
More top news
Dozens of plots have been thwarted since July 7, 2005, but are we any less vulnerable to terror attacks?
A teenager from Bradford who was indoctrinated with 'chilling' extremist views has been jailed for plotting to go to Syria to fight for IS.
Georgina Ferguson was on a carriage behind the one that was bombed. This is her very personal story of 7/7.