'Time to rethink benefit sanctions'

'Imagine that your income stopped suddenly tomorrow. Perhaps you would cope for a while, living on savings, running down the food in your kitchen cupboards, maybe making a few lifestyle changes that helped you save money. If someone else in your household were earning, you might be able to manage on their income for a while.


But imagine that you’d exhausted all of those options; if you are an adult of working age, you might reasonably expect that you could turn to the benefits system to give you some basic support. But now imagine that the very same benefits system actually brought about such circumstances. Where would you turn then? Is this what you would expect of a benefits system to which we contribute our taxes, to provide basic support for those who have no other form of income?'

The quotation above, and the title of this post, are both from a report published this month, by Church Action on Poverty, The Baptist Union of Great Britain, the United Reformed Church, the Church of Scotland, and the Church in Wales.

You can find the report yourself here:
http://www.church-poverty.org.uk/rethinksanctions/report/reportpdf

I'd strongly encourage you to read it. It's a thorough, well argued and well-researched criticism of the current sanctions regime.

In case you don't get a chance to study it in detail, here's a brief summary of some of the major points covered. This might also encourage you to download the full report.

If you want to know about the sanctions rules for Jobseeker's Allowance in detail, check out the relevant pages on Benefits Owl, which I've just rewritten and expanded: http://www.benefitsowl.info/JSA%20Sanctions.html

Increasing numbers of claimants are being sanctioned

Here's some numbers to conjure with:

• A million sanctions were imposed in 2014 (this compares to about 300,000 in 2000);
• 22% of Jobseekers receive at least one sanction during their time on benefit'
• 100 people a day who are classed as unfit to work due to mental health problems are sanctioned every day

Sanctions are frequently disproportionate to the issues that cause them

The report gives a hypothetical example from the department's own guidance to illustrate this:
'“Audrey attends the JCP [Jobcentre Plus] every other Thursday at 10am to sign a declaration.  On 25.10.12 she fails to attend to sign.  On  1.11.12 she attends to sign at her normal time saying she forgot to sign last week as she got muddled with her dates.  On 6.11.12 the DM [Decision Maker] determines that Audrey failed without good reason to participate in an interview as arranged to sign a declaration.  This is Audrey’s first failure.  A 4 week sanction is imposed.”
[Source: DWP Training Memo DMG 37/12]'
As the authors of the report point out, this is the first time "Audrey" has made a mistake, and was only in breach of her ageement for 7 days, but she loses her benefit for a month.

Here is a real example from the report:
'A 40 year old man from Glasgow was sanctioned for missing an appointment. A divorcee, he is a proud father who has worked for most of his life.  He now has no gas or electricity and has been reduced to shoplifting for food. While telling his story, shame, humiliation and desperation reduced him to tears.
[Source: Poverty Truth Commission]'

Sanctions disproportionately affect the most vulnerable

Sanctions are not now just applied to people who are expected to look for work. Claimants on Employment and Support Allowance are also at risk of sanctions, if they are in the work related activity group. As noted above, a hundred of such claimants, who are on ESA due to mental health problems, are sanctioned each day. Data in the report also appears to indicate, worryingly, that claimants with mental health problems form an increasing proportion of those sanctioned.

As the report observes:
'The most common reason for being sanctioned is that a person has been late or not turned up for a Work Programme appointment. For some the symptoms of their illness can be extreme tiredness, a lack of motivation, or an inability to face social situations. It is therefore not surprising that people experiencing these symptoms can find it very difficult to attend Work Programme appointments...Sanctioning such people is not a measured response to wilful misbehaviour. It is effectively punishing a person for the symptom of an illness, equivalent to sanctioning someone with a broken leg for limping.' 

Evidence compiled for the report indicates that sanctions have particularly severe consequences on young people not in education, employment, or training, care leavers, homeless people, single parents, and those experiencing domestic violence, as well as those with long-term health conditions.

It is not just the claimants themselves who suffer. Figures obtained via Freedom of Information requests show that around 100,000 children were affected by sanctions.

The report also argues that the sanctions system deliberately harms health. It refers to DWP guidance in which it is accepted that 'it would be usual for the normal healthy adult to suffer some deterioration in their health if they were without... essential items, such as food, clothing, heating, and accommodation or sufficient money to buy essential items for a period of two weeks' [i.e. due to sanctions]. I'm not sure this quite justifies the reports assertion: however, I think it can safely be said that the DWP is prepared to accept the health of claimants being harmed as a consequence of sanctions.

The provision of hardship payments for those on sanctions is inadequate

Although hardship payments are available, the report highlights a number of problems with these:

• Most people are unable to apply for them for the first two weeks, and frequently don't receive them for a further two weeks;
• Under the new Universal Credit rules hardship payments are loaned, recovered later by reducing benefit payments to 60% of normal.

Also (though this is not mentioned in the report) sanctions payments are much lower than normal benefit payments, typically 40% less for a single adult).

There is, in my opinion, an error in the report, as it states that claimants' have to ask friends and relatives for money before being considered for a hardship payment'. DWP Guidance makes it clear that this should not be required:

'Note: It is not considered reasonable to expect claimants to rely upon charities, such as food banks, increase debts by seeking credit or using or extending overdraft facilities, sell or pawn items to obtain cash, find cheaper housing or ask friends and family for help in order to meet their essential needs. Whilst claimants may be prepared to request such help there should be no requirement to do so and claimants should not be denied access to hardship payments if they don’t' [DMG Chapter 35 - Hardship (para 35212), emphasis mine]

Of course what actually happens is another matter.

There is very little evidence that sanctions are effective at getting people into work

'For every 100 sanctions imposed, 42 people will leave benefits but only 7 will enter work. There is not a clear picture of how the remaining 35 who leave benefit manage'

The report also notes that evidence does not show that the longer the sanction is, the better the effect of the claimant's ability to find work. If anything, analysis from the past suggests that longer sanctions results in claimants becoming 'disengaged and less likely to accept help'.

The regime's harshness is not evidence based

It's always interesting, when studying government initiatives, to look at the research and data that - at least notionally - underpins the changes. In this case, the report traces the origins of the changes to a research report by Professor Paul Gregg. The only problem is that the regime proposed by Gregg is manifestly a very different animal from what we actually have. He suggested a maximum sanction of one month (compared with the actual maximum of three years) and expected there to be less than 1000 one month sanctions per year (compare this with the actual figure for 2014 of 880,000).

I commend the Gregg report to you (I've attached a link below). It's thoughtful, carefully argued, and evidence based. Reading it is, however, a melancholy activity, given the differences between what it proposed and what is inflicted on claimants today.

And finally...

The report addresses a number of what it generously refers to as 'misunderstandings' about sanctions - assertions made by those who support the regime - and rebuts the assertions on a point by point basis.

I've done my best to give you a brief taster of what's included, but if you want to know more I highly recommend this authoritative, informed, and timely commentary.

If you want to know more about sanctions...

I've just given my pages on Jobseeker's Allowance sanctions an extensive rewrite: the information is now (certainly) more thorough and (possibly) clearer. Here it is: http://www.benefitsowl.info/JSA%20Sanctions.html


You might also want to look at some of the information sources of the report, as well as the report itself.

The report - "Time to rethink benefit sanctions" - can be found here:
http://www.church-poverty.org.uk/rethinksanctions/report/reportpdf
Church Action on Poverty: http://www.church-poverty.org.uk/

The source for a lot of the raw data in the report is here: http://www.methodist.org.uk/media/1440216/mental_health_and_sanctions_data_set.xlsx

The report also references the a briefing on sanctions statistics by the Child Poverty Action Group:
http://www.cpag.org.uk/sites/default/files/uploads/CPAG-14-11-Sanctions-Stats-Briefing-D-Webster-Nov-2014_0.pdf

The Gregg Report: http://webarchive.nationalarchives.gov.uk/20130128102031/http://www.dwp.gov.uk/docs/realisingpotential.pdf

Universal Credit expands to include some people with children...

...but don't get too excited.

Until now, only claimants without without children were able to claim  Universal Credit (and even then not in all places in the UK). This is no longer the case.

From 24th November, some claimants with children will be able to claim Universal Credit.

However, this will only apply to people who claim in the some districts of Chester, the Wirral, and Warrington. The actual postcode areas included* are:

• Chester: CH41, CH42, CH43, CH44, CH45, CH46, CH47, CH48, CH49, CH60, CH61, CH62 0 to CH62 9, and CH63.
• Warrington: WA1 and WA2; WA3 4 to WA3 7; WA4 and WA5; WA13 0; WA13 9.

Even in these areas, not all claimants with children or young people will be able to claim  Universal Credit. The main exceptions are claimants who are responsible for any children or young people get Disability Living Allowance or Personal Independence Payment, or are registered blind, or partially sighted.

All the other restrictions on who will be transferred from the 'old' to the UC systems still apply**.

For example, new claims for Universal Credit can only be made by people who are looking for work; in other words, people who would otherwise be claiming Jobseeker's Allowance. So single parents of children under 5 will still not be included (they are able to claim Income Support); nor will claimants who have a limited capability for work (they will still be claiming Employment and Support Allowance).

Another key exclusion is that people currently in receipt of tax credits will not be included. In practice, as far as I can see, this means that anyone who have had children for a while won't be affected, as - almost certainly - they will be getting Child Tax Credit already.

Putting all this together (and there are quite a few other restrictions I haven't touched on) the only people who will be moving onto the Universal Credit as a result of this new change are parents who have just had their first child, where one of the parents is just about to start looking for work. Who live in Chester, the Wirral, or Chester.

Having said all that, once a claimant is in the Universal Credit system they stay in the Universal Credit system, whatever their changes in circumstances.

In other Universal Credit news, the National Audit Office has published another critical report. The Independent notes that the NAO declined to agree with Iain Duncan Smith's assertion that the Universal Credit project is providing value for money.


"The National Audit Office has concluded that it is too early to determine if the Department for Work & Pensions will achieve value for money in its implementation of the Universal Credit programme.

The Department set out to transform the benefits system with Universal Credit and suffered early setbacks. Since the reset in early 2013, it has reduced the delivery risks by significantly extending its timetable for introducing Universal Credit and choosing a more expensive twin-track approach: the roll-out of its ‘live service’ (which uses pre-2013 IT assets), while at the same time developing its new ‘digital service’.

The DWP believes the additional costs of this approach are justified because it expects Universal Credit to achieve substantial benefits for society sooner and more safely. However, such potential benefits do not mean Universal Credit will be value for money regardless of how it is implemented and the cost of doing so."


The Independent also notes that the project "will not now be fully implemented by the end of 2019". As of a year ago, Duncan Smith was still insisting that the everything would be complete by 2017 (see, for example, my post from about a year ago: http://benefitsowl.blogspot.co.uk/2013/11/universal-credit-another-update.html).

In the meantime, I'll continue to do my best to keep you informed of progress.




*I've extracted this information (with some difficulty) from the following sources:
The Welfare Reform Act 2012 (Commencement No. 9, 11, 13 14, 16, 17 and 19 and Transitional and Transitory Provisions (Amendment)) Order 2014
The Welfare Reform Act 2012 (Commencement No. 17 and Transitional and Transitory Provisions) Order 2014
(Goodness me: if nothing else Universal Credit is providing plenty of employment for drafters of legislation. Universal Credit  has created an astonishing cobweb of legislative instruments.)

**For full details of these see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/377732/uc-families-questions-answers.pdf

Universal Credit expands in the north-west

On 29th April the government announced that 'the expansion of the full Universal Credit benefit to the rest of the north west of England will start in June': 
https://www.gov.uk/government/news/universal-credit-first-year-of-welfare-transformation-and-north-west-next-steps

But what does that really mean? and who will it affect?

(For detailed information about what Universal Credit is and how it works, check out http://www.benefitsowl.info/universal%20credit.html.)

What is the situation now?

At the moment, in the north-west of England, Universal Credit only affects people who live in the following local authority areas: Wigan, Warrington, Oldham, and Tameside. These are known as 'pathfinder areas'. 

However, even in these areas, only a fairly small subset of potential claimants need to worry about Universal Credit. Universal Credit is currently only available to single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim. 


What is happening from June?

From June this year Universal Credit will expand to cover claimants live in the areas covered by:

• Bolton Borough Council
• Bury Borough Council
• Cheshire East Council
• Cheshire West and Chester Council
• Knowsley Borough Council
• Preston City Council
• Salford City Council
• Sefton Borough Council
• South Ribble Borough Council
• St Helens Borough Council
• Trafford Borough Council
• Wirral Borough Council

(You might note that Manchester and Liverpool are missing from this list.)


These new areas will only be applying Universal Credit to the same group of claimants as in the earlier pathfinder areas, i.e. single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim. In effect, therefore, the roll out will initially only have an impact on single jobseekers who are not getting any other benefits at the moment.

For people living in the existing pathfinder areas - Wigan, Warrington, Oldham, and Tameside - the net will gradually be expanded to include some couples making new claims, according to the government's press release.

To get an up-to-date list of areas that are included check out https://www.gov.uk/universal-credit/eligibility

When you say 'from June'...

Well...

There are two important phrases in the government's press release: 

• 'from June more jobcentres across the north west of England will gradually come online each week until the whole region is covered'
• 'We are currently in discussion with the following 12 local authorities to be at the forefront of this next stage of expansion'

In other words this isn't going to happen overnight. But claimants in these areas still need to be ready for when it does.

I've commented on problems with the roll-out of Universal Credit in previous posts so I won't go on about them here. However I will mention that the most recent report [1] on the matter from Parliament's Work and Pensions Committee notes that as of December 2013 just 4,280 were claiming Universal Credit (paragraph 24) of a total estimated target of 7.7 million households (summary).

Discussion with local authorities is necessary, in particular, because Universal Credit includes payments for rent and so replaces Housing Benefit - a local authority administered benefit - for the claimants affected. Council Tax Support will continue to be administered by local authorities. So extensive liaison between the DWP and each local authority will plainly be necessary.

How will Universal Credit affect claimants?

It's crucial to understand that the introduction of Universal Credit brings with it two, very distinct, kinds of changes: 

1. Changes relating to what Universal Credit is;
2. Changes relating to how Universal Credit is administered.

The first kind of change is largely positive, or at least neutral, in terms of the effect upon claimants (at least in my opinion). For example:

• Claimants with no other income will receive just the same amount of money as they do now;
• Claimants who do have income other than earnings, or who have capital, will find that it is treated in the same way as it was before; 
• Claimants who have earned income will find that they will be able to keep much more of their earnings than they could with the 'old' means-tested benefits;
• There will no longer be a cut-off for claimants who work 16 hours or more hours per week.

The second kind of change, on the other hand, is likely to cause a lot of problems for a lot of people. The key changes are these:

• Most claimants will have to claim the benefit, and report changes, online;
• Claimants will be paid every calendar month, rather than every two weeks as at present;
• These monthly payments will include any help with rent, so claimants will normally be responsible for making sure that the right amount of money is passed onto their landlords at the right time..

I don't think you need me to spell out the likely consequences of this disturbing cocktail.

All this assumes, of course, that the DWP IT systems underlying Universal Credit work properly. The Work and Pensions Committee appears to have serious concerns about this (see their report, paras 34ff).

Will this be the end of Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA)?

Yes and no.

income based JSA and income based ESA will be abolished: they, like Housing Benefit, will be replaced by Universal Credit.

However contribution based JSA and contribution based ESA will remain (they will be renamed - initially - 'new style' JSA and ESA, and eventually just JSA and ESA). Therefore anyone who thinks that they may be entitled to contribution based JSA and is in a Universal Credit area should claim both. When I have a better idea of how this works in practice I will let you know.

In the meantime, if you want to know more about Universal Credit have a look at my website at http://www.benefitsowl.info/universal%20credit.html

Main sources and further reading

[1] Work and Pensions Committee - Fifth Report: Universal Credit implementation: monitoring DWP's performance in 2012-13 http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/1209/120902.htm

The Universal Credit (Transitional Provisions) Regulations 2013 No. 386 
http://www.dwp.gov.uk/docs/a14-6501.pdf

Advice for decision making: Chapter M1: Pathfinder Group - Claims for UC https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/288079/admm1.pdf 

The Universal Credit Regulations 2013 No. 376 http://www.dwp.gov.uk/docs/a14-6001.pdf

New requirements for jobseekers

This is a quick post to just flag up the changes: I'll comment on them properly soon.

Changes have been brought in today that affect two different groups of Jobseeker's Allowance claimants: 

• 'pre-work programme' claimants: i.e. relatively new claimants, who have not yet attended a work programme;
• people in 'long-term unemployment': in practice, those who have been unemployed for more than three years.

'Pre-work programme' claimants

(Source: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/302526/touchbase-apr14.pdf)

• Day one conditionality - this will require new claimants to show that they are looking for work from day one. In practice this means that they will need to set up an e-mail address, prepare a CV, and register on the Jobsmatch website. Although the government states that Jobseekers who do not claim online will be helped to do these things by a 'work coach', it is not clear (at least to me) how this will be help to claimants who are not IT literate. This requirement will be rolled out gradually between now and October 2014.
• Mandatory English language requirement - claimants (at first in England only) whose English skills are assessed as being below the required standard will be required to attend training to improve their skills. On the face of it this seems sensible, but only if the resources are available to enable this training to be provided properly.
• Quarterly work search interviews.
• Weekly work search reviews - These will be phased in for 50% of claimants between now and October 2014.

People who have been unemployed for more than three years

(Source: https://www.gov.uk/government/news/help-to-work-nationwide-drive-to-help-the-long-term-unemployed-into-work)

Claimants who are not in work after three years will be required to do one of the following:

• Attend the Jobcentre every day (normally at their own expense).
• Attend a 'community work placement' - i.e. work as a non-voluntary volunteer (the examples given by the government are 'gardening projects, running community cafes or even restoring historical sites and war memorials') - for 30 hours per week for 6 months (plus 4 hours per week supported jobsearching).
• Intensive Jobcentre support - for claimants with with 'multiple or complex barriers to work'.

Failure to comply with this will result in an initial sanction of 4 weeks, with a further sanction of 13 weeks for a second failure to comply.

I've already my opinions clear with regard to daily signing and community work placements in a previous post: http://benefitsowl.blogspot.co.uk/2013/10/conservative-party-conference.html

Unfortunately for the  government, many of the charities who might be expected to provide the community work have boycotted it - http://keepvolunteeringvoluntary.net/ . The Independent reports:

'The charities have noted that the maximum community service order that someone might receive if they were found guilty of drink-driving or assault is 300 hours, but claimants on six-month workfare schemes will have to work without pay for more than double this time.'

(http://www.independent.co.uk/news/uk/politics/jobless-mustsign-on-every-day-government-to-dock-money-from-longterm-unemployed-if-they-do-not-comply-9294586.html)

More on this soon...

 

EEA nationals - the changes summarised

You would have to be living in a closed monastic order not to aware of the furore about European migrants over the last few months, apparently precipitated by the removal of restrictions for Bulgarian and Romanian nationals on 1st January 2014. Whether the government was responding to public concern - as expressed in some parts of the media - or opinion was being shaped by a government agenda is not clear, at least to me, but what we can be certain of is that a lot of legal changes have been applied to European citizens in the UK.

I will try and hide my own opinions about all this for this post. My aim, instead, is to summarise the main details of all the different changes, and where all this leaves European Economic Area (EEA) migrants in the UK today when it comes to claiming social security benefits.

For a more detailed, and possibly more accessible, description, please read my web site pages on this subject, which have been subject to considerable reworking over the last few weeks:

http://www.benefitsowl.info/abroad-eea-cit.html for general information about the rules for EEA citizens in the UK

http://www.benefitsowl.info/abroad-eea-history.html for a brief history lesson covering developments for EEA citizens in the UK up to the present.

The changes I will be looking at are:

• Removal of restrictions for Bulgarian and Romanian nationals
• Three months residence requirement for Jobseeker's Allowance claimants
• Tougher rules for Jobseeker's Allowance claimants for EEA nationals
• Minimum earning threshold for EEA migrants
• Restrictions to Housing Benefit for some Jobseeker's Allowance claimants

First, though, in case you haven't got the time to check out those links, there are two key concepts you need to be aware of:

• 'Habitual residence': in essence, if a claimant come to the UK to live, they are generally barred from claiming means-tested benefits until the state is satisfied that they are really intending to stay here, and not just visit. This applies to UK citizens who have lived abroad as well as to EEA nationals. When a person has become habitually resident is decided as a case by case basis, but it normally takes between about one and three months.
• 'Right to reside': Since 2004, the UK government will not regard a person as being habitually resident unless they have a right to reside here. This lets British citizens off the hook, but is a real problem for people from the EEA. The rules setting out who has the right to reside are extraordinarily complex: however it's safe to say that, in general, workers do have this right, as freedom of movement for workers is enshrined in the original treaty setting up the European Union.

Note: in the rest of this post, when I write Jobseeker's Allowance you should take this to mean income based Jobseeker's Allowance unless otherwise stated. There are no restrictions on claiming contribution based Jobseeker's Allowance, but in general most recent migrants are not able to get this.

Removal of restrictions for Bulgarian and Romanian nationals

When these two countries joined the European Union on 1st January 2007 the UK got a special concession, or derogation, which allowed it to impose extra restrictions on people from these countries. The key right of freedom of movement for workers was, in effect, watered down. Romanians and Bulgarians could come here to work, but only in certain types of work and only in a strictly regulated way. They also were not allowed, in effect, to claim Jobseeker's Allowance and any other benefits that result from that (like Housing Benefit), until they had worked for at least a year (they were allowed to claim appropriate benefits if they were working, such as Child Benefit, Child Tax Credit, and Housing Benefit). 

EU law does not allow this kind of derogation to continue for more than 7 years, so the British government had no choice but to end the restrictions[1]. They therefore now have the same rights as citizens of other EEA member states.

From 1st January, therefore, Bulgarians and Romanians can take up any employment that's available, and, if they get a job but later lose it, they will be able to claim Jobseeker's Allowance. 

Had there been no other legal changes, they would also be able to claim Jobseeker's Allowance before they found their first job, but this is now not possible for EEA migrants anyway, as you will see.

Three months residence requirement for Jobseeker's Allowance claimants

From 1st January 2014 anyone claiming Jobseeker's Allowance will not be treated as habitually resident, and therefore unable to get Jobseeker's Allowance, until they have been in the UK for three months[2].

Although this change was presumably brought in as a reaction to the feared 'influx' of Bulgarian and Romanian jobseekers, it applies to all new entrants, including UK citizens who have been abroad for a while.

In practice, the effect of this change is likely to be marginal, as even under the previous rules it was not unusual to have to wait for three months to satisfy the habitual residence test anyway. 

Tougher rules for Jobseeker's Allowance claimants for EEA nationals

This is where is gets a bit tricky; partly because the underlying legislation is extraordinarily labyrinthine, and partly because (paradoxically) some of the key terms are very poorly defined. 

The government describes the changes as follows (from its press release):


'After 3 months [see above], migrants will also have to take a stronger, more robust test if they want to claim income-based JSA.

In order to pass the improved Habitual Residence Test migrants will have to answer more individually tailored questions, provide more detailed answers, and submit more evidence before they will be allowed to make a claim. For the first time, migrants will be asked about what efforts they have made to find work before coming to the UK and whether their English language skills will be a barrier to them finding employment.

If they pass the Habitual Residence Test, EEA jobseekers will then only be able to claim JSA for 6 months. After 6 months, only those who have compelling evidence that they have a genuine chance of finding work will be able to continue claiming.'


Frustratingly, none of the following aspects of this are laid out in the legislation[1]:

• details of the 'stronger, more robust,' test;
• what 'evidence' will be required;
• what evidence will be required to meet the threshold of 'compelling'. 

There are also a number of issues related to the distinction between people who are defined as jobseekers and those defined as workers who are 'involuntarily unemployed' (but are also jobseekers), and how people move between these definitions. This feeds into the new rules about Housing Benefit (see below).

Minimum earning threshold for EEA migrants

As stated in a previous post (http://benefitsowl.blogspot.co.uk/2014/02/a-busy-week-for-benefit-watchers-part-2.html) I actually disagree with some other commentators in that I think this is probably a change for the better.  The change may be a useful clarification, and doesn't, as the change is worded, restrict anyone's rights compared to what they were before. 


The clarification has not come in the form of any new law, but as a memo added to the Decision Makers Guide (Memo DMG 1/14). It uses something called the 'minimum earnings threshold', which is, broadly speaking, the amount you need to earn before you have to pay class one National Insurance Contributions (£153 for 2014/15). The guide says that if an employee or a self-employed person has been earning at least this for the three months before a claim for benefit is made they will 'automatically'  be considered a worker. If this test is not satisfied, the decision maker 'will need to examine each case as a whole, taking account of all circumstances, to determine whether the EEA national’s activity was genuine and effective'. This second bit is what the DWP was supposed to be doing with all EEA worker claimants anyway, before this memo.

So for people who have been earning above the minimum earnings threshold they can be certain that they will be treated as workers. Those who are earnings less will continue to be assessed as they were before.

Note that this guidance is unlikely to be applicable to people claiming Jobseeker's Allowance, Income Support, or Employment and Support Allowance, as they won't normally fit the rules for these benefits anyway, but will be relevant to claimants of Housing Benefit and Universal Credit.


Restrictions to Housing Benefit for some Jobseeker's Allowance claimants

This change comes in later than the others, on 1st April 2014.

The main effect of the new law is that although new EEA arrivals in the UK may be able to get Jobseeker's Allowance after three months, but even then they will not normally be entitled to Housing Benefit. On the other hand, an EEA resident in the UK who has been working, and then loses their job, will be able to get Housing Benefit with their new claim for Jobseeker's Allowance. 

That might seem reasonable enough (or perhaps not). But there is another problem, related to my final comments in the section on 'tougher rules...' above. 

The way in which the law preferentially targets newer arrivals is by removing access to Housing Benefit from 'plain' jobseekers, as opposed to workers who have become unemployed.  

This needs some explanation. The treaty of Rome, which created the then European Community, gave freedom of movement to workers. It also included the freedom to move between European countries to seek work. However subsequent European directives have made it clear that these two freedoms are not equal. The effect is that EU countries, such as the UK, have more obligations to workers than to work seekers. 

Furthermore, the EU requires that workers do not lose their 'worker' status for at least six months if they lose a job, provided that they register as a jobseeker. 

The upshot of all this is that people who claim Jobseeker's Allowance and want Housing Benefit will be able to get it if they are regarded as worker, and won't if they aren't.

But here's the thing. Ex-working jobseekers will not be able to have the 'worker' status indefinitely. In accordance with EU law anyone who was employed for less than a year does not have to be treated as worker after they have been off work for six months. They will then become an 'ordinary' jobseeker, and therefore lose the right to Housing Benefit. 

And even people who have worked for more than a year in the UK risk losing their right to Housing Benefit after six months unless they can 'provide compelling evidence that [they are] continuing to seek employment and [have] a genuine chance of being engaged'.

So we could be seeing people who have been in the UK a while, have taken up tenancies, and will lose their ability to get Housing Benefit if they are unemployed for too long.

I note that the legislation creating this restriction was neither referred to Parliament's Social Security Advisory Committee (SSAC), nor were the proposals sent out to consultation, as 'it appears to [the Secretary of State] that by reason of the urgency of the matter it is inexpedient to do so'. This is disturbing.

Conclusion

You might wonder why most of these changes seem to be targeted as jobseekers (and workers) and nobody else. The reason is simple. Most EEA migrants to the UK who are not in the labour market are not entitled to any income-based benefits already.

People in the labour market will need to get used to a regime where no benefits are available until they get work, and where they will not be able to rely on retaining benefits for more than six months of unemployment.

Having said that, some of the changes (the initial three month prohibition on claiming Jobseeker's Allowance, for example) are not as significant as they appear: it is hard to escape the feeling that they were introduced to give an impression of action.

Nevertheless the changes do matter, and people will undoubtedly experience hardship and anxiety because of them.

[1]  The Immigration (EEA)(Amendment)(No.2) Regulations 2013
[2] The Jobseeker's Allowance (Habitual Residence) Amendment Regulations 2013
[3] The Housing Benefit (Habitual Residence) Amendment Regulations 2014

Conservative Party Conference

The annual Conservative party conference makes its presence felt by pronouncements about benefit claimants, and this year has been no exception.

We've heard from George Osbourne, Chancellor [1], Iain Duncan Smith, Secretary of State for Social Security, and David Cameron (briefly). The first two focused mainly on jobseekers (i.e. claimants on Jobseeker's Allowance and, in some cases, Universal Credit). 

Osbourne and 'Help to Work'

Osbourne's full comments on this are as follows [2]:

"But what about the long term unemployed? Let us pledge here: We will not abandon them, as previous governments did. Today I can tell you about a new approach we’re calling Help to Work. For the first time, all long term unemployed people who are capable of work will be required to do something in return for their benefits, and to help them find work. They will do useful work putting something back into their community. Making meals for the elderly, clearing up litter, working for a local charity. Others will be made to attend the job centre every working day. And for those with underlying problems, like drug addiction and illiteracy, there will be an intensive regime of support. No one will be ignored or left without help. But no one will get something for nothing. Help to work – and in return work for the dole. Because a fair welfare system is fair to those who need it and fair to those who pay for it too."

The relevant DWP announcement is here:
https://www.gov.uk/government/news/help-to-work-scheme-announced-by-the-government

Before we go any further, I'd better contexualise the proposal amongst all the other schemes that currently exist. It's quite confusing...

At the moment, jobseekers are (normally) placed in the 'Work Programme'[3], in which contractors are required to provide a range of measures to help them find work. This programme lasts a maximum of two years. If a claimant does not comply with the requirements of the programme (for example, fails to apply for a job) they can be sanctioned, but they cannot be required to work for nothing. On the other hand claimants can be required to work for nothing as a 'Mandatory Work Activity'[4] for four week placements of up to 30 hours per week: they are 'expected to complete placements which are of benefit to the community, including helping charities or environmental projects'. Finally, in some areas there is also currently something called the 'Community Action Programme' which is in effect, a pilot for what  Osbourne is now talking about, and is also a sort of development of the Mandatory Work Activity but requires 26 week involvement. If you remember the case where a geology graduate was required to work at Poundland it might be helpful to know that she was on the Community Action Programme[5].

Having got that out of the way, we can also note that this isn't actually as new as it's being presented. In  July 2012 the Guardian reported[6] that Chris Grayling, Employment Minister, announced to extend the Community Action Programme across the country, calling it - then -  'support for the very long-term unemployed'.

Leaving aside the value judgements and self-praising included in the speech, what can be said about these proposals?

Jonathan Portes, director of the (left-leaning) National Institute of Economic and Social Research was interviewed on 30th September by Jeremy Vine for his Radio 2 show. His concern was that there was no strong evidential base that could justify the proposal (The scheme is likely to affect about 200,000 jobseekers and will cost £300 million). He noted that the DWP's own research review concluded that there was little evidence that 'workfare' schemes increased the chances of finding work. he also said that the information gained from the Community Action Programme was not supportive. Although some people did move off benefits while on the scheme, after the trial was over they were generally found to be back on benefits, and, indeed, some were now on sickness benefits. He was guardedly positive about the concept of intensive support for people with drug, alcohol, and literacy problems, but noted that any programme of this nature was certain to be expensive and that it was therefore unwise to roll it out without piloting it first. He emphasised that it would only be any use if it improved long-term prospects.

I would largely echo these comments. I also raise the following questions:

• How will clearing up litter, for instance, improve a claimant's chances of finding work?
• How will claimants be able to afford to attend a jobcentre every day, especially in rural areas?
• Which low-paid workers will lose their jobs so that jobseekers can carry out their roles for nothing?

Iain Duncan Smith - Mandatory Attendance Centres

The relevant part of Duncan Smith's speech is as follows [7]

"But today I want to tell you about those who are already showing early signs of not being able to commit to their obligation to work. Prior to the Work Programme we are going to pilot a Mandatory Attendance Centre where selected individuals will receive expert support and supervision while they search and apply for jobs – that is 9 o’clock  to 5 o’clock – 35 hours a week – for up to six months, simulating the working day. These pilots will be targeted at claimants who will benefit from the intensive support - one pilot before the Work  Programme and one for after the Work Programme."

His comments have been accompanied by a DWP press release:
https://www.gov.uk/government/news/claimants-required-to-undertake-supervised-jobsearch-at-new-centres

Note that what is being proposed is a pilot, though no doubt it will be eventually rolled out across the country irrespective of whether it turns out to be helpful or not.

Note also that claimants will be required to attend 5 full days a week for up to six months: again, how will claimants afford the accompanying transport costs?

Duncan Smith was asked about the transport cost issue on Radio 4's the World at One on 01/10/2013. His response was that, firstly, claimants could seek help from the flexible support fund (the FSF)(although they couldn't guarantee that they would all be helped), and that, secondly, the Attendance Centres would be close to where claimants lived. There doesn't seem to be much information available about the FSF, including how big it is, as a Parliamentary Briefing note plaintively observes [8], but I'll be very surprised if the majority of claimants who incur travel costs get them met. And we don't have any details on how close is 'close'.

Actually I have some sympathy with the concept here. It is based on the understanding that jobseekers are not all the same. Some have no experience of the world of work: of coming in at the same time, day after day, of being subject to authority, of not being able to call your time your own. And without this experience, forcing them to take jobs is likely to be futile. And I accept that there are difficult questions about failure to engage, and about whether and how compulsion is appropriate. But in order for this kind of scheme to work, and not simply to be a way to remove people from benefit, the balance between support and compulsion would have to be vastly different from what it is almost certain to be.

David Cameron - young people

These comments[9] were brief, in a long speech, and are not linked to any proposals: but they suggest some worrying (though not totally surprising) changes are on the horizon. 


"There are still over a million young people not in education, employment, or training. Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits.
It’s time for bold action here. We should ask, as we write our next manifesto, if that option should really exist at all. Instead we should give young people a clear, positive choice: Go to school. Go to college. Do an apprenticeship. Get a job. But just choose the dole? We’ve got to offer them something better than that. And let no one paint ideas like this as callous. Think about it: with your children, would you dream of just leaving them to their own devices, not getting a job, not training, nothing?  
No – you’d nag and push and guide and do anything to get them on their way… and so must we. 
So this is what we want to see: everyone under 25 – earning or learning."


A few years ago young people and their advocates learned that Housing Benefit was to be restricted for people under 25. It looks like soon we'll be thinking of that as the good old days, as it appears that the government's intention is to remove all benefit entitlement to young people who are not in employment, education, or training.

A briefing to journalists after the speech made it clear that removal of Housing Benefit will be in the next Tory manifesto, and removal of other benefits may be in the manifesto.

I think no-one would disagree that an aspiration for all young people to be in work or learning is a positive one. The problem here is reality: what if there are no jobs; no suitable training? What if a young person has behavioural or attitudinal problems as a result of their upbringing?

I also don't accept Cameron's analogy: yes, a good parent would 'nag and push and guide', but if it didn't work out would a good parent throw their child out the door, without money, food, clothes?

Concluding thoughts

This isn't an original observation, but under all the data, proposals, and schemes what really disturbs me is the underlying world view. It is one in which there is a clear distinction between those who take from the community and those who contribute to it; between 'those who need it' and 'those who pay for it';  between the deserving and undeserving poor.

What about the bloke who has done the same kind of manual work for decades but is made redundant when the company closes down, and has none of the skills needed for the jobs available? Is he a shirker?

What about the young woman who spent her childhood caring for her disabled mother?  Perhaps her mother is in a home now, or dead. Is she just a freeloader?

And what about the young single mother with a one-year-old baby?

The bottom line, of course, is that although the rhetoric is about helping people and improving society, the reality is about balancing the government's books by targeting the most vulnerable rather than sharing the burden more fairly. And caricaturing claimants as people who want something for nothing sets them up against everyone else.

Tomorrow the benefit claimant could be me. Or you. Although, probably not Osbourne, Duncan Smith, or Cameron

Sources

[1] http://www.theguardian.com/society/2013/sep/30/george-osborne-jobless-benefit-conservatives
[2] http://www.conservativepartyconference.org.uk/Speeches/2013_George_Osborne.aspx
[3] http://www.dwp.gov.uk/supplying-dwp/what-we-buy/welfare-to-work-services/provider-guidance/work-programme-provider.shtml
[4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220276/eia-mandatory-work-activity.pdf
[5] http://www.independent.co.uk/news/uk/politics/governments-flagship-work-scheme-in-crisis-after-poundland-slavery-case-ruling-8492346.html
[6] http://www.theguardian.com/society/2012/jul/29/long-term-unemployed-unpaid-work
[7] http://www.conservativepartyconference.org.uk/Speeches/2013_Iain_Duncan_Smith.aspx
[8] http://www.parliament.uk/briefing-papers/SN06079
[9] http://www.conservativepartyconference.org.uk/Speeches/2013_David_Cameron.aspx

Zero hours contracts and jobseeking

There's a lot of discussion at the moment about 'zero hour contracts' -  employment contracts where there is no obligation on the employer to provide a guaranteed amount of work, or indeed any work at all, or sick pay or holiday pay. On the other hand, employees are often required to be available for work whenever the employer requires it, either explicitly (for instance at Buckingham Palace, Cineworld, and Sports Direct, according to a recent article in the Independent[1]), or implicitly, by favouring more flexible employees.

This isn't an employment blog, so isn't the place to examine the issues involved from an employment rights point of view.

However, the rise of zero contracts may have consequences for benefits claimants. There are two main areas where problems may arise?

(A) Will claimants be sanctioned if they fail to apply for zero hours jobs? 

Will Jobseeker's Allowance claimants be penalised if they refuse to apply for work, or turn down offers for work, from employers who are offering zero hour contracts only?

According to Hansard, the answer is a reassuring 'no'. In answer to a question put by Lord Greaves on 25th April this year, Lord Freud (Parliamentary Under-Secretary of State, Department for Work and Pensions) said:

'I can confirm that Jobseeker's Allowance claimants are not required to apply for zero hour contract vacancies.' [HL6759]

Well, that is encouraging. And, in general, answers given by DWP ministers normally both reflect, and inform, practice on the ground. 

However, the legal framework is a bit messy.

Until late 2012 it was very clear that there was not a problem. Regulation 72(5)(a) of the Jobseeker's Allowance Regulations 1996 made it explicit that a claimant would not be sanctioned if the position applied for provided less than 24 hours per week (or 16 hours per week in some circumstances). A zero hour contract cannot assure an employee of this, so claimants were clearly protected against having to apply for this kind of work . Unfortunately, from late 2012 onwards, new sanction rules have applied: regulation 72 of the Jobseeker's Allowance Regulations has been through some major surgery, and any reference to a minimum amount of work per week has now disappeared. There is, therefore, no explicit protection in law from being required to take on a zero hours contract. 

Fortunately the lack of clarity works both ways: there is nothing in the rules to say that zero hours contracts are not a good reason for refusing a job. I also note the guidance for DWP decision makers states that they may take into account any restrictions a claimant has been allowed to place on their work search[2]. This means it is very important that claimants try to get a minimum hours restriction included in their job search criteria, as this will make it harder for the Jobcentre Plus to argue with a refusal to work a zero hour contract.

(B) What if an employee is in a zero hours contract and it is unsustainable?

This is a bit more tricky. Again, a claimant has to show 'good reason' for leaving a job to avoid being sanctioned when they try to claim Jobseeker's Allowance. And, again, what counts as a good reason is not made clear.

Guidance to decision makers for the DWP [3] indicates that if a claimant knew about the conditions when they took a job but took it anyway, being unhappy with those conditions will not be a good reason for leaving. However I think it would be worth arguing against this, even if a person knew it was a zero hours contract at the outset, if they had an expectation of a certain amount of work, and this expectation was not satisfied.



At the moment we don't really know how this will develop, as zero hour contracts are a relatively new problem for most areas of the workforce, and also the new sanction rules have been in place for less than a year. If Lord Freud's statement turns out not to reflect how things are on the ground the situation will be deeply worrying: failure to apply for a job, or leaving a job voluntarily, attracts the highest level of sanction, which can be anything from 13 to 156 weeks depending on previous history.

If you have been sanctioned because of these issues, or know someone who has, please let me know.


If you want to know more general advice about Jobseeker's Allowance sanctions, have a look at my main website:

http://www.benefitsowl.info/JSA Sanctions.html




[1] http://www.independent.co.uk/news/uk/home-news/buckingham-palace-employs-summer-staff-on-zerohours-contracts-8739830.html  (31st July 2013)
[2] http://www.dwp.gov.uk/docs/admk2.pdf (paragraph K2151)
[3]http://www.dwp.gov.uk/docs/admk2.pdf (paragraph K2233)