Draft Jobseeker's Allowance (Sanctions) (Amendment) Regulations 2012
The Committee consisted of the following Members:
Alison Groves, Committee Clerk
† attended the Committee
Draft Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012
It is a pleasure to serve under your chairmanship this afternoon, Dr McCrea. The regulations were laid before the House on 9 July 2012, and if I may, I will begin by giving the Committee some context. When universal credit is introduced next year, it will include a new sanctions regime designed to provide great clarity for claimants and to ensure that there are robust, proportionate consequences for labour market failures, especially repeat failures. The existing sanctions regime does not reflect the seriousness of repeated non-compliance and the consequences of failing to comply with requirements are not always clear.
If someone fails to meet the most important requirements, such as refusing a job offer without good reason, they can currently be sanctioned for anything between one and 26 weeks. That means that claimants do not know in advance what the consequence of a failure to comply with their responsibilities will be, so the deterrent effect is reduced. Under the universal credit sanctions regime, claimants will be informed that if they fail to meet a requirement, without good reason, their benefit will be cut for a fixed period. For example, under the revised rules, the first time a claimant refuses a job offer without a good reason, they will know that they will get a 13-week sanction.
The new sanctions will play an important role in encouraging universal credit claimants to comply with requirements that will help them move into or prepare for work. We provide people with financial support when they are out of work; in return for that financial support, we expect them to do everything they can to get back into work. We know that compliance with requirements, such as active job search and engagement with advisers, increases the chance that people find work more quickly than they would otherwise.
Turning to the regulations, although the roll-out of universal credit will not begin until next year, we want to ensure that the key elements of the universal credit sanctions regime are introduced into the current systems as soon as possible, providing improved clarity and proportionate consequences for failure, thus better encouraging claimants back to work. Moreover, introducing the key elements into jobseeker’s allowance will ease the eventual transition to universal credit for both claimants and Jobcentre Plus staff. The regulations will therefore broadly align the jobseeker’s allowance sanctions regime with that for universal credit.
Let me give more detail on the sanctions regime. Under the revised regime, the length of the sanction period will depend on the nature of the failure. The most important work-related requirements will attract the longest sanction periods. Sanctions will also be tougher for those who repeatedly fail to meet their requirements, because the length of sanction will increase with each failure. The longest sanctions will apply to non-compliance with requirements directly linked to employment, such as leaving a job voluntarily, refusing to take up a job offer or failing to participate in mandatory work experience. For such failures, the sanction periods will be: 13 weeks for the first failure; 26 weeks for a second failure within a year of the previous one; and 156 weeks—3 years—for a third, or further, failure within a year of a previous failure that led to either a 26-week or 156-week sanction.
The three-year sanctions will apply only to claimants who have repeatedly and deliberately breached the most important requirements and who have not changed their behaviour after receiving previous sanctions. We will, though, ensure that claimants do not accumulate lengthy sanctions over a short period; multiple failures within a fortnight will not escalate with each failure.
Shorter sanctions will apply when a claimant fails to comply with a requirement that is designed to improve their chances of finding work or preparing for work, such as failing to attend an adviser interview at the jobcentre or to take part in a training scheme. The sanction for not meeting such requirements will be set at four weeks for a first failure and 13 weeks for a second or subsequent failure within a year of the previous one. Currently, there is a range of sanctions for those types of failure, including: one or two-week sanctions for failing to attend an interview at a jobcentre; two and four-week sanctions for other failures, such as failing to carry out a direction from an adviser; and 26-week sanctions for some claimants in the Work programme. The new sanctions system will clear away that complexity and provide greater clarity by directly linking expectations of what claimants must do to improve their prospects of finding work with what would happen if they do not meet their job search or work preparation requirements. The new sanctions will also apply after a claimant fails to comply with the basic jobseeker’s allowance requirements to be available for or actively seeking work. Failing to meet the conditions generally leads to disentitlement from jobseeker’s allowance. However, under the current regime, those who are disentitled for those reasons can reclaim straight away, and in some cases, lose only one or two days’ benefits.
In order to reinforce the importance of being available for and actively seeking work, and more effectively deter claimants from failing to comply with the requirements, those who reapply for benefits following disentitlement for those reasons will be subject to a new sanction of up to four weeks for the first failure, and up to 13 weeks for the second or any subsequent failure within 12 months of the previous disentitlement. Of course, we have no desire to penalise claimants for periods of time that they are not relying on state support. Therefore, if claimants delay in reclaiming jobseeker’s allowance, the period for which they are off benefits will be deducted from the remaining sanction duration.
While we are introducing a number of changes as a consequence of the regulations in preparation for universal credit, some things will not change. The amount of a
It is also important to note that the regulations will not make any changes to the requirements imposed on jobseekers. We will continue to tailor requirements to suit claimant circumstances, for example, to take into account caring responsibilities and mental or physical health conditions.
As under the current system, once a sanction has begun it will continue to run while a claimant is off benefits. That means that if, for example, a claimant with a 26-week sanction serves three weeks, then leaves jobseeker’s allowance and reclaims six weeks later, he must serve the remaining 17 weeks of the sanction period. However, we are introducing a new incentive for claimants to return to work, so that when they become re-entitled to jobseeker’s allowance after working for six months or more, the balance of any outstanding sanction is lifted.
Important safeguards from the existing regime will be carried forward. They include ensuring that claimants have the opportunity to explain why they have not complied with a requirement. Just as now, if they provide a good reason, a sanction will not be imposed. Claimants will still be able to request further information about the sanction decision, request a reconsideration and appeal against the decision.
In conclusion, by making the changes to the jobseeker’s allowance regulations, we will provide a clearer sanctions regime that is easily understood by those claiming and that provides appropriate consequences for those who do the wrong thing—those who choose to shirk their personal responsibilities and fail to take reasonable steps to support themselves through work. The change is intended to drive behaviour that maximises people’s chances of finding suitable work and be self-supporting.
Mrs Anne McGuire (Stirling) (Lab): I am delighted to be here under your chairmanship, Dr McCrea. I welcome the Minister to his new post and thank him for his comments. I also welcome the Government Whip to his post. He and I spent many an interesting hour on the Public Accounts Committee over a few months. He certainly was not silent there; I wonder how he will take the silence of the Whips Office. That is something for him to work out.
When the Welfare Reform Act 2012 was discussed in Committee—some of us here participated in that discussion—the Opposition voted against the introduction of a three-year sanction period under universal credit. The starting point of a Government’s employment strategy and benefits system ought to be twofold: will it lead to more people moving to work, and will it represent a good deal for the taxpayer? Sanctions are there to make it clear to claimants that the commitment they make to look for work is enforceable. I do not think that there is any great disagreement between the Government and
For people who simply do not want to work, a three-year sanction could perhaps be some motivation, but evidence suggests that such people are probably few. For people with severe disadvantages—perhaps undiagnosed mental health problems, addictions, homelessness issues or turbulent or dysfunctional home situations—the sanction will simply distance them from the jobs market even more. At the same time, it will distance them from the help that the jobcentre or Work programme can offer. It will also distance them from getting off benefits, improving their circumstances, and saving taxpayer’s money. It will plunge some, who all of us would agree ought to be supported by the system, into utter destitution. It is important to remember that a person who is sanctioned will cease to receive their £71 per week in jobseeker’s allowance or the universal credit standard allowance.
The Minister might say that it will not mean utter destitution for everyone. Many will continue to receive child tax credits and housing benefit, or their equivalents under universal credit, and unless we want a disturbing rise in homelessness and abject child poverty—punishing those who have not brought it on themselves—that must continue. The Department for Work and Pensions expects to spend £5.5 billion on jobseeker’s allowance this year, but over four times that amount—£23 billion—on housing benefit. Sanctioning someone and completely losing touch with them for up to three years means three years’ spending on benefits with no means to help that person to find work.
The Minister might argue that a claimant can still receive help from employment programmes, but there would be no financial incentive to do so. We pushed the previous Minister of State with responsibility for employment during the Committee on the Act to make it clear how a person could get back into the system during those three years. They did not make it clear then, and as a result, we voted against the provision. Since then, the Department has come forward with draft regulations on how the sanctions scheme will operate under universal credit. Those regulations offer some small consolation.
As the Minister indicated, sanctions can be lifted if a person moves into work for six months at above JSA hours level, and we welcome that slight shift. It is not clear from the regulations whether that provision extends to people receiving jobseeker’s allowance. It would seem unfair for that provision to be available in over a year’s time, but not now. Can the Minister clarify that point?
The provision I just mentioned goes some way to remedying the policy, but not that far. We still have a disastrous jobs market, despite modest improvements over recent weeks, and the type of person likely to be hit by the sanctions is likely to be some distance from finding a job anyway. Without back-to-work support, it may be impossible for them to get six months of work. We are again back to a situation in which a claimant potentially faces destitution while the taxpayer funds
We need a welfare state that takes advantage of the skills of all our citizens, rather than one that pays them to sit idle. Without the ability for people to prove their commitment to job seeking and lift the sanctions after a suitable period, the three-year sanction policy does not give us such a system, which is why we will not support it today in a Division.
The Minister will be delighted to know that we believe that there are positive measures in the regulations. They will simplify the variety of sanction periods and will lead to the timelier implementation of a benefit reduction, so that claimants can more easily identify the behaviour that led to the sanction. Often, the constituents we see in our offices have no idea why they have been sanctioned. That confusion leads to the sanctions regime being unable to achieve its aims. Of course, that is more likely to be a problem of communication with Jobcentre Plus than the nature of the sanctions. If the changes go some way to providing a remedy, that element is welcome.
Will the Minister update us on another debate that occurred during the passage of the 2012 Act that relates to the points I have just made? Last April, the then Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), discussed the issue of non-postal communication of sanctions with my hon. Friends the Members for Battersea (Jane Ellison) and for Westminster North (Karen Buck). They noted that in areas with high levels of houses in multiple occupation, such as theirs, a number of constituents had not received post from Jobcentre Plus notifying them of sanctions. I am sure that some of us have come across that in our own area. Those constituents’ reactions to their sanctions were again of confusion, not contrition. As they did not receive the first or the follow-up letter, or the letter advising them of the right to appeal, they also lost the opportunity to appeal against any sanctions that were imposed. With a three-year sanction on the table, I would suggest respectfully to the Minister that the matter is now of greater importance. There is nothing in what the Minister has said that will deal with that issue.
My hon. Friends suggested at the time that the DWP ought to consider issuing sanction notifications by text message or e-mail, and the previous Minister committed to see whether further steps could be taken to ensure that such messages are brought home in a way that meets the needs of individuals. Is the new Minister able to tell us whether any progress has been made on that point? I accept that he has been in his post for a little over a week, so he might want a bit of time to look at using different means of communication.
The Government wish to impose a range of sanctions, some of which are quite draconian. The three-year withdrawal of benefits is a draconian sanction—do not let anyone kid ourselves about that. To say that it is both proportionate and in the interests of clarity beggars belief. Yes, it will be clear that someone will have a sanction of up to three years if they do not do the business expected of them, but to use that as a justification for imposing a sanction that has been unheard of in our
Let me be clear that we support the sensible use of sanctions; we have no problem about that. We recognise their importance and expanded and extended them in government ourselves—we have a former Secretary of State for Work and Pensions sitting on the Opposition Benches today. The sanctions were used to encourage people to get back into work, but this provision will push people who are likely to be among the most vulnerable claimants away from support to get a job while they remain on other benefits. That does not make sense, and we are worried that for some, the regulations will usher in real and undeserved hardship. That is why we will vote against the measures this afternoon.
The right hon. Member for Stirling talked about the communication of sanctions. I would be grateful if the Minister could confirm that, in the interests of justice, people will be advised well in advance of any sanctions that might be awarded and what kind of behaviour might result in sanctions, not only when they sign on, but if they approach any sanction point.
I raise the case of one of my constituents who came to see me in a terrible bureaucratic pickle with the DWP because her post had been intercepted maliciously by a neighbour and as a result she had simply not been aware of her obligations—at least, as she told the story. How will we protect people who may well be, in certain kinds of housing, subject to abuse that is malicious or even illegal, as in the case of intercepting post? It is important that justice be served, and nobody should inadvertently find themselves subject to a three-year penalty.
I welcome the removal of the restriction on hardship payments. How does the Minister see that working in extremis if somebody finds themselves in that situation part way through a three-year sanction on their jobseeker’s allowance?
Richard Burden (Birmingham, Northfield) (Lab): I share all the concerns that my right hon. Friend the Member for Stirling has put to the Minister, and I want to ask the Minister to address a couple of other points. First, most of the discussion so far has understandably focused on the draconian nature of the maximum sanctions, but if I have read the regulations correctly they also increase the minimum sanction from one week to four. Although the Minister has said that the regulations are about clarity, it seems to me that a minimum sanction of one week is as clear as a minimum sanction of four weeks, so he must think that four weeks is more appropriate than one week. Why does he think that, and what evidence does he have to support his thinking?
Secondly, although there is a role for penalties, if the regulations are about more than just penalties—if they are about changing the behaviour of jobseekers—what research has been done to indicate that the change in
Fiona O'Donnell (East Lothian) (Lab): It is a pleasure to serve under your chairmanship, Dr McCrea. I welcome the questions that have been asked of the Minister so far, and I welcome the contribution of the right hon. Member for Stirling. In my constituency we are establishing a food bank, mainly because of the number of people presenting themselves at the citizens advice bureau who found that as a result of sanctions under the Work programme they were no longer able to put food on the table. There is widespread agreement across the Committee that we need to do something and that penalties must be in place, but I question whether we can starve people into work.
When I consider the prospect of setting someone a sanction of three years, I have to ask the Minister again what evidence he has that that will incentivise. What discussions has the Department had with the voluntary sector about the potential impact of such sanctions? The aim of the Trussell Trust, one of the country’s major leaders in the provision and establishment of food banks, is not to create dependency; it aims to provide food not on a long-term basis but simply in crisis situations. Has the Minister had any discussions with voluntary sector organisations about the likely impact of the sanctions? I look forward to his response.
Mr Hoban: I thank the right hon. Member for Stirling for her congratulations and assure her that my hon. Friend the Member for Orpington will adjust very well to the silence of the Whips Office. Perhaps that will create space for shyer, more reticent members of his family to speak up more in public discourse.
We are discussing an important matter, and it is important to put in perspective the three-year sanction regime and the circumstances in which it will apply. The sanction applies to the most serious of breaches, and the failure has to be repeated. Let me tell the Committee what those serious breaches are:
“Loses employment through misconduct…Leaves employment voluntarily without good reason…Refuses or fails to apply for, or accept if offered, a job which an employment officer has informed him is vacant or about to become vacant without good reason…Neglects to avail himself”
Those are breaches of the contract between the individual and the state at the most serious end of the scale—people who have left a job without good reason. Those are not minor breaches, and the sanctions apply in the most serious situations. The gravity of the fact—those people
Mrs McGuire: Will the Minister explain what “good reason” would be if the JSA claimant perhaps has a hidden mental health condition? There may be ample justification, from a personal point of view, for him or her to leave employment. How will the system assess and monitor that when the sanctions are quite significant?
Mr Hoban: First, the sanctions will apply over a long period of time. Someone would have had to turn down a job three times, for example, to get the longest sanction—that would be over quite an extended period of time. Also, in Jobcentre Plus, we have disability employment advisers; there are people who specialise in mental health and who identify such issues. There are mechanisms in place to address those issues, although the hon. Lady makes an important point. We need to remember that someone would have to turn down or have lost a job without good reason three times to qualify for the most serious sanction. For many people, that is a deterrent. I will come on to the evidence base.
Fiona O'Donnell: The Minister just said that there are mental health experts in Jobcentre Plus. I am not aware of any experts on mental health in Jobcentre Plus in my constituency. I am only aware that we have two mental health champions for the whole of Scotland. Can the Minister clarify what he means by a mental health expert?
Mr Hoban: Jobcentre Plus employs people to give advice on identifying the issues and on what support can be given, but the hon. Lady raises an important issue and we continue to look at the area. We cannot avoid the fact, however, that to qualify for such sanctions someone has to have left a job or turned down a job offer three times without good reason. The breaches of the rules are not casual ones; they are serious.
Mr Jim Cunningham (Coventry South) (Lab): I agree with what some of my colleagues have said. One of the things that eludes me—I hope that the Minister will answer—is something that I am sure most Members are aware of from their surgeries. We are talking about people with mental disabilities or general disabilities when there is a dispute as to what type of work they can do—there is always that area of dispute. How does the Minister plan to handle that, because it is not necessarily covered in the list he has just read out?
Mr Hoban: On mental health, we are continuing to revise the guidance that we give to staff and we will be publishing that guidance in due course, which will enable lobby groups and others to look at it to ensure that it is fit for purpose. Claimants can of course provide a doctor’s note—they would be able to provide the medical evidence to demonstrate their condition, in the same way that a claimant who applies for the employment and support allowance can provide such information. The opportunities are there to provide that data to ensure that an adviser knows about those conditions.
Mr Cunningham: I was not clear on that. I am talking about a dispute between the family doctor who thinks one thing about a patient—the person with the disabilities—and the Government, for want of a better term, who think another thing. In other words, the Government think that the person is suitable for a certain type of work but the family doctor does not. Who has the expertise in that area, to make that judgment?
Mr Hoban: I made the point in my speech that someone who is given a sanction can appeal—ultimately, of course, to a tribunal—so there is a process there if a defendant disagrees with the decision of Jobcentre Plus. I go back to the point that Opposition Members seem to be ignoring. The sanctions happen in the most serious cases. We should recognise that they relate only to the most serious breaches.
Mr Hoban: No, I want to make some progress. A number of issues were raised. I was asked why we are introducing a three-year sanction. As I said, it will apply only in the most extreme cases, where claimants have serially and deliberately breached their most important requirements, and where other sanctions have not worked to change behaviour. We anticipate that few claimants will be subject to this length of sanction, but we do believe it is necessary to act as a deterrent and to ensure compliance with the conditionality regime, which is critical to help these claimants back into work.
The right hon. Member for Stirling and the hon. Member for Birmingham, Northfield raised the question of effectiveness. Sanctions play a vital role in supporting the conditionality regime, getting claimants to comply with requirements that are designed to help them move into or prepare for work. We know that where sanctions are understood they have a positive impact on claimant behaviour. Research carried out by the Department in 2008 suggests that over half of claimants say they are more likely to look for work due to the threat of a sanction. Of those who are sanctioned, the vast majority receive just one sanction during their claim and most say they would not repeat the behaviour that led them to be sanctioned. Sanctions play an important role in driving engagement with the labour market. We are committed to working with claimants to overcome any barriers to engagement.
The right hon. Lady made a point about the Work programme. Where claimants do receive sanction they will continue to have access to employment support. It is important that the support is still there to help them get back into work. As I said in my remarks, someone subjected to a three-year sanction can effectively have that voided if they are in six-month employment. We still want to get people into work. They will also have access to that support.
Richard Burden: If I heard correctly, the evidence the Minister quoted proves the opposite case from the one he makes. He said that the evidence from research was that sanctions have an impact on incentivising work. I do not think anybody disagrees with that. He went on to back that up by saying that if people had one set of sanctions applied to them, presumably at the lower
Mr Hoban: The hon. Gentleman should think about what the sanction regime looks like at the moment. The levels of sanctions vary significantly and create uncertainty. They confuse claimants as to what the sanction is likely to be. Through these changes we are bringing clarity. Research a few years ago indicated that in some cases claimants did not realise they had been subject to a sanction. That suggests a lack of clarity and certainty about the sanctions regime that we seek to change.
The hon. Gentleman talked about increasing the sanctions from one to four weeks. He should also recognise that in some situations we have reduced the maximum sanction. So it works both ways; it is not a one-way bet. Sanctions are effective, as the research shows. I cannot remember whether the right hon. Member for Oxford East was the Secretary of State when that work was done.
Mrs McGuire: If the Minister is using as the basis for his argument research done in 2008, when the Welfare Reform Act was going through, he still has not explained to the Committee why, if that sanction regime operated within a 26-week profile, he is increasing the level of sanctions. If this is to be anything other than punitive—he has admitted that the research says that the current regime alters behaviour—why is he increasing the level of sanctions to such an enormous degree?
Mr Hoban: The hon. Lady does not get to grips with the current sanctions regime. The sanction at the moment for the highest level offences can vary between one week and 26 weeks. We are introducing a 13-week sanction; only on the second failure does the sanction go to the maximum 26 weeks. We are bringing consistency and clarity to a regime that in the past lacked credibility. That is the change we are making. It is much better for claimants to know exactly what sanction they are likely to get if they breach one of the rules, than for them to be unclear, as they are at the moment, about what will happen if they turn down a job offer.
Mrs McGuire: I will give the Minister a solution that does not cost any money. If he thinks that the current system lacks clarity, why does he not just clarify it, instead of moving to what many of us regard as a punitive regime that is not about simply changing behaviour?
Mr Hoban: We can see a very clear regime. Rather than the current variable regime for the highest level of breach, with sanctions that can be between one week and 26 weeks, we are introducing a 13-week period for the first breach and a 26-week period for the second.
We do not want people to trigger the highest sanction. We want, as we should all want, them to get the support that they need to get into work. It is not about being punitive, but about ensuring that there is a credible and effective deterrent, which the current system does not have in place. The evidence clearly demonstrates that sanctions play an important role in encouraging more people to look for work.
My hon. Friend the Member for Wycombe asked about the hardship regime. Claimants will be able to apply for hardship. The regime will be different under the universal credit system, but we are not making substantial changes to the system for JSA. I hope that that reassures him. As now, claimants who apply for hardship can receive 60% of their JSA, so that recognition is in the system.
We also discussed communicating the sanction decision to claimants. My hon. Friend mentioned someone whose post was interfered with. Claimants are always informed of their obligations and the consequences at their fortnightly interview, so we are not relying only on post. The jobseeker’s agreement will set out the sanctions regime and a new factsheet and leaflet, which are being developed, will be provided to the claimant in advance of the changes. Exactly what happens in different situations should be clear to the claimant up front. I appreciate that this is a difficult area, but we are putting in place a clear and proportionate regime.
Fiona O'Donnell: I am not sure whether the Minister will cover this point in his conclusion, but I asked him whether he or his predecessor had had any discussion with the voluntary sector about the impact of the length of the sanctions.
Mr Hoban: I have done many things over the past week and had many discussions, but I have not had those discussions with the voluntary sector yet. I cannot speak for my right hon. Friend the Secretary of State for Justice. We have engaged in public debate on this; the right hon. Member for Stirling referred to the
It is important to ensure that the sanctions regime is clear and credible. The previous regime lacked clarity. It was variable and uncertain, and it did not send clear messages to claimants. In advance of the introduction of universal credit, we have sought to bring in much clearer sanctions and rules. It is to the benefit of claimants to know what will happen if they break the rules. The changes also ensure that important safeguards in the existing regime continue in the regime that we will put in place. I encourage my hon. Friends to support the regulations.