6 Engaging with the State
80. Zero hours contracts can result
in an individual having irregular hours of work. The consequent
fluctuation in earnings can create uncertainty for workers, both
in terms of their future earnings and benefit entitlement.[136]
Zero hours workers often have difficulty claiming in-work and
out-of work benefits. Citizens Advice Scotland explained how "they
may have to submit information about changes of circumstances
on a weekly basis, and manage Jobseeker's Allowance and Working
Tax Credit claims interchangeably".[137]
Unite's survey found that one in four people on zero hours contracts
had difficulty claiming benefits-this figure was higher for women,
with one in three affected.[138]
Working Tax Credit
81. Working Tax Credit for a single
person can only be claimed if an individual is in paid work of
at least 16 or 30 hours depending on their circumstances.[139]
To be eligible for Jobseeker's Allowance an individual must work
less than 16 hours per week. Having fluctuating hours and income
can make it difficult to calculate Working Tax Credit entitlement
and can also mean claimants shifting frequently between Jobseeker's
Allowance and Working Tax Credit-that these benefits are administered
by different departments (DWP and HMRC respectively) adds to the
administrative complexity faced by zero hours workers.
82. Working Tax Credit is paid retrospectively;
this can lead to individuals receiving benefit at its highest
when they earn the most and at its lowest when they earn very
little.[140] In weeks
of no income, zero hours workers can find it is several weeks
before they receive a benefit payment (if they are permitted to
claim). Citizens Advice Scotland also point out that,
if one works between 16 and 20 hours,
and those hours fluctuate, it is likely that one's income will
be very low-potentially lower than those in receipt of out of
work benefits.[141]
Zero hours contracts particularly affect
young people - one in three zero hours workers is under 25. Working
Tax Credit is only payable to individuals over 25 years, meaning
a large number of zero hours workers, who will likely be on low
incomes, are unable to top-up their income with tax credits.[142]
Jobseeker's Allowance
83. A Freedom of Information request
by TheGuardian in April 2013 revealed that, for the six
months leading up to April, 27% of Jobcentre Plus advertised vacancies
had no guaranteed income.[143]
Citizens Advice Scotland report that job seekers "may be
pressurised into taking zero hours contracts, despite the working
hours, pay, and instability of the contract being inappropriate
for their situation."[144]
They also state that some clients have been told by Jobcentre
Plus staff that, if a zero hours contract does not provide any
work, they are unable to claim Jobseeker's Allowance because "having
a contract of employment implies they are not available for work
or actively seeking it, despite the lack of any income".[145]
If an individual wishes to leave their zero hours contract, for
example if that contract is not providing any work, they can be
at risk of being sanctioned when trying to claim Jobseeker's Allowance.[146]
| Box 15: Retail worker
A West of Scotland CAB reports of a client who came in with several mobile phone debts. However, early in the conversation it transpired he had no income. The client has a zero hours contract working in a department store. However, he has had no work and thus no income for some time. He had been to Job Centre Plus to ask about Jobseeker's Allowance for the weeks he did not get any work. They informed him that he was not eligible for Jobseeker's Allowance - as he had a contract for work and it would not be possible to give him Jobseeker's Allowance for the times he was not earning. The client was advised that there was a possibility that if he withdrew voluntarily from his contract and then applied for Jobseeker's Allowance he could be sanctioned for 13 weeks.
Source: Anonymous (Citizens Advice Scotland written evidence)
|
84. In response to challenge by Citizens
Advice, the Department for Work and Pensions confirmed that job
seekers will not be required to accept work which does not offer
a secure contract with a defined minimum number of hours per week
and that individuals would not besanctioned for leaving a zero
hours contract.[147]
The confirmation is welcome, but evidence from Citizens Advice
suggests that not all Jobcentre Plus staff are aware of the Government
policy in this area.[148]
It is also not always clear to the job seeker what the contractual
obligations of a position might be until they accept the offer
of work, as Rob Gowans, Policy Officer at Citizens Advice Scotland
explained:
We have seen a couple of cases where
people have not found out until they are working that they are
on a zero hours contract. There is one client that was told at
interview that he was guaranteed 30 hours a week but when his
contract came for him to sign it was a zero hours contract, which
did not come until three weeks after he had started.[149]
85. The Government must do more to
ensure that Jobcentre Plus staff are aware of, and follow, the
rules regarding zero hours contracts. The employment terms of
a vacancy must be made clear to a Job Seeker and, if the vacancy
is an offer of insecure employment, the individual must be allowed
to reject it without facing sanction. Individuals must also be
allowed to leave zero hours contracts which do not provide sufficient
work without facing sanction for doing so. Jobcentre Plus staff
should be putting people into permanent employment not pushing
them into exploitative working conditions.
Housing
86. We have already discussed the difficulties
zero hours workers may face in trying to budget for the present
and plan for the future. Housing can be a particular problem;
zero hours workers may find it difficult to rent in the private
sector because landlords may regard them as at risk of rent default
if they have no guaranteed income.[150]
Rapidly signing on and off Jobseeker's Allowance can also affect
claims for Housing Benefit and Council Tax Reductions as it takes
time for changes of circumstances to be passed between the DWP
and local authorities.
87. Justine Seran explained that in
order to receive a reduction in council tax she had to inform
Edinburgh Council of every change of earnings, "this means
that every month I will have to go back to Edinburgh Council and
give my new payslip for the month because it is going to be different
every month."[151]
Citizens Advice Scotland told us:
Delays in Housing Benefit payments,
coupled with the Local Housing Allowance and under-occupancy changes,
mean that tenants are at risk of accumulating rent arrears, or
having to choose between paying rent, buying food and heating
their homes.[152]
Universal Credit
88. Universal Credit will see six separate
benefits rolled into a single payment. The Government claims that
its introduction will help people with a fluctuating income such
as workers on zero hours contracts:
Regarding benefits, the introduction
of Universal Credit will help to address uncertainty. It is an
integrated in-and out-of work benefit, so people who move into
work will continue to be entitled, until they earn enough to come
off benefits completely. Universal Credit will be based on real-time
information about how much people earn, so there is a much lower
risk of any over- or under- payment.[153]
Under Universal Credit workers will
not have to claim different benefits as their hours fluctuate
and they will not have to re-sign on. However, the Government's
view of the benefit of Universal Credit to zero hours workers
is contested. BECTU[154]
suggest the difficulties in calculating benefits "will become
much worse with the roll out of Universal Credit, with its four-week
reference period, and conditionality that obliges claimants on
low hours to seek, and accept, more work."[155]
The move from fortnightly to monthly payment in arrears could
impact disproportionately on low-paid zero hours workers who already
have difficulty budgeting. The TUC also point out that:
With the introduction of universal
credit, zero hours workers on low incomes may be placed under
increased pressure to look for additional work, even though they
have no control over the number of working hours they are allocated
by employers.[156]
89. We are concerned that Universal
Credit might not be as beneficial to zero hours workers as the
Government suggests. In response to this Report, the Government
must set out the advantages and disadvantages of Universal Credit
to workers with a fluctuating income.
Administering benefits
90. Jobcentre Plus are responsible for
administering Jobseeker's Allowance, HMRC for Working Tax Credits
and local authorities for housing benefit and council tax reductions.
The amount of benefit that an individual may be eligible for depends
on their level of income over a specified period-this is particularly
complicated for zero hours workers whose hours of work may change
from one week to another. Zero hours workers can find themselves
regularly having to report changes in their income to a number
of different government bodies and their benefit payments can
be delayed as a result.[157]The
Government must make sure that staff who are responsible for administering
benefits are aware of the specific problems faced by zero hours
workers. Staff in Jobcentre Plus, HMRC and local authorities must
be able to respond quickly to reported changes in earnings so
that individuals can receive their benefit payments at the time
when they need them most.
136 Department for Business, Innovation and Skills,
Consultation: zero hours employment contracts, December 2013 Back
137
Citizens Advice Scotland (ZHC003) Back
138
Unite the Union (ZHC005) Back
139
For an explanation of eligibility criteria see https://www.gov.uk/working-tax-credit/eligibility Back
140
Citizens Advice Press Release, Citizens Advice warns on zero hours,
9 July 2013 Back
141
Citizens Advice Scotland (ZHC003) Back
142
Citizens Advice Scotland (ZHC003) Back
143
Q98 Back
144
Citizens Advice Scotland (ZHC003) Back
145
Citizens Advice Scotland (ZHC003) Back
146
Citizens Advice Scotland (ZHC003). Back
147
Citizens Advice Scotland (ZHC003); DWP response to FoI request,
10 July 2013 Back
148
Citizens Advice Scotland (ZHC003) Back
149
Q269 Back
150
Citizens Advice Press Release, Citizens Advice warns on zero hours,
9 July 2013; Q380 Back
151
Q416 Back
152
Citizens Advice Scotland (ZHC003) Back
153
Department for Business, Innovation and Skills, Consultation: zero hours employment contracts,
December 2013, p17 Back
154
The Broadcasting Entertainment Cinematograph and Theatre Union
(BECTU) Back
155
BECTU, Response to government zero hours consultation, 14 March
2014 Back
156
TUC, Ending the abuse of zero hours contracts: TUC response to BIS consultation,
March 2014 Back
157
Citizens Advice Scotland (ZHC003) Back
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