Benefit sanctions policy beyond the Oakley Review - Work and Pensions Contents

7  Mitigating the risks of severe financial hardship and associated health impacts

136. A number of reports, including the 2008 Gregg Review of benefit conditionality for the last Labour government and the Oakley Review, have emphasised that in order to be effective any system of benefit sanctions must be proportionate and mitigate the risks of severe financial hardship.[160] In this chapter we examine the system currently in place to mitigate the risks of benefit sanctions leading to severe financial hardship, food poverty and associated health impacts.

Link with food poverty

137. As noted in the introduction to this Report, we previously drew attention to largely qualitative evidence that benefit sanctions were a significant contributory factor to a recent rise in referrals to voluntary sector food aid. In January 2014 we recommended that:

[…] DWP take urgent steps to monitor the extent of financial hardship caused by benefit sanctions, including by collecting, collating and publishing data on the number of claimants "signposted" to food aid by Jobcentres and the reasons for claimants' need for assistance in these cases.[161]

In its response to our Report the Department stated that it would "continue to monitor sanctions policy on an on-going basis and collect customer feedback wherever appropriate"; however, it rejected our recommendation because, "The use of food banks is not exclusive to benefit claimants and Jobcentres have no part in deciding whether support is provided."[162]

138. A number of more recent reports have concluded that there is likely to be a causal link between benefit sanctions and food poverty; although it should be noted that there are considerable difficulties in disentangling the impacts of sanctions from the range of benefit-related issues and, in the absence of any official statistics, much of the data on food bank use relies on self-reporting of the reasons for referrals.

139. A November 2014 joint report by CPAG, the Church of England, Oxfam GB and The Trussell Trust, which runs a national network of food banks, set out the findings of research undertaken in 2013-14. The research project examined "why people are turning to food banks, how food bank use fits with their wider coping strategies, and what might be done to reduce the need that leads to food bank use." It consisted of in-depth interviews with 40 food bank users at seven locations in The Trussell Trust's network; collection of additional administrative data from over 900 food bank users, "capturing further detail on the demographic profile of food bank users and their reasons for referral"; and in-depth caseload analysis by a CPAG welfare rights adviser based at Tower Hamlets Foodbank. It reported that sanctions "featured strongly" in the in-depth interviews about participants' given reasons for food bank use. Administrative data indicated that around 20-30% of food bank users were subject to a benefit sanction, with variations in rates across the country (19% in Tower Hamlets; 23% in Epsom and Ewell; and 28% in County Durham, for example).[163] The APPG on Hunger in the UK came to similar conclusions; it found that "between one sixth and one quarter of food bank referrals may result directly from the application of sanctions."[164]

140. It should however be noted that the Oakley Review stated that "the existing evidence […] suggests that claimants can lack understanding of when a sanction has been applied". It cited an evaluation of Jobcentre Plus which found that, while 28% of claimants said that their benefit had been stopped or reduced, the administrative data showed that only 11% had actually received a sanction; and, in contrast, that only half of those recorded in administrative data as having been sanctioned confirmed in the survey that their benefit had been stopped or reduced. It also cited earlier research which highlighted "poor claimant understanding of exactly how much their usual benefit payment should be", which resulted in claimants having difficulty in assessing when a sanction had been imposed.[165]

141. We note with concern claimants' uncertainty over whether a sanction has been applied which, as the Oakley Review highlighted, has arisen in large part because of poor communication from DWP. Such confusion can often feed through to self-reported statistics about the role benefit sanctions may play in the requirement for emergency food aid, potentially leading to false conclusions being drawn. We recommend that DWP carry out further work with the Behavioural Insights Unit to ensure that claimants understand their position within the benefits system, their underlying entitlements and, when changes to their benefit payments occur, what the reasons are for this.

Hardship payments

142. DWP administers a system of discretionary hardship payments, which are payable to claimants subject to a benefit sanction, where the claimant can demonstrate that they would be at risk of severe hardship—to the extent of being unable to afford essential items such as food, clothing, heating and accommodation—if no payment were made. Discretionary JSA and ESA hardship payments are non-recoverable.


143. JSA hardship payments are 60% of the claimant's JSA personal allowance, or 80% where the claimant, or a member of their household, is pregnant or "seriously ill".[166] They are typically payable from the 15th day of a benefit sanction period. Where the claimant can prove that they are at risk of severe hardship and that they are a member of a vulnerable group, they may receive hardship payments from day one of a sanction period. Vulnerable groups are defined as follows:

·  Pregnant claimants and their partners;

·  Those with responsibility for a child under the age of 16;

·  Where the JSA payment includes a disability premium;

·  Where the claimant, or their partner, has a chronic medical condition;

·  Where the Claimant, or their partner, is caring for someone who receives: Attendance Allowance; Disability Living Allowance care component at middle or higher rate; or either rate of Personal Independence Payment daily living component;

·  16-17 year olds; and

·  Those under 21 years old who were being cared for by a local authority within the last three years.


144. Where ESA claimants are subject to a sanction, and they can prove that they are at risk of severe financial hardship, as defined above, hardship payments of 60% of the ESA personal allowance are payable from day one of a sanction period.[167]

Adequacy of the hardship payment system

145. Many witnesses were concerned that standard JSA hardship payments were not payable until day 15 of a sanction period.[168] Chris Mould, Chairman of the The Trussell Trust, told us that "it is very difficult to feed yourself and your family with no money over that two week period."[169] Some witnesses pointed out that this was particularly the case where claimants were already struggling financially, before a sanction was applied.[170] A number of witnesses also reported that awareness of the availability of hardship payments was low. Some believed that hardship payments were not widely advertised by DWP.[171] Witnesses also told us that the process for applying for hardship payments was onerous and might deter more vulnerable claimants from applying.[172] Alison Garnham of CPAG said that "in order to get one, you have to attend in person at a Jobcentre Plus office and fill in a 10-page form."[173] One advice service reported that it had taken "a number of weeks" to secure a hardship payment for a homeless claimant.[174]

146. The Department emphasised that it had recently taken a number of actions to improve the hardship payment system, partly in response to the Oakley Review. The letter templates and examples of fact-sheets which DWP provided all mentioned the availability of hardship payments, and the fact-sheets included information on how to apply. The Department stated:

We have improved the hardship payment process so that no one is sanctioned without being told about hardship payments. We have sped up the hardship payments process across our Contact Centres, Jobcentres and Benefit Processing sites to ensure claimants receive payment within three days of representation, where appropriate. This commenced on 14 July 2014.[175]


147. DWP confirmed that hardship payments are available to sanctioned Universal Credit claimants, who "can apply […] as soon as they receive a reduced payment". It also confirmed that "where possible" the hardship payment is made "on the day the application is accepted."[176] However, a number of witnesses were concerned that, unlike JSA and ESA hardship payments, DWP can in some circumstances recover Universal Credit hardship payments once the sanction period has ended, by deducting amounts from future benefit payments, subject to some exceptions.[177] Witnesses were concerned that this was likely to exacerbate claimants' existing financial problems. [178]


148. DWP told us that the "vast majority" of claimants who apply for hardship payments receive them, but there is no up to date official data on the number of applications or payments made, or on the number or proportion of hardship payments made to vulnerable claimants, from day one of a sanction period.[179] In response to a recent Parliamentary Question about the number of hardship payments made to sanctioned benefit claimants, the Department set out figures for 2010-11, which showed that 64,000 payments were granted.[180] The Department told us that it was not able to provide more recent statistics, as it was currently "validating the figures". It was not able to confirm when more up to date information would be published.[181] After our inquiry had concluded the Minister stated that DWP intends to publish updated figures in May 2015.[182]

149. The improvements DWP has made to its systems and communications should ensure that all claimants are aware of the potential availability of hardship payments, and have sped up the hardship payment application and decision-making process. Despite this some people who would qualify are still not applying for a variety of reasons. Furthermore, there is widespread concern that DWP's system of discretionary hardship payments does not prevent severe financial hardship in all cases, often because JSA hardship payments are not typically available until the 15th day of a sanction period. We believe that changes to the system are required to ensure that the risks of severe financial hardship are more comprehensively mitigated. There should also be signposting for, and access to, welfare advice support.

150. We recommend that DWP make hardship payments available from day one of a sanction period in all cases, including JSA. We further recommend that, where the claimant has dependent children or is a member of a vulnerable group, the hardship payment decision-making process be instigated by DWP Decision Makers, and coordinated with the decision on the sanction referral itself, regardless of whether the claimant has proactively applied for a hardship payment. The fact that in January 2015 the most recent data on hardship payments were from 2010-11, and those data were only made available in response to a Parliamentary Question, is highly regrettable, particularly given that this has been a period of significant change in the sanctions regime. It should not take four years to gather and validate such data. We therefore also recommend that DWP publish, on at least an annual basis, official data on the number of applications for hardship payments made by sanctioned claimants; the number of hardship payments made; and the number which were made on day one of a sanction period.

Adverse health impacts of sanctioning

151. Dr Kayleigh Garthwaite described findings from the University of Durham's recent ethnographic study of food bank users in Stockton-On-Tees. The study found that people using food banks were "likely to be living with already fairly long-term financial problems […]." Where people in these situations were sanctioned, "these problems are aggravated further". A number of people in this situation in Stockton were "going without sufficient food […] to maintain their health." Dr Garthwaite emphasised that there was evidence that both physical and mental health were adversely affected by benefit sanctions.[183]


152. Concern has been expressed in the media and elsewhere, linking sanctions and other benefit-related problems to the deaths of a number of claimants.[184] It has previously been reported that DWP has carried out "60 peer reviews following the death of a customer" since February 2012.[185] DWP guidance states that "peer reviews"—internal reviews of "whether [DWP's] local and national standards have been followed or need to be revised/improved"—must be carried out where "suicide is associated with DWP activity". Peer reviews may also be conducted where complaints have been made about DWP's treatment of vulnerable claimants, or those with complex needs.[186]

153. DWP confirmed that it had conducted 49 peer reviews of cases involving the death of a claimant, but the Minister was not able to specify in how many a benefit sanction was involved. It was recently reported that 40 of the 49 cases involved a suicide.[187] Chris Hayes said:

[…] we would look very carefully at any case of this severity to make sure that all the procedures were followed. Directly relating sanctions to someone's death is quite a big leap of logic, because these cases are people who are in very severe and vulnerable conditions and the circumstances have a number of causes. We need to make sure we have systems to protect vulnerable people, both in terms of providing hardship [payments], where that is appropriate, but also in terms of setting the right sorts of conditions and providing the right sort of care […].[188]

He told us that DWP had found "no particular case" in which a "benefit sanction alone" had directly led to the death of a benefit claimant.[189] A recent DWP Freedom of Information response stated that 33 of the 49 peer review cases resulted in recommendations for consideration at either national or local level.[190]

154. It is right that the Department investigates all deaths of claimants resulting from suicide, and other deaths of vulnerable claimants with complex needs, through a system of "peer reviews". We fully appreciate that in such cases there are likely to be multiple and complex factors involved. We understand that DWP has undertaken 49 peer reviews since February 2012, and that in 33 cases these resulted in recommendations for consideration at either national or local level. We ask that the Department set out the number of peer review cases where the claimant was subject to a benefit sanction at the time of death and the results of any such reviews in terms of policy changes. In addition, DWP should seek to establish a body modelled on the Independent Police Complaints Commission, to conduct reviews, at the request of relatives, or automatically where no living relative remains, in all instances where an individual on an out-of-work working-age benefit dies whilst in receipt of that benefit. Such a model, operated within the purview of the Parliamentary and Health Service Ombudsman, should ensure that the role of all publicly-funded agencies involved in the provision of services or benefits to the individual is scrutinised, so that a learning document can be produced setting out how policy, and the service delivery pathway, can be improved at every stage.

160   Gregg, P, Realising Potential: A Vision for Personalised Conditionality and Support, 2008; Oakley Review, pp 5-6  Back

161   JCP Report, para 97 Back

162   Work and Pensions Committee, Third Special Report of Session 2013-14, Role of Jobcentre Plus in the reformed welfare system: Government Response to the Committee's Second Report of Session 2013-14, HC 1210 Back

163   CPAG/Church of England/Oxfam/Trussell Trust, Emergency Use Only: Understanding and reducing the use of food banks in the UK, November 2014 Back

164   Report of the All-Party Parliamentary Inquiry into Hunger in the United Kingdom, Feeding Britain: A strategy for zero hunger in England, Wales, Scotland and Northern Ireland, December 2014; See also, submission from Co-Chairs of the APPG (SAN0113) Back

165   Oakley Review, p 32 Back

166   DWP (SAN0142) Back

167   For a full description of the hardship payment system, see CPAG, Welfare benefit and tax credits handbook, chapter 55 Back

168   St Mungo's Broadway (SAN0097); CPAG (SAN0152); Sheffield Citizens Advice and Law Centre (SAN0126); Derbyshire Unemployed Workers Centres (SAN0017) Back

169   Q68 Back

170   See, for example, Scottish Unemployed Workers Network (SAN0071); Dr David Webster (SAN0110); Sheffield Citizens Advice and Law Centre (SAN0126) Back

171   Shaw Trust (SAN0144); Derbyshire County Council (SAN0111); Preston Learning Disabilities Forum (SAN0094); Portsmouth Citizens Advice Bureau (SAN0083); Newcastle City Council (SAN0079); Scottish Unemployed Workers Network (SAN0071) Back

172   Single Homeless Project (SAN0112); Preston Learning Disabilities Forum (SAN0094); Mencap (SAN0037) Back

173   Q101 Back

174   Caritas Social Action Network (SAN0091) Back

175   DWP (SAN0142) Back

176   DWP (further supplementary evidence) (SAN0163) Back

177   See Citizens Advice, Universal Credit hardship payments [accessed 27 February 2015] Back

178   Gingerbread (SAN0115); Derbyshire County Council (SAN0111); Boycott Workfare (SAN0087) Back

179   DWP (SAN0142) Back

180   Written Answer (220640), 21 January 2015 Back

181   Qq259-63 Back

182   Written Answer (226126), 6 March 2015 Back

183   Dr Kayleigh Garthwaite and Professor Clare Bambra, University of Durham (SAN0011); Qq 122-5 [Dr Garthwaite] Back

184   See for example, The Guardian, 3 August 2014; New Statesman, 4 February 2015. One written submission also dealt specifically with these issues: Gill Thompson (SAN0047). Back

185   See, for example, Disability News Service, 14 November 2014 Back

186   DWP Freedom of Information release, VTR18, 19 February 2015 [available via the What Do They Know? website, Accessed 27 February 2015] Back

187   Channel 4 Dispatches TV programme, 2 March 2015 Back

188   Q244  Back

189   Q255  Back

190   DWP Freedom of Information response, VTR 18, 19 February 2015 [available via the What Do They Know? website, accessed 24 February 2015] Back

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Prepared 24 March 2015