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.
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.
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."
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,
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."
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.
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.
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 hardshipto the extent of being unable
to afford essential items such as food, clothing, heating and
accommodationif no payment were made. Discretionary JSA
and ESA hardship payments are non-recoverable.
JSA HARDSHIP PAYMENTS
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".
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
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
· Those under
21 years old who were being cared for by a local authority within
the last three years.
ESA HARDSHIP PAYMENTS
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.
Adequacy of the hardship payment
145. Many witnesses were concerned that standard
JSA hardship payments were not payable until day 15 of a sanction
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."
Some witnesses pointed out that this was particularly the case
where claimants were already struggling financially, before a
sanction was applied.
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.
Witnesses also told us that the process for applying for hardship
payments was onerous and might deter more vulnerable claimants
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."
One advice service reported that it had taken "a number of
weeks" to secure a hardship payment for a homeless claimant.
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.
HARDSHIP PAYMENTS WITHIN UNIVERSAL CREDIT
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."
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.
Witnesses were concerned that this was likely to exacerbate claimants'
existing financial problems. 
OFFICIAL DATA ON HARDSHIP PAYMENTS
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.
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.
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
After our inquiry had concluded the Minister stated that DWP intends
to publish updated figures in May 2015.
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.
DWP "PEER REVIEWS" OF BENEFIT-RELATED DEATHS
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.
It has previously been reported that DWP has carried out "60
peer reviews following the death of a customer" since February
2012. 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
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.
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 [
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.
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.
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
JCP Report, para 97 Back
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
CPAG/Church of England/Oxfam/Trussell Trust, Emergency Use Only: Understanding and reducing the use of food banks in the UK,
November 2014 Back
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
Oakley Review, p 32 Back
DWP (SAN0142) Back
For a full description of the hardship payment system, see CPAG,
Welfare benefit and tax credits handbook, chapter 55 Back
St Mungo's Broadway (SAN0097); CPAG (SAN0152); Sheffield Citizens
Advice and Law Centre (SAN0126); Derbyshire Unemployed Workers
Centres (SAN0017) Back
See, for example, Scottish Unemployed Workers Network (SAN0071);
Dr David Webster (SAN0110); Sheffield Citizens Advice and Law
Centre (SAN0126) Back
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
Single Homeless Project (SAN0112); Preston Learning Disabilities
Forum (SAN0094); Mencap (SAN0037) Back
Caritas Social Action Network (SAN0091) Back
DWP (SAN0142) Back
DWP (further supplementary evidence) (SAN0163) Back
See Citizens Advice, Universal Credit hardship payments [accessed
27 February 2015] Back
Gingerbread (SAN0115); Derbyshire County Council (SAN0111); Boycott
Workfare (SAN0087) Back
DWP (SAN0142) Back
Written Answer (220640), 21 January 2015 Back
Written Answer (226126), 6 March 2015 Back
Dr Kayleigh Garthwaite and Professor Clare Bambra, University
of Durham (SAN0011); Qq 122-5 [Dr Garthwaite] Back
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
See, for example, Disability News Service, 14 November 2014 Back
DWP Freedom of Information release, VTR18, 19 February 2015 [available
via the What Do They Know? website, Accessed 27 February 2015] Back
Channel 4 Dispatches TV programme, 2 March 2015 Back
DWP Freedom of Information response, VTR 18, 19 February 2015
[available via the What Do They Know? website, accessed 24 February