Benefit sanctions Contents

1Implementation

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work and Pensions (the Department) about its administration of benefit sanctions.1 We also took evidence from two charities, Crisis and Citizens Advice, on the impact of sanctions on the people they support.

2.A benefit sanction is a reduction or suspension of benefit payments. They can last up to three years, but a typical sanction lasts four weeks and means a Jobseeker’s Allowance claimant loses around £300. The Department imposes sanctions on claimants who do not meet conditions for receiving benefits. For example, Jobseeker’s Allowance claimants are required to attend jobcentre appointments, and the Department may sanction people who fail to attend them.2

3.The Department uses sanctions for two reasons: to encourage more people to comply with conditions, and to penalise claimants for not meeting their responsibilities. The Department believes that complying with conditions helps some claimants find work. It sets conditions for certain claimants of four benefits: Jobseeker’s Allowance, Employment and Support Allowance, Universal Credit and Income Support. Over one million people claiming these benefits have to show that they are complying with conditions to avoid a sanction.3

4.The process for sanctions can involve several steps. Work coaches in jobcentres and advisers on the Department’s contracted-out employment programmes agree conditions with claimants and monitor their compliance. They refer people who they believe have not complied with conditions to the Department. The Department decides whether to sanction people based on the evidence available. People are able to challenge the Department’s decision to sanction them and they can also apply for hardship payments.4

5.Sanctions are not rare; 400,000 benefits sanctions were imposed on claimants in 2015, the last complete year for which data are available. Some claimants may receive more than one sanction. Around a quarter (24%) of people who claimed Jobseeker’s Allowance at any point between 2010 and 2015 had at least one sanction imposed on them.5

The use of sanctions

6.Sanctions reduce support to claimants, sometimes leading to hardship, hunger, rent arrears and depression.6 Crisis has found that sanctions can be a cause of homelessness. It told us that most of the sanctioned people it surveyed in 2015 went without food or heating, and 75% said that sanctions had a detrimental impact on their mental health. Citizens Advice told us that half of the sanctioned people it surveyed stopped paying essential bills like rent, gas, and electricity. It commented that people can take a long time to pay these off, which can damage incentives to find work, if people consider that any financial gain from working will be used up by paying off debts.7 Claimants can apply for hardship payments, but these will become loans that people on Universal Credit will have to pay back.8

7.These sometimes serious consequences of sanctions mean that they should be used carefully. The 2014 independent review by Matthew Oakley of Jobseeker’s Allowance sanctions on the Work Programme recommended that the Department should pilot a new approach using warnings and non-financial sanctions following a first failure to comply.9 The Work and Pensions Select Committee made a similar recommendation in 2015 with respect to jobcentre sanctions.10 The Department has tested giving claimants more notice of its intention to sanction them, but has not carried out a trial of using warnings in place of sanctions for first sanctionable offences.11

8.Citizens Advice explained that sanctions are often imposed for honest mistakes and highlighted the need for a less rigid process when this happens.12 Despite the Department’s review of sanctions communications in 2013, there are still problems preventing understanding of conditions.13 When Citizens Advice surveyed claimants in 2015, only a third knew what they needed to do to fulfil their responsibilities.14 Nearly half (46%) of clients who had sought Citizens Advice’s help about a sanction felt that their sanction could have been avoided, had they received a warning.15

Variations and consistency

9.Sanction rates vary substantially between different Work Programme providers. Some make more than twice as many sanction referrals as other providers supporting similar people in the same area. Between jobcentres, sanction rates also vary in ways that cannot be solely explained by differences in claimant compliance with rules. The Department does not analyse the reasons for this variation, and told us it does not believe sanction rates can be compared between jobcentres, even where they have similar job markets.16 It looks at sanction rates and asks jobcentres to explain high and low levels of use, and believes the jobcentres it investigates with particularly high and low sanction rates are acting appropriately “based on the labour market and the operation of [each] environment”.17

10.The Department told us there will always be variation in a system where individuals have to make judgments and that it has guidance in place for staff.18 However, the Department’s internal auditors found evidence that suggested work coaches were not complying with sanction processes, weakening the fair and consistent use of sanctions. The Department has identified similar issues in internal summaries of staff surveys.19

11.Citizens Advice and Crisis were concerned that inconsistency particularly affects the most vulnerable claimants. The Department accepts the importance of protecting vulnerable claimants and has introduced safeguards intended to ensure that they are not sanctioned inappropriately.20 More broadly the Department explained how it aims to improve relationships between claimants and work coaches, and to make conditions more sensitive to individual circumstances.21 However, Crisis told us that these safeguards are only imperfectly working in practice, and that homeless people are sanctioned at twice the rate of the general claimant population. Crisis told us vulnerable people are not necessarily being targeted, but are more likely to be unable to comply with the sanction regime.22 The Department can use formal rules to protect people with particular needs, for example to excuse victims of domestic violence from meeting conditions for a limited period. But it relies on claimants self-reporting their personal circumstances, and work coaches being aware of the protections available. The Department does not track use of the protections and cannot tell whether work coaches use them effectively.23

1 C&AG’s Report, Benefit sanctions, Session 2016–17, HC 628, November 2016

2 C&AG’s report, paragraphs 2, 3 and 4

3 C&AG’s report, paragraph 1.6

4 C&AG’s report, Figure 9 and paragraph 3.5

5 C&AG’s report, paragraphs 10, 1.7, Figure 5

6 C&AG’s report, paragraphs 4 and 3.17

7 Qq 12, 14

8 Q 159

9 Matthew Oakley, Independent review of the operation of Jobseeker’s Allowance sanctions validated by the Jobseekers Act 2013, July 2014

10 Work and Pensions Committee, Fifth Report of Session 2014–15, Benefit sanctions policy beyond the Oakley Review, HC 814,

11 C&AG’s Report, paragraph 2.23

12 Q 17