1Introduction
Overview
1.In the UK, as in many other countries, some claimants must take steps towards work, like actively looking for work and attending meetings at the jobcentre, in order to receive benefits. Such activities are referred to as the claimant’s ‘work-related requirements’ or ‘conditionality’. When a claimant does not fulfil an agreed requirement and has no good reason for failing to do so, a sanction is applied. This means that their benefit is stopped or reduced for a period of time. A sanction usually means the claimant loses 100% of their out-of-work benefit, or 40% if they are the lead carer for a child between the ages of one or two—subject to work-related interviews only—or are considered to be vulnerable.1 How long a sanction lasts depends on the claimant’s circumstances; for example, which benefit they claim, the importance of the requirement they did not meet, and whether or not it is the first time they have failed to comply. The aim of conditionality and sanctions is to motivate claimants to engage with employment support and move into work.2
2.We heard little support for unconditional welfare and many witnesses acknowledged the role that sanctions must play. For example, the Joseph Rowntree Foundation told us that “sanctions are an inevitable part of a welfare-to-work system where conditions are attached to the receipt of benefits” and without them, “conditionality is meaningless”.3 But we also heard that, for a conditionality and sanctions policy to be effective, it must apply to the right people—not all out-of-work benefit claimants are able to move into work—and be implemented carefully, to ensure benefits are not wrongly withdrawn. The Department for Work and Pensions (the ‘DWP’ or ‘Department’) argued that the current regime was achieving this, but we heard a lot of evidence to the contrary.
Conditionality and sanctions explained
How does conditionality apply to different claimants?
3.Conditionality and sanctions can apply to claimants of Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support and Universal Credit (UC). The level and intensity of conditionality depends on the claimant’s circumstances. Depending on, for example, whether they have a disability or health condition, young children, caring responsibilities or other income, they will be put into one of four groups ranging from full conditionality (“all work-related requirements”) to no conditionality (“no work-related requirements”). Each has an associated “Labour Market regime”, which determines what steps the claimant must take towards work, and a set of available “interventions”, which indicates the support they must engage with.
Table 1: Conditionality groups, Labour Market regimes and interventions
|
Claimants’ circumstances |
Conditionality Group |
Labour Market regime |
Interventions available |
|
Jobseekers or those with very low earnings |
All work-related requirements |
Intensive work search |
Getting started interview Work search review Flexible coaching support Quarterly coaching review |
|
Those with individual or household earnings above the administrative earnings threshold (AET)4, but below the relevant conditionality earnings threshold |
Light touch |
Getting started interview In work review |
|
|
Those expected to look for work in the future, including: Those assessed as having limited capability for work following a Work Capability Assessment (WCA); and lead carers of children, where the youngest child is aged between 2 and 5 years old. |
Work preparation |
Work preparation |
Getting started interview Flexible coaching support |
|
Those expected to work in the future but who are currently the lead carer for children, including where the youngest child is aged between 1 and 2 years old. |
Work-focused interview |
Work-focused interview only |
Getting started interview Flexible coaching support |
|
Those with earnings over the individual or household CET, or, self-employed and the Minimum Income Floor applies. |
No work-related requirements |
Working enough |
No interventions |
|
Those not expected to work or look for work at present, including: Those with limited capability for work and work-related activity following a WCA; Those over State Pension age; Those with significant caring responsibility for a disabled person for at least 35 hours a week; Those who are the leader carer for a child under the age of 1. |
No work-related requirements |
No interventions |
Source: <Department for Work and Pensions, Universal Credit Full Service Survey, June 2018>
How much is someone’s benefit reduced by if they are sanctioned?
4.UC claimants will usually lose 100% of their standard allowance, or half if claiming as a couple. A reduced rate (40% of standard allowance) will apply if the claimant receives a lowest level sanction (see below) or is vulnerable for other reasons.6 Under the legacy system, JSA claimants typically lose 100% of their JSA benefit, ESA claimants, an amount equivalent to their personal allowance, and sanctions for lone parents claiming Income Support are capped at 20% of their personal allowance.
How long does a sanction last?
5.The length of a sanction depends on the circumstances. The rules are established in legislation7 and are set out in the table below:
Table 2: Sanctions under Universal Credit and new style JSA and ESA
|
Sanction |
Applicable to |
Duration |
||
|
1st failure |
2nd failure |
3rd or subsequent failure |
||
|
Higher level e.g. failure to take up an offer of paid work |
Claimants subject to all work-related requirements |
91 days |
182 days |
1095 days |
|
Medium level e.g. failure to undertake all reasonable action to obtain work |
Claimants subject to all work-related requirements |
28 days |
91 days |
|
|
Lower level e.g. failure to undertake particular, specified work preparation activity |
Claimants subject to all work-related requirements and claimants subject to work preparation and work-focused interview requirements |
Open ended until re-engagement, plus: |
||
|
7 days |
14 days |
28 days |
||
|
Lowest level Failure to participate in a work-focused interview |
Claimants subject to work-focused interview requirements only |
Open ended until re-engagement |
||
Source: Social Security Advisory Committee, Universal Credit and Conditionality, August 2012
The process for imposing a sanction
6.In its written evidence, the DWP explained the steps leading to a sanction. First, the claimant agrees their work-related requirements with their work coach and records them in the Claimant Commitment. The work coach will “raise a doubt” with the claimant if they believe that person failed to comply with their Claimant Commitment. The work coach must then establish whether the claimant had good reason for this failure. This decision requires work coaches to exercise their judgement in line with DWP guidance. If the doubt is raised in a face-to-face interview, this can be done there and then, but in all other cases, the work coach “will make every effort to contact the customer to find out why they failed to meet their requirements”.8 The DWP explained:
In simple cases that meet prescribed circumstances and where the Work Coach has ascertained that the claimant has good reason, Work Coaches do not need to refer the case to an independent Decision Maker and can make a decision not to apply a sanction themselves instead. The reasons are set out in guidance …9
7.If the work coach concludes that the claimant did not have good reason, or if they do not hear from the claimant within five days of raising a doubt (seven if the claimant is receiving ESA or Income Support), they refer the claimant’s case to an independent decision-maker. The DWP told us there were additional safeguards if someone was vulnerable, had complex needs, or could not access “normal channels of communication” either themselves or through someone else. These people would not be referred for a sanction “until a reasonable number of attempts [had] been made to complete a visit and all other attempts to contact [them had] failed”.10 When a work coach refers someone for a sanction, they provide the decision-maker with “information about any complex need or vulnerability that may contribute to the claimant failing to understand and/or comply with a specific requirement”.11 The decision-maker must then consider whether to apply a sanction. The claimant can challenge this decision, first through a Mandatory Reconsideration, and then by a right of appeal to the First-tier Tribunal. The process is summarised in the flow-chart below.
Our inquiry
8.We accept the principle of benefits awarded on the basis of support backed by conditionality and sanctions. But stories of people having their benefit stopped—leaving them and their families in severe financial hardship—because of a ‘failure’ as minor as being minutes late to a meeting, or missing an appointment because they were in hospital, prompted us to investigate. This Report sets out our findings.
9.We could not have understood the process, its shortfalls and the consequences of its failings without the many people who contributed to our inquiry. We would like to thank everyone, but especially those who gave oral evidence or who shared their personal experiences, including through our online survey.12 We are particularly grateful to Samantha, Luke and Jen who spoke to us so candidly. Their evidence was invaluable to our inquiry.
1 Regulation 111 of the Universal Credit Regulations 2013 (SI 2013/376) provide for a 40% sanction rate to apply to claimants if, for example, they are aged 16 or 17 years old, or are the responsible for carer for a child under the age of 1.
2 Department for Work and Pensions (ANC 0083)
3 Joseph Rowntree Foundation (ANC 0068)
4 The AET ensures only claimants on no income, or very low income are subject to stricter conditionality and receive intensive support. The current AET is £338 per month for a single person and £541 for a couple, based on gross taxable pay.
6 Regulation 111 of the Universal Credit Regulations 2013 (SI 2013/376) states that a reduced rate sanction will apply if the claimant: is aged 16 or 17; or, responsible for a child under the age of 1, is an adopter, pregnant and due to give birth within 11 weeks, or has had a baby in the last 15 weeks.
7 Regulation 102 of the Universal Credit Regulations 2013 (SI 2013/376)
8 Department for Work and Pensions (ANC 0083)
9 Department for Work and Pensions (ANC 0083)
10 Department for Work and Pensions (ANC 0083)
11 Department for Work and Pensions (ANC 0083)
12 Between 4 May and 5 June 2018 the Work and Pensions Committee invited views on benefit sanctions via an online survey on its webpage.
Published: 06 November 2018