Legislative Scrutiny: Welfare Reform Bill - Human Rights Joint Committee Contents

3. Letter to the Chair, from Rt Hon Iain Duncan Smith MP, Secretary of State for Work and Pensions, 26 September 2011

Thank you for your letter dated 20 July 2011 requesting further explanation of the Government's view that the proposals in the Bill are compatible with the UK's human rights obligations. The attached paper sets out the Government's response to the Committee's questions.

I would like to thank the Committee for agreeing to extend the proposed deadline for reply.

26 September 2011

Response to Welfare Reform Bill letter, 20 July 2011

(Q 1) I would be grateful if you could explain whether the Government has conducted any analysis of the proposals in the Bill for their compatibility with international human rights law, including, in particular, the obligations of the UK under a) the International Covenant on Economic, Social and Cultural Rights; and b) the UN Convention on the Rights of Persons with Disabilities.

(Q 2) I would be grateful if you could provide us with a copy of that analysis.

1. The Government has conducted a full analysis of the proposals in the Bill for their compatibility with our obligations under the European Convention on Human Rights (this is summarised in the explanatory notes). It is also content that the proposals in the Bill are compatible with our wider international human rights obligations, insofar as these are relevant, including the International Covenant on Economic Social and Cultural Rights and the UN Convention on the Rights of Persons with Disabilities. The Government is committed to protecting the rights of disabled people, and the report that will be submitted to the United Nations on the implementation of the Convention later this year will set out the steps being taken. The Government does not consider that the proposals raise any particular issues in respect of these wider obligations such as to merit a detailed analysis.

(Q 3) Please provide a further explanation of the Government's view that statutory changes to conditions of entitlement to statutory benefits do not engage Article 1, Protocol 1 ECHR.

(Q 4) The Government considers that, if Article 1 Protocol 1 ECHR is engaged, the measures in the Bill are proportionate to the legitimate aim of securing the economic well-being of the country. The Explanatory Notes do not provide a full analysis of the Government's views on these measures, but refer to "relevant considerations. We would be grateful for a fuller explanation of the Government's view on the compatibility of these proposals with Article 1 Protocol 1 (see paragraphs 694-695 of the Explanatory Notes).

2. Article 1 Protocol 1 does not confer a right to receive social security benefit, nor does it guarantee a right to a particular amount of benefit (Stec & Others v UK, application number 65731/01 and 65900/01). The Government therefore considers that there will be no interference with Article 1 Protocol 1 where the State changes the conditions of entitlement to a benefit or introduces a new benefit. However, the Government has also considered the justifications for and proportionality of the relevant measures.

Entitlement to universal credit

3. The Government considers that in cases where a person applies for universal credit, but does not meet one or more of the entitlement conditions and is therefore not entitled to universal credit, no issue can arise under Article 1 Protocol 1 because the person does not have any property right.

4. Equally, the Government considers that in cases where a person (1) applies for universal credit; (2) meets the conditions of entitlement and is therefore awarded the benefit; (3) subsequently no longer meets one or more of the conditions and is therefore disentitled, the person no longer has any property right and there is therefore no possession for the purposes of Article 1 Protocol 1. Where a person has met the conditions of entitlement and is awarded benefit, the possession in the benefit for the purposes of Article 1 Protocol 1 must be limited to the right to the benefit for as long as the statutory conditions of entitlement are met.

5. The changes are in any event justifiable. A re-design of the benefits and tax credits systems which aims to create greater incentives to work and earn money, and allows income to be subject to a more generous taper which will mean that a claimant will keep more of their benefits despite working and earning money, clearly meets a legitimate aim.

6. Any change to an existing claimant's amount of benefit will be a proportionate measure. Universal credit has been designed to provide an appropriate structure of support for people with no or low incomes both in and out of work. The central aim is to smooth the transition into work by reducing the support a person received at a consistent rate as their earnings increase.

7. The provisions in clause 37 and Schedule 6[67] are sufficient to ensure that the Department for Work and Pensions can design transitional protection for existing claimants in a way which allows for sufficient notice to be given to claimants of any change, particularly significant change. This measure will help to ensure that the impact of any changes in benefit levels on particular individuals is proportionate.

Condition relating to entitlement to work

8. Clauses 60-62 amend the Jobseekers Act 1995, the Welfare Reform Act 2007 and the Social Security Contributions and Benefits Act 1992. They make provision for 'entitlement to work' to be introduced as a condition of entitlement for claimants of contributory employment and support allowance (ESA (C)), contributions based jobseekers allowance (JSA (C)), maternity allowance and statutory payments.

9. These amendments make provision such that claimants will be required to have an entitlement to work as a condition of entitlement to these benefits and statutory payments. For benefits, this requirement must be met at the point of claim. It will not operate to remove benefit that is already in payment.

10. This proposal will operate to ensure that those who may have been working illegally are not entitled to benefits or payments based on their illegal employment and the National Insurance contributions that may have been paid by them in that employment. The amendment is made only to legislation which applies to non means tested benefits and payments which are accessed by virtue of the person actually being in work, or having recently worked.

11. Section 115 of the Immigration and Asylum Act 1999 makes provision for access to means tested benefits to be limited in relation to those who have no right to be in or work in Great Britain. This takes effect by way of regulations which are specific to each of the means tested benefits. There is currently no equivalent provision which relates to non means tested benefits or payments, or benefits based on National Insurance contributions, on the premise that those with no entitlement to work will not have been working. However, the Government is aware that those with no entitlement to work are able to access such benefits or payments as there is no legislative bar on them doing so. This proposal seeks to address this lacuna.

Period of entitlement to contributory employment and support allowance

12. Clause 51 amends the Welfare Reform Act 2007 to restrict entitlement to ESA(C) to 365 days for those in the work-related activity group. The clause details how the 365 days are calculated with reference to the period over which entitlement has arisen. It further makes provision for claimants to re-qualify for further periods of entitlement if they meet the conditions of entitlement in the future. This reform does not apply to those in the most disabled of the ESA claimant group; the support group. Any claimant who loses entitlement to ESA(C) as a consequence of this provision will be able to access income-related ESA, and in due course, universal credit, if they meet the applicable means tests.

13. The effect of the provision in question will be to put ESA(C) on a similar footing to JSA(C), where entitlement is limited to six months, and will be consistent with the approach taken to other contribution based benefits and statutory payments administered by the Department for Work and Pensions, all of which are time-limited.

14. The legislation will make provision for the calculation of the year's limit and this will be applied to all claimants (both new and existing), with the exception of those in the support group whose needs are such that it is appropriate that the State continue to provide support indefinitely. Claimants will be made aware of the detail of the proposals at the earliest appropriate time and will accordingly have time to adapt and prepare themselves for the forthcoming change in position.

15. Further, the change supports the Government's aim of engaging claimants in the process of recovery and return to work, ensuring that those who need the support of the State receive it, and those who need less support are helped to move towards and prepare for a return to the workplace. Time limiting ESA(C) will encourage claimants to make use of the back to work support that is offered to them, so as to increase their chances of finding appropriate work.

16. The measure is also justified given the significant cost to the public purse of paying ESA(C). The practical effect of the proposal to time limit will be limited to people who have capital or income above a certain level, such that they will not be able to access means tested benefits. At the expiry of entitlement to ESA(C) claimants can continue to receive income-related ESA if appropriate in their circumstances, providing that they also satisfy the means test. This enables the Government to direct public funds at those most in need of them.

Condition relating to youth

17. Clause 52 makes amendments to the Welfare Reform Act 2007 in relation to ESA claimed on the grounds of youth ('ESA(Y)'). The existing provisions allow for a person under 20, or in certain circumstances, 25, to be able to access ESA without meeting the National Insurance conditions, or the means test, and allows them to remain on the benefit indefinitely.

18. This clause provides for there to be no new claims to ESA(Y) after the commencement of these provisions. Further, existing awards for claimants in the work-related activity group will be time limited by virtue of clause 51 which is dealt with above. Existing claimants in the support group will continue to be entitled to ESA(Y).

19. It is justifiable to treat young people the same as older claimants. Young people will be able to access ESA(C) on the basis of their own NI contributions if available, and if not will be able to access income-related ESA should they meet the means test. This ensures that the public purse continues to support those with limited funds who are less able to help themselves.

Entitlement of lone parents

20. Income support is the main income-replacement benefit for lone parents. Before November 2008, lone parents with a youngest child up to the age of 16 could claim income support as a lone parent. Since then, this threshold age has been reduced first to 12, then to 10 and, on 25 October 2010, to 7.

21. The Government announced in the budget that income support would no longer be available to lone parents with a child of 5 or over.

22. Clause 57 will amend section 3(1) of the Welfare Reform Act 2009 so that, when it is brought into force, any regulations setting out the prescribed categories of person who are entitled to income support must include lone parents with a child under the age of 5. This will enable existing regulations to be amended so that lone parents with a child of 5 or 6 are no longer entitled to income support solely on grounds of being a lone parent.

23. Most lone parents are expected to claim JSA once the threshold age for the end of entitlement to income support reduces to 5 and will be required to meet JSA conditionality—which means that they will be expected to be available for and actively seeking employment, and otherwise comply with requirements imposed on them in relation to their JSA award.

24. The Government considers that it is reasonable to expect claimants to be available for and actively seeking work once their child is in full-time education, in return for financial support. Further, the change is expected to lead to greater employment of lone parents which will have a positive effect on child poverty. The change is proportionate to that aim. In particular, there is a wide range of flexibilities and support available to lone parents claiming JSA to help ensure that any requirements imposed on them are not disproportionate and will take account of the lone parent's role as the main carer for their child.

Personal independence payment

25. The Bill makes provision for the introduction of a new benefit, to be known as personal independence payment ("PIP"). This benefit will in due course replace disability living allowance. The new benefit is to be a non-taxable, non-contributory benefit, designed to contribute towards the additional costs associated with long-term disability and be focused on those with the highest need.

26. It is intended to be a dynamic benefit, taking account of changes in individual circumstances and the impact of disabilities to a greater degree than is presently possible within the disability living allowance structure. The benefit will better reflect 21st century attitudes towards disability and developments in equality legislation. It is justifiable for this kind of support to be focused on those individuals who are most affected by their impairment. The assessment process will ensure that these individuals are identified in a fair, transparent, consistent and evidence-based manner. Claimants will also be given clear notice of the timetable for the introduction of PIP and the eventual cessation of disability living allowance.

27. The changes are justifiable, in terms of supporting those most affected by disability, and introducing a fairer, more consistent and evidence-based assessment system to identify such individuals.

Benefit cap

28. Clauses 93 and 94 allow for a cap on the total amount of benefit received from the State (from central Government and local authorities). There is a power to provide for exceptions from such a cap. The intention is to use this power to exempt households where a member of the household is working above a certain level, has a disability and is entitled to disability living allowance, PIP or constant attendance allowance, or is a war widow or widower.

29. The reason for having a cap is to balance the interests of benefit claimants with the interests of taxpayers. The Government believes that the effect of the cap is proportionate, taking into account: (1) the amount of the cap and the fact it will be based on average household earnings; (2) the fact that claimants will be notified of the cap and given time to adjust their spending to accommodate their new levels of benefit; and (3) the fact the cap will affect relatively few households and that those affected will already have a substantial income from benefits.

Recovery of benefit payments

30. The amendments to the Social Security Administration Act 1992 made by clause 102 allow for the recovery of any amount of universal credit, JSA and ESA that has been paid in excess of entitlement and prescribe the methods by which those overpayments may be recovered. The prescribed methods of recovery in each case are by offsetting against, or deduction from, other benefits, by court action or by deduction from earnings.

31. The Government considers that the strengthened measures it is putting in place for recovery of excess payments are justified and proportionate. In the present time of constrained public finances it is essential to ensure recovery of overpaid benefits in all appropriate circumstances. It is important also to preserve the appearance of fairness so that the public can see that limited public funds are being focused on those who have a proper legal entitlement to those monies.

32. In order to identify proportionately and transparently the cases where it is appropriate to pursue recovery in such cases, the Department for Work and Pensions plans to issue a code of practice which will set out the principles it will apply in deciding when to seek recovery. This will enable proper account to be given to the circumstances of the debtor, and the nature and reasons for the overpayment.

(Q 5) I would be grateful if you could explain whether the Government intends to make any draft Regulations available during the debate on the Bill.

(Q 6) If not, please explain how Parliament will have a full opportunity to consider the human rights impact of these proposals without full information on the relevant safeguards proposed. Specifically, please explain how Parliamentarians might raise human rights concerns about particular measures, when the draft Regulations will not be subject to line-by-line consideration.

33. Illustrative draft regulations will be provided in relation to some parts of the Bill during the Lords Committee stage. In all areas, we will provide notes on how regulation-making powers will be used, as we did during the Commons stages of the Bill.

34. Regulations subject to the affirmative procedure must be laid before Parliament in draft, and are subject to debate and approval by Parliament. Regulations subject to the negative procedure may be prayed against by any Member of Parliament and a debate must then be tabled. Parliamentarians will be able to raise any human rights concerns during such debates.

(Q 7) I would be grateful if you could, as a courtesy, provide me with a copy of the Government's response to the Seventeenth Report of the Delegated Powers and Regulatory Reform Committee as soon it is available.

35. The response is attached.

(Q 8) Please explain why the equality impact assessments produced were not available in time for the introduction of the Bill.

36. There is no formal requirement to publish equality impact assessments for a particular stage in the legislative process. They were published after introduction in order to ensure that they were as up-to-date as possible in advance of the Commons Committee stage, the first point of the parliamentary process where a Bill is subject to detailed scrutiny.

(Q 9) Did the Government consult with the EHRC during the preparation of the equality impact assessments accompanying the Bill? If not, has the Government met with the EHRC to discuss their concerns about the scope of the equality impact assessments?

37. Officials from the Department for Work and Pensions met with the EHRC on 5th July 2011 to discuss various concerns and questions relating to the Welfare Reform Bill equality impact assessments.

38. The Welfare Reform Bill equality impact assessments were based on the Department for Work and Pensions' equality impact assessment tool which is designed to help to ensure that the needs of people with protected characteristics are taken into account when changing, developing or implementing a policy or service. This tool has been discussed with EHRC and informed by EHRC guidance.

(Q 10) Please provide us with the Government's response to the concerns raised by the EHRC that the equality impact assessments prepared do not meet the public sector equality duty in the Equality Act 2010.

39. There has been no formal written response to concerns raised by the EHRC. However, the EHRC's concerns were discussed at the meeting with officials on 5th July and the issues discharged. Specific concerns that were raised are addressed in questions 12 and 13 below.

(Q 11) In light of the number of policy factors yet to be determined in the Bill (see above), is the Government satisfied that these equality impact assessments provide a full picture of the likely impact of the proposals in the Bill?

40. Yes. Equality impact assessments are part of an ongoing, iterative process. The Department for Work and Pensions will update the assessments with the equality related analysis that informs the continuing development of the policies and how they are implemented. Once these policies are implemented the Department will continue to monitor their impact and review decisions accordingly.

(Q 12) Has the Government conducted an assessment of the likely cumulative impacts of the proposals in the Bill? (Please provide the Government's response to the concern raised during debates in the House of Commons that, without a cumulative assessment of the impact of the policies in the Bill on people who share protected characteristics (particularly women and disabled people), Parliament will not necessarily have a full picture of whether the Bill will operate in a discriminatory manner.)

41. The proposals in the Bill impact on a wide variety of groups in different ways. A single overall cumulative equality impact assessment has not been produced, for the reasons as set out in paragraphs 3 to 5 of the impact assessment cover note

1)The scale of policy change provided for by the Welfare Reform Bill is significant, and is planned to take place over an extended period, beginning in 2011-12 with changes to lone parent obligations, and ending in 2017-18 with the completion of the transition to universal credit. Therefore the impacts build-up over a substantial period of time, and at a different rate for the various measures. To provide a single summary accurately taking account of the different timings would be analytically complex and extremely challenging. To simplify would risk providing a set of misleading impacts.

2) Moreover the changes to social security benefits and tax credits contained in the Bill take place in a wider context of fiscal change. The impact assessments therefore do not account for wider changes that would impact on households over the period, for example, the aim to increase income tax personal allowances to £10,000.

3) Collectively these factors substantially limit the extent to which a cumulative impact assessment would provide an accurate analysis of the impacts of the Bill as a whole. Moreover, an amalgamated assessment is likely to obscure the impacts of individual policies rather than aid the understanding of those considering the Welfare Reform Bill in Parliament and the wider public.

(Q 13) Please confirm whether the human rights memoranda and/ or equality impact assessments will be produced to accompany regulations made under the Bill, in particular with regard to any regulations connected to eligibility for benefits, conditionality and the imposition of sanctions and the operation of hardship payments.

42. It is envisaged that further equality impact assessments will be prepared during the implementation of the Welfare Reform Bill, including in relation to benefit eligibility, conditionality, sanctions and hardship payments. For Lords Committee, we will update equality impact assessments where there have been significant policy announcements made since the original assessments were published.

43. There is no requirement to produce a human rights memorandum to accompany regulations. Where regulations are subject to the affirmative resolution procedure, a statement on their compatibility with the ECHR will be included in the Explanatory Memorandum to the regulations.

(Q 14) I would be grateful if the Government could outline the measures which it proposes to take to monitor the impact of the proposals in the Bill after they are implemented, including discriminatory impact on people and groups of people with the characteristics protected by the Equality Act 2010.

44. The detailed evaluation plans for post-implementation are still being developed, however the Department for Work and Pensions is committed to monitoring the impacts of its policies and we will use evidence from a number of sources on the experiences and outcomes of the protected groups. Specifically (as set out in the "monitoring and evaluation" sections of the equality impact assessments—http://www.dwp.gov.uk/policy/welfare%2Dreform/legislation%2Dand%2Dkey%2Ddocuments/welfare%2Dreform%2Dbill%2D2011/impact%2Dassessments%2Dand%2Dequality/):

1)The Department will use administrative datasets to monitor trends in the benefit caseloads for the protected groups and in the level and distribution of benefit entitlements. The administrative data will provide robust material for age and gender although not, as a rule, for the other protected groups.

2) The Department will use survey data (for example the Family Resources Survey and Labour Force Survey) to assess trends in the incomes of the protected groups and in the employment outcomes.

3) The Department will use qualitative research and feedback from stakeholder groups to assess whether there are unintended consequences for the protected groups, and whether the policy is resulting in adverse consequences for particular groups.

4) The Department will utilise feedback from Departmental employee networks and internal management information. For example we will monitor the level of appeals and complaints in order to assess the broader impact of the policy.

5) The Department will draw on broader Departmental research where appropriate, as well as any research commissioned specifically as part of the evaluation of the measure.

(Q 15) Please confirm that conditionality either in a claimant commitment or in a work-related or work preparation requirement will not extend to a requirement on claimants to undertake drugs testing or treatment (similar to the provisions envisaged in section 11, Welfare Reform Act 2009.

45. The Government can confirm that there are no current plans to use these mechanisms to mandate claimants to undertake drug testing or treatment. Section 11 of the Welfare Reform Act 2009 is being repealed by the Bill (see clause 59). We will keep under review alternative approaches which might encourage claimants to address addiction. Any proposals that are taken forward will be compatible with the ECHR, in particular with Article 8.

(Q 16) In relation to each of the clauses in the Bill which provide for the Secretary of State to contract out certain of his functions in relation to welfare reform, please explain whether the Government considers the authorised person will be performing a "public function" for the purposes of section 6 of the Human Rights Act 1998?

(Q 17) If not, please explain against which public body an individual who wished to rely on the Human Rights Act 1998 could claim.

46. Clause 29 allows for the Secretary of State to contract out his functions under clauses 13 to 25 (clause 49 inserts new section 6L into the Jobseekers Act 1995 and clause 56 inserts new section 11K into the Welfare Reform Act 2007. These new sections mirror clause 29, which relates to universal credit, and apply to JSA and ESA, respectively, as contributory benefits once universal credit is introduced). Clauses 13 to 25 relate to the claimant commitment (that claimants must accept as a condition of entitlement to universal credit under clause 4(1)(e)), and the work-related requirements that may be imposed on claimants as part of the conditionality regime. Clause 29(4) makes it clear that anything done, or not done, by the contractor in carrying out the Secretary of State's functions is to be treated as done, or not done, by the Secretary of State, save for anything that concerns the actual contract between the Secretary of State and the contractor to carry out the function or in relation to criminal proceedings against the contractor.

47. The Government's view is that the functions under clauses 13-25 are of a public nature. This applies whether they are exercised by the Secretary of State or by another person authorised under clause 29. In a case where it is alleged that a contractor has acted contrary to the Human Rights Act, a person may bring a claim against the Secretary of State.

(Q 18) I would be grateful if you could provide a fuller explanation of the information provided by the Government on the likely compliance with Article 3 ECHR of the proposals in the Bill, including fuller information on the safeguards outlined in the Explanatory notes (see Explanatory Notes para 705). In particular:

a. please explain the Government's view that the imposition of a sanction leading to a reduction in benefit will not be "treatment" for the purposes of Article 3 ECHR;

48. The Department considers that the reduction of a universal credit award where a claimant has failed to comply with mandatory requirements does not amount to "treatment". In the case of Secretary of State for the Home Department v Limbuela, Tesema and Adam [2004] EWCA Civ540 the House of Lords stressed that the Article does not oblige a State to provide any minimum standard of social support for those in need: it does not require the State to provide a home or a minimum level of financial assistance to all within its care.

49. The conditions which were recognised in Limbuela as capable of giving rise to 'treatment' do not arise in the context of benefit sanctions. A sanction will only apply where: (1) claimants have clearly had explained and set out for them the reasonable requirements that they must meet, and that underpin their entitlement to receive benefit; (2) the consequences of failing to meet the requirements are made absolutely clear to claimants; (3) there is no legal restriction on claimants' ability to seek work and therefore support themselves; (4) a sanction is as a result of a claimant's own voluntary actions and only imposed where a claimant has no good reason for failing to comply with a requirement.

b. please provide further information on how the proposed hardship regime will operate;

50. We are currently reviewing the system of hardship payments, including options to ensure that any hardship regime does not undermine the deterrent effect of sanctions.

c. please explain what "other means of support will be available where necessary to ensure compliance with Article 3";

51. The explanatory notes to the Bill state: "In relation to the proposal to introduce a condition of entitlement to work for certain benefits [clauses 60-62], other means of support will be available where necessary to ensure compliance with Article 3". Support may be available under section 95 of the Immigration and Asylum Act 1999 if the person makes a claim for asylum and would otherwise be destitute, and also under section 4 of the 1999 Act for failed asylum seekers who are destitute and face recognised barriers to return to their home country. Alternatively, if a claim for asylum has not been made then limited support may be available from Local Authorities, by virtue of section 21 of the National Assistance Act 1948 or section 17 of the Children Act 1989.

d. please explain how the Government's understanding of these measures and the power to make payments on account has informed the Government's understanding of the likely compatibility of the operation of these measures with Article 3 ECHR. (We understand that the measures are intended to replace discretionary social fund payments are not yet settled).

52. The Government does not consider that powers to make payments on account will be directly relevant to claimants who are subject to a sanction or to those who are not entitled to benefits because they do not have an entitlement to work in the UK.

53. Payments on account are currently made by virtue of regulations made under powers in section 5(1)(r) of the Social Security Administration Act 1992. They are made on a discretionary basis in cases where a claim for benefit cannot be made or determined immediately; where a claim has been made and it is impracticable for the claim to be determined immediately; or where an award has been made but it cannot be paid immediately.

54. Clause 98 of the Bill substitutes a new section 5(1)(r) into the Social Security Administration Act. The substituted section 5(1)(r) provides expanded powers to make payments on account. The intention is to use these powers to provide for advances of benefit in two ways: (1) short term advances which will replace both interim payments made currently (see paragraph 53 above) and crisis loans for benefit alignment purposes; and (2) budgeting advances which will replace budgeting loans for universal credit claimants. Budgeting loans and crisis loans are part of the discretionary social fund, and will cease to exist once section 138(1)(b) of the Social Security Contributions and Benefits Act 1992 is repealed in respect of such loans by clause 69(1) of the Bill.

55. Short term advances may be made where a claimant is receiving benefit, but has difficulties with budgeting between payments because of a change to their award amount, or where a claimant's first pay day has not yet been reached. The purpose of budgeting advances will be to help towards meeting expenses that are difficult to budget for out of normal benefit income, or for which the claimant has been unable to save, or to deal with fluctuations in expenditure throughout the year.

(Q 19) In light of the relevance of the operation of the hardship regimes proposed in the Bill for the impact of the Bill in practice on the rights of individual claimants, I would be grateful if the Government could provide us with further information on the operation of the existing hardship regime which operates in connection with sanctions associated with other benefits. In particular, I would be grateful if you could provide us with annual statistics on the number of applications made for support under the hardship regime (and the overall number of case where sanctions have been imposed); and how many of those applications have been successful.

56. Under current income-based JSA rules (set out in the Jobseekers Regulations 1996, Part IX), claimants can receive hardship payments (effectively a reduced payment of income-based JSA) if they are subject to a sanction for failing to meet labour market related conditions, and they meet certain criteria (e.g. that they would suffer hardship if payments were not made).

57. Certain claimants, often referred to as "vulnerable" can receive hardship payments from the date that the sanction applies, but all other claimants can only receive hardship payments from the 15th day of the sanction.

58. Currently, single claimants who are sanctioned are not paid any JSA (their personal amount plus any premiums, in combination; this is known as their applicable amount). Hardship payments are a claimant's applicable amount minus 40% of their personal amount (or 20% in cases where a claimant, or a member of their family, is pregnant or seriously ill).

59. In a joint JSA claim, when one member is sanctioned, payment of the JSA award is reduced to an amount equivalent to a single person's personal amount plus any premiums. If eligible for hardship the joint claim can receive full rate of benefit minus 40/20% of the applicable single person's personal amount.

60. The same provisions apply for those on JSA who are sanctioned as a result of benefit fraud, except in the case of a joint claim. In a joint claim case, where one of the joint claimants is not involved in the fraud and is not subject to a sanction for breaching conditionality requirements, JSA remains payable but only to that person and at a single person rate. Alternatively if the couple is in hardship, joint-claim JSA hardship payments may be paid. Where both of the joint claimants were involved in the fraud or one committed benefit fraud and the other breached JSA conditionality requirements, if the couple is in hardship, joint claim JSA hardship payments may be paid.

61. Where a person receiving an income-related benefit other than JSA is sanctioned as a result of benefit fraud, the existing system provides for benefit to remain in payment but reduced by an amount equivalent to 20% or 40% of the single person's applicable amount, depending on the person's circumstances.

62. There are no publicly available statistics on the number of applications for hardship support.

(g) We would be grateful if you would like to add anything to the Government's earlier responses to concerns raised during the House of Commons debates (or by NGOs and others) about the potential for the operation of the Universal Credit to have a discriminatory impact on people or groups with protected characteristics (including women and disabled people).

63. The equality impact assessments for universal credit, the household benefit cap and other measures in the Bill looked at the potential for adverse impacts on individuals with protected characteristics. The Government will take account of additional points that have been raised as equality impact assessments are updated. However, the Government believes that the changes it is proposing are compatible with its human rights related obligations.

64. The combination of higher disregards and a lower taper in universal credit should provide families with more flexibility to balance work and caring responsibilities. universal credit will also provide greater stability of income and consistency of support, and so will significantly reduce the risks associated with moving into work. These changes will be of benefit to both women and men.

65. Universal credit will significantly change the pattern of entitlements to benefit, with women and families with children more likely to see increases in their benefit income than single males. This will particularly benefit the poorest households, who will receive the vast majority of the gains from universal credit. A package of transitional protection will ensure that there will be no cash losers as a direct result of the move to universal credit, where circumstances remain the same.

66. Under universal credit, work-focussed support will be tailored to the needs of the individual to help them find suitable work and ensure that they are not excluded from the labour market. As a result of our current reforms, we are offering employment support to more lone parents, who are predominately female, and aim to promote more equality of opportunity between men and women in accessing labour market opportunities and helping with a move back into the labour market. Helping lone parents move into work means that they are able to enjoy the wider advantages that come from working that are experienced by the rest of the working population. This could also help them and their families to move out of poverty.

67. Disabled people should also gain as a result of improved work incentives and smoother transitions into work. For example, the single taper and higher disregards for households with a disabled adult should support disabled people to work a few hours (especially those with fluctuating capacity to work, for example, because of mental health problems).

(h) We would be grateful if you would like to add anything to the Government's earlier responses to concerns raised during the House of Commons debates (or by NGOs and others) about the potential for the operation of the PIP to have an adverse impact on disabled people. In particular, could you set out the Government's response to criticism that certain aspects of PIP could have a retrogressive impact on the rights of disabled people which could be inconsistent with the UK's obligations under the UN Convention on the Rights of Persons with Disabilities.

68. PIP is intended to target resources on the people that need it most, taking into account the whole range of services available to, and balancing the various needs of, disabled people. In doing so, the Government believes that the changes are compliant with the UK's obligations under the Convention.

69. The new assessment for PIP, which the Government is currently developing, is intended to be fairer than that of disability living allowance, taking more holistic account of the impact of disability. It will do this by considering a range of activities and not basing entitlement on meeting single criteria, as in disability living allowance. In doing so the Government wants to ensure that it considers all impairment types equally, unlike disability living allowance which often fails to take full account of the impact of mental, cognitive and sensory impairments. For example, the assessment will consider an individual's ability to communicate, ensuring we better assess the effect of impairments of hearing, speech and language comprehension. Meanwhile, entitlement to the mobility component will be based not only on physical ability to get around but will also consider an individual's ability to plan and follow a journey.

(Q 20) I would be grateful if you would confirm that the imposition of any sanction under the Bill will be subject to appeal. If so, please explain why clauses 126, 27, 46, 49 and 54 need not be amended to provide that the relevant Regulations should provide for an appeal to the first tier tribunal in connection with the imposition of any sanction associated with Universal Credit, Employment Support Allowance or Jobseeker's Allowance.

70. Claimants will have a right of appeal to the First-tier Tribunal against a decision to reduce their benefit award amount in accordance with a sanction.

71. Clauses 26, 27, 46 and 54 (which include provision about the imposition of sanctions under JSA, universal credit and JSA and ESA as contributory benefits following the introduction of universal credit), do not need to include provision about appeal rights because sections 8 to 12 of Social Security Act 1998 set out the appeals structure, and already apply to JSA and ESA, and will, by virtue of amendments made in the Bill, also apply to universal credit.

72. Section 8 of the Social Security Act 1998 makes general provision for decisions by the Secretary of State on a claim. Paragraph (1)(a) provides that it shall be for the Secretary of State to decide any claim for a relevant benefit (which includes JSA and ESA). Paragraph 45 of Schedule 2 to the Bill amends section 8 of the Social Security Act 1998 to add universal credit to the list of relevant benefits. Sections 9 and 10 allow for the revision and supercession of decisions made under section 8, in accordance with regulations. Section 12 provides for appeals against decisions made by the Secretary of State under sections 8 and 10. Section 12(1)(a) of the Social Security Act 1998 provides that any decision of the Secretary of State made under section 8 or 10 which is made on a claim for, or an award of a relevant benefit, and does not fall within Schedule 2 (decisions against which no appeal lies) is appealable to the First-tier Tribunal. A decision to reduce an award in accordance with the provisions contained in clauses 26, 27, 46 and 54 will be a supercession decision made under section 10 on an award of a relevant benefit, and will therefore be appealable.

(Q 21) I would be grateful if you could provide us with annual statistics on the number of sanctions decisions subject to appeal, including the number of appeals which are successful and the number of appeals which are rejected.

73. In 2010-11 there were 594,500 conditionality-related JSA sanctions and 164,700 JSA disallowances (where claimants had failed to meet the conditions of entitlement of actively seeking and being available for work; had failed to attend an interview or had failed to agree their jobseeker's agreement), and 15,780 appeals against such JSA sanction and disallowance decisions.

74. The Secretary of State's original decision was upheld in approximately 87% of cases. It is important to note that when a decision is overturned, it does not necessarily mean that the original decision was incorrect based on the available evidence at the time it was made. There are many factors that can affect the outcome of an appeal, for example, a common reason for a decision being overturned is additional evidence being provided that was not available to the original decision maker.

75. If a claimant on income support because they are a lone parent, or on ESA and in the work-related activity group fails to attend or participate in a mandatory work-focused interview without good cause, a sanction is applied. In 2010-11, there were 9,280 sanctions applied in relation to ESA claimants, and 76,400 sanctions applied to lone parents on income support. Data on appeals against ESA and income support sanctions and data on the number of sanctions applied to income support claimants outside the lone parent regime is not publicly available.

(Q 22) Please provide a fuller explanation of the Government's view that the provisions in clause 100 which reinstate the power of the Secretary of State in connection with the supercession of tribunal decisions is compatible with Article 6 ECHR.

76. The effect of clause 100 is to re-instate references that existed before 2008 to ensure that the legislation concerning supercessions is consistent. Currently, the legislation makes provision for a decision maker to supercede decisions of the First-tier Tribunal or the Upper Tribunal, but (as the result of a drafting error in the Transfer of Tribunal Functions Order 2008 made under the Tribunals, Courts and Enforcement Act 2007) makes no reference to decisions made by the appeal bodies that were abolished in 2008.

77. Taking social security cases as the example, a "superseding" decision made under section 10 of the Social Security Act 1998 (decisions superseding earlier decisions) would itself carry appeal rights in accordance with the provisions of section 12 of that Act (appeal to the First-tier Tribunal). This, therefore, ensures that the powers in section 10, including as they would be amended by clause 100, can be exercised compatibly with ECHR Article 6.

78. Similar provision for appeals is made in relation to housing benefit and council tax supercession decisions (see paragraph 6 of Schedule 7 to the Child Support, Pensions and Social Security Act 2000 and in the case of child support (see section 20 of Child Support Act 1991).

(Q 23) Please provide a more detailed explanation of the Government's view that the proposed information sharing gateways in clauses 123-128[68] of the Bill will operate in a manner which is compatible with Article 8 ECHR. In particular, please provide details of any relevant safeguards which will be in place to ensure that the information shared between public authorities and private contractors will be handled in a manner which is compatible with the Data Protection Act 1998 and Article 8 ECHR.

Clause 124

79. The measures set out in Clause 124 will consolidate and simplify a number of existing gateways between HMRC and the Department for Work and Pensions. Relevant repeals are set out in Part 13 of Schedule 14 to the Bill. The criminal offence of unauthorised disclosure of information in section 123 of the Social Security Administration Act will continue to apply.

80. To strengthen existing protections for shared information, the new gateway in clause 124 will be permissive and will replace certain mandatory gateways. As a result, both Departments will have to assess the risk and necessity of any requests to share information and any onward disclosure of shared information will have to be authorised by the originating Department.

81. Strict data sharing protocols and access controls are already in place in relation to data-sharing between the Departments under existing provisions. These have been drawn up having regard to the need to comply with data protection requirements and human rights law. Work is already in hand to develop these, and where necessary strengthen them, so as to operate effectively in relation to universal credit and the new gateway. The relevant privacy impact assessments will also be updated, where necessary.

82. Both Departments routinely share information with third parties who provide services to them under contract. The provisions contained in clause 124 will extend to those service providers but the permission of the originating Department must first be obtained to any information-sharing with them. Contracts will be put in place to state that service providers are acting on behalf of Department for Work and Pensions and/or the Commissioners of HMRC. As such the service providers are effectively carrying out Departmental functions and are required to take on the same responsibilities of those Departments. This, therefore, means that the statutory duty of confidentiality and the criminal sanction also attaches to any information that is shared with them. In order to achieve the assurance that both Departments require under this gateway (clause 124) the contracts will also contain full details of how any data must be stored and disposed of and other specific requirements with which the service provider must comply in order to secure compliance with both the Data Protection Act 1998 and the ECHR.

83. To provide practical assurance that information will be safeguarded, a memorandum of understanding will be drawn up and signed by all relevant parties. This will detail: (1) the information to be shared; (2) how it may be used; (3) how it will be stored; (4) retention periods and secure disposal or decommissioning procedure, and provide for controlled access to the data. The memorandum of understanding will also state whether any onward disclosure is to be permitted and, if so, for what purpose and with whom, and the security arrangements and standards required for the process. Service providers will be expected to have similar clauses in contracts with any private contractors who provide a service to them or exercise functions on their behalf.

84. Memoranda of understanding and contracts are reviewed periodically in collaboration with service providers and the Department retains the right to test all aspects of data security and handling carried out on the part of service providers during the course of the contract. This may include provision of assurance certificates, providing up-to-date documentation at regular periods to show that standards are being maintained and personal inspection or audit of the data security arrangements.

Clauses 125 to 128

85. The information gateways provided for in clauses 125 and 126 are required in order to make it easier for individuals to receive certain welfare services or help with housing costs. Currently individuals have to provide detailed financial information to different parts of government each time they apply for a benefit or service. Normally such information can only be shared where the person has consented. Having a legal gateway allowing such data to be reused for a number of different beneficial purposes will ensure the individual can access certain benefits and services more easily. The majority of individuals affected will be people who are disabled, elderly or vulnerable and they often find the application process for benefits and services more difficult than other claimants.

86. The measures in clause 127 provide that any person who misuses data that is shared under clause 126 will be guilty of an offence, and the measures in clause 128 are supplementary provisions that apply to clauses 125 and 126.

87. The Department for Work and Pensions already has an established process in relation to setting up new data sharing arrangements. A detailed implementation plan will be designed and agreed with local authorities before any data sharing under these provisions takes place. We will test these where appropriate, in order to identify the precise amount of data that needs to be shared, and the method by which it will be transferred. Detailed guidance will be provided to staff who will be implementing the new provisions. This will include advice relating to safeguards, retention and storage, onward disclosure etc. A privacy impact assessment will be produced, setting out the proposed arrangements. The requirements of the Data Protection Act 1998 will be adhered to, for example, a privacy notice will be produced to ensure that when individuals supply their data in the first instance they will be advised that if they subsequently apply for one of the other prescribed benefits or services their data may be re-used for that new purpose.

88. Information is already routinely shared between the Department for Work and Pensions and local authorities in relation to the administration of housing and council tax benefit. A number of measures are in place in order to ensure data is safeguarded. These include a memorandum of understanding which all local authorities must sign up to; access to data being given only to accredited staff; regular checks to make sure staff only access data in accordance with the memorandum of understanding; and secure electronic networks for the transfer of data. The Department for Work and Pensions intends to apply such measures to any new data sharing arrangements under the provisions in clauses 125-126.

89. Local authorities are expected to ensure that they have similar protections in contracts with any private contractors that are providing service to them or exercising functions on their behalf. In any supply or use of information under any of these provisions, a public authority has to act compatibly with Convention rights and in accordance with the requirements of the Data Protection Act 1998, in particular, compliance with the first and third Data Protection Principles.

90. There is at present no policy intent for the Department for Work and Pensions to disclose data to private contractors under clauses 125 and 126. However, should a situation arise in the future where this is required, data will only be supplied where there is a contract in place setting out the minimum security requirement that the contractor must adhere to with respect to data provided by the Department. For example, this will include ensuring that their staff receive training on data protection issues, are made aware of the criminal offence provisions which relate to the data sharing and to ensure that there is restricted access to data supplied by the Department.

(Q 24) Has the Government consulted with the Information Commissioner about the scope of the information sharing gateways proposed in clauses 123-128 of the Bill?

91. The Department for Work and Pensions consults with the Information Commissioner on data protection matters and, in establishing protocols to protect personal information, has had regard to all relevant guidance from him.

92. The Department for Work and Pensions holds regular meetings with the Information Commissioner's Office to discuss data sharing issues in relation to the use of social security information. These meetings provide an opportunity to review our security measures on a regular basis. In addition, the Information Commissioner's Office was invited to comment specifically on these measures and clauses, as part of a consultation exercise earlier in the year. They did respond and their comments have been fully taken into account. Further discussions will take place with the Information Commissioner's Office once the Department for Work and Pensions has developed more detailed plans for implementing the new measures.

(Q 25) We would be grateful if the Government could provide an explanation of how it considers the Social Mobility and Child Poverty Commission will help meet the UK's obligations under the International Covenant on Economic and Social Rights and the UN Convention on the Rights of the Child to secure an adequate standard of living for children and their families.

93. The new Social Mobility and Child Poverty Commission will have an extended remit which will include social mobility as well as child poverty. The Commission will produce independent annual reports assessing progress towards reducing child poverty and increasing social mobility, and towards meeting the child poverty targets and implementing the UK's child poverty strategies. The Commission will provide independent expert scrutiny of the strategy which the Government has developed to meet the 2020 target set out in the Child Poverty Act 2010. This will improve the accountability of Government in relation to eradicating child poverty, thus helping to meet UK obligations under the International Covenant on Economic and Social Rights, and the UN Convention on Rights of the Child.

(Q 26) Please also explain how the other changes in the Bill to the Child Poverty Act 2010—including the removal of the duty on the Secretary of State to report to Parliament—will help meet the UK's obligations under the International Covenant on Economic and Social Rights and the UN Convention on the Rights of the Child to secure an adequate standard of living for children and their families.

94. The duty to report is now an obligation of the Commission, rather than the relevant Secretary of State, to provide independent expert scrutiny of the child poverty strategy. The three key changes to the Child Poverty Act 2010 are:

1) The expansion of the remit of the Commission, so that it can consider social mobility and the root causes of poverty;

2) Moving the requirement to produce an annual progress report from the Secretary of State to the Commission, therefore improving ministerial accountability; and

3) The removal of the Commission's advisory functions, therefore improving ministerial accountability.

95. These three changes will ensure there is a better framework in place for driving action towards the 2020 targets, and will create a more effective Commission that can assist the Government in its goal of reducing child poverty.

(Q 27) I would be grateful if you could provide us with an update on the Government's position on the UK reservation to Article 13 UNCRPD. In particular:

b. please provide further information on the progress of the design and piloting of the proposed system of review;

c. if "design work" is due to be completed in 2011, please provide a target timetable for legislating to introduce a review mechanism which is compatible with Article 13 CRPD;

d. in the light of this timetable, is there any prospect that these reforms may be introduced as late amendments to the Welfare Reform Bill?

e. if not, can the Government explain why the timescale for design of the relevant procedures have been so lengthy as to preclude their introduction in this Welfare Reform Bill?

f. After the introduction of legislation on this issue, does the Government intend to remove the UK reservation to Article 13 UNCRPD? If not, please provide an explanation.

96. The UK Government ratified the UN Convention on the Rights of Persons with Disabilities on 8 June 2009 and the Convention came into effect on 8 July 2009.

97. On ratification the UK entered a reservation in relation to paragraph 4 of Article 12 (Equal Recognition Before the Law) (not Article 13 as referred to in the Committee's letter).

98. Article 12.4 reads as follows:

States Parties shall ensure that all measures that relate to the exercise of legal capacity provide for appropriate and effective safeguards to prevent abuse in accordance with international human rights law. Such safeguards shall ensure that measures relating to the exercise of legal capacity respect the rights, will and preferences of the person, are free of conflict of interest and undue influence, are proportional and tailored to the person's circumstances, apply for the shortest time possible and are subject to regular review by a competent, independent and impartial authority or judicial body. The safeguards shall be proportional to the degree to which such measures affect the person's rights and interests.

99. The UK's reservation to this provision states:

The United Kingdom's arrangements, whereby the Secretary of State may appoint a person to exercise rights in relation to social security claims and payments on behalf of an individual who is for the time being unable to act, are not at present subject to the safeguard of regular review, as required by Article 12.4 of the Convention and the UK reserves the right to apply those arrangements. The UK is therefore working towards a proportionate system of review.

100. A reservation was necessary because no review process was in place in relation to benefit appointeeships under regulation 33 of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968).

101. Work to design and test a suitable review process has been taken forward by the Pension and Disability Carers Service. There was initial consultation with representatives of Equality 2025 (a non-departmental public body whose members have a disability, and which offers strategic advice to Ministers and senior Government officials on issues affecting disabled people) and a small stakeholder group which included representatives from Age UK and local government social care, and with members of the PDCS Advisory Forum (which comprises 22 organisations representing a broad range of claimants including pensioners, disabled claimants of all ages, and carers).

102. An equality impact assessment for the proposed review process was published in September 2011 and can be viewed at:


103. A business test was undertaken from October 2010 to January 2011. This was designed to test the effectiveness and efficiency of different communication methods as well as providing a review of the existing appointee arrangements in the individual cases selected. The results showed that the most appropriate review method was postal.

104. The postal review method involves sending a form to the appointee which first reminds them of their responsibilities as an appointee e.g. that they must always act in the best interests of the benefit customer, must tell the Department for Work and Pensions if the claimant becomes capable of managing their own affairs, report any changes in the claimant's circumstances, pay care home fees, not take a fee from the benefit for acting as an appointee; it then asks specific questions about the claimant's capabilities; finally, it asks the appointee to sign a declaration that he has met and will continue to meet his responsibilities. A failure to reply or to answer in a way which raises concerns may result in the appointment being revoked.

105. The postal method reflects the requirement to introduce a proportionate system of review. In developing the review system we have been mindful of balancing the need for the system to be as robust as possible but without being too onerous for the customer or the Department.

106. For claimants, we want a system that offers adequate safeguards but avoids being overly intrusive. The Department is keen to avoid damaging the implicit covenant of trust that is established by the Secretary of State's approval of an appointeeship. This is particularly important where it is a parent/child relationship. A heavy-handed approach could actually result in existing appointees choosing to relinquish their appointments, or could deter new appointees from coming forward.

107. The proportionate approach ensures that the system is deliverable. There are currently around 725,000 appointees—and this number is growing—and so this necessitates a light-touch approach, with appropriate follow up activity as required.

108. The Department recognise that within these constraints it cannot develop a system that will eliminate all potential for financial abuse. The approach has therefore been to ensure that the role and responsibility of appointees is made as clear as it could be; and that the new review system acts as a deterrent to them acting otherwise by letting them know that at some point in time we would review that role.

109. The Department for Work and Pensions plans to begin to introduce the review process from this autumn. However, the review process is subject to a final strategic confirmatory decision by the Department. This decision will not be made until November and we will write to the Committee again at that stage to confirm the latest situation as regards introduction of the new process.

110. The new review process does not require legislation because regulation 33(2)(a) of the Claims and Payments Regulations (SI 1987/1968) already contains an unlimited discretion for the Secretary of State to revoke a person's appointment as an appointee. No changes to regulations are required, still less any new provision in the Welfare Reform Bill.

111. The Government is satisfied that what is being put in place meets the requirements of Article 12.4 and accordingly will remove the reservation once the new review process is fully operational.

26 September 2011

67   References to clauses in the Welfare Reform Bill are to version HL Bill 75, as brought from the Commons. We note that references to the Bill in the Committee's letter are to the earlier version, Bill 197.  Back

68   Clauses 123 to 128in the version of the Bill as amended in Public Bill Committee (Bill 197), are now numbered as clauses 124-129 in the House of Lords version (HL Bill 75).  Back

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