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Lord McCarthy: My Lords, the noble Lord is quite right in that one damned thing leads to another and we thank him for this amendment.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 95:

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Page 17, line 20, leave out from beginning to ("payable") in line 24, and insert ("In such circumstances as may be prescribed, an income-based jobseeker's allowance shall be payable to a claimant even though section 18 prevents payment of a jobseeker's allowance to him.
(3A) A jobseeker's allowance shall be payable by virtue of subsection (3) only if the claimant has complied with such requirements as to the provision of information as may be prescribed for the purposes of this subsection.
(3B) Regulations under subsection (3) may, in particular, provide for a jobseeker's allowance payable by virtue of that subsection to be—
(a) payable at a prescribed rate;
(b)") .

The noble Lord said: My Lords, Clause 19(3) provides the powers to make hardship payments of JSA to claimants who are under a sanction imposed for one of the "offences" set out in Clause 18. This amendment has two purposes. First, it corrects a deficiency in the original draft of the Bill which would have restricted hardship payments to people whose original claim to JSA was income-based. This would have meant that someone who was claiming contribution-based JSA only could not have received a hardship payment even though he satisfied the conditions for income-based JSA. The issue arises because, although the personal rate of JSA will be the same by both routes, legally the contribution-based allowance takes priority. Consequently, people who could establish both a contribution-based and an income-based entitlement, of equal amounts would only be claiming contribution-based JSA. The amendment ensures that any JSA claimant can receive hardship payments if he satisfies the relevant conditions since it removes the original qualification that they be made only where an income-based jobseeker's allowance would otherwise be prevented from being paid by Section 18.

Secondly, the new subsection (3A) allows for the adjudication officer to seek additional information from the claimant to ascertain whether he is in a vulnerable group, and whether there would be hardship if benefit were denied. There are already powers to require information in the Administration Act where this is necessary to determine a claim. This cannot apply in these cases since the claim will by definition already have been determined, but benefit will not normally be payable because of the sanction. This amendment ensures that proper provision is in place to carry out the policy intentions which we have already made clear. I commend it to your Lordships. I beg to move.

Baroness Hollis of Heigham: My Lords, obviously we accept the need to have hardship payment for those on contributory non-means-tested JSA. Clearly also, we do not move from our view that if somebody is getting means-tested JSA, which means obviously that their partner is not in work and that they have virtually no other earnings and very modest savings, that of itself is a test of hardship. That was the position which we argued at Committee.

Given that the Government nonetheless are persisting in having a definition of "hardship" which is more severe than that for the means-testing of JSA, perhaps I may use this opportunity to ask the Minister to clarify what that additional test of hardship will mean. First,

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will a person be expected to use up all of their savings before being eligible for hardship payments? At the moment, under means-tested JSA, there is an income scale of £1 for every £250 for savings of between £3,000 and £8,000 for a couple. Will those savings have to be wiped out before there is eligibility for hardship payments?

Secondly, what types of income, normally ignored, will be counted? Will the disability living allowance be included? Will there be the usual disregard of £10 per week for charitable or voluntary payments?

Thirdly, what will claimants have to do to show that they have no alternative access to funds? Will they have to show that they have tried the Social Fund but been refused? Will they have to show that they have tried a bank for a loan but been refused? Will they have to show that they have pestered relatives or charities but been refused? In other words, once the Minister has gone down the path of saying that "hardship" is be be even more harshly defined than "eligibility" for means-tested JSA, it would be helpful to the House if, at the very least, we could know what he has in mind for the basis of that test.

Lord Mackay of Ardbrecknish: My Lords, I am happy to respond to that, although it takes us back to earlier discussions when I was armed with some information on the subject—but I am armed again. So perhaps I can explain that we shall be carrying forward current practice for hardship payments in income support. It is for the adjudication officer to decide whether to award a hardship payment, taking account of the circumstances of the household and its access to alternative funds, including income from savings or from other benefits. Having modest savings will not automatically debar someone from receiving a hardship payment. For example, provision will be carried forward for a 20 per cent. reduction to apply—rather than a 40 per cent. reduction—where the household has capital of under £200 and a family member is pregnant or seriously ill. The question of borrowing will also, as now, be dealt with on a case-by-case basis. In some cases, it may appear to the adjudication officer that a claimant may reasonably look for support to a family member, particularly if the period covered by the benefit sanction is short.

In JSA we shall be specifying in regulations that the adjudication officer must take into account the duration of the shortfall of funds—a matter which is currently left to guidance in income support. However, the claimant's representation of hardship will cover not only his circumstances but also why the non-payment of JSA would result in that hardship. It will be for the claimant to satisfy the adjudication officer that he has no alternative source of funds. A hardship payment is made, by definition, to someone who in principle has forfeited his right to JSA. The payment is a safety net and any safety net has to rely on a fair amount of discretion. I hope that I have answered the points made by the noble Baroness and I commend the amendment to the House.

On Question, amendment agreed to.

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Lord Mackay of Ardbrecknish moved Amendment No. 96:

Page 17, line 26, leave out subsections (4) to (6).

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Schedule 1 [Supplementary Provisions]:

Lord Carter moved Amendment No. 96ZA:

Page 34, line 23, at end insert:

("Period of entitlement

2A. Where a person has been assessed as capable of work under Part XIIA of the Benefits Act, but has been awarded one or more points in respect of one or more of the descriptors applied under the all-work test; the period for which he is entitled to a contribution-based jobseeker's allowance shall not exceed, in the aggregate, 364 days in any period for which his entitlement is established by reference (under section 2(1) (b)) to the same two years.").

The noble Lord said: My Lords, as the Minister has surprised my noble friends Lady Hollis and Lord McCarthy, it is only fair to give him a chance to surprise me by accepting this amendment. The purpose is to reinstate the 12 months' contributory JSA to disabled people. The matter has been discussed previously. The amendment protects disabled people from the reduction in contributory benefit from 12 months to six. We know that disabled people take longer than non-disabled people to find work because of their disability or, in some cases, because of a negative attitude to disability and health problems on the part of prospective employers.

With at least 150,000 more disabled people expected to sign on as unemployed for JSA, the scale of the problem will be greatly increased. For example, someone who scored below the threshold for incapacity benefit could, nonetheless, have a substantial disability even though that person would be considered theoretically capable of all work. That is a problem we have discussed on previous amendments.

I am advised by the Disability Alliance that demands on the specialist expertise of disability employment advisers are likely to increase far beyond the numbers for which the Government expect to cater, as a result of removing thousands of disabled people from incapacity benefit. Only 29,000 of the 150,000 people expected to sign on (about one-fifth) will be referred to placing assessment and counselling teams. There is already evidence of long waiting lists to see DEAs. Some people have to wait three months to be seen in the first place. One disabled person had to wait for over six weeks for a DEA to arrange a job introduction scheme.

In effect, a disabled person can spend almost all of the period of contributory JSA waiting for assessment and a suitable training placement. A shorter period of contributory benefit could therefore affect disabled people disproportionately. Reinstating the 12-month duration of contributory JSA to people coming off incapacity benefit will cost about £10 million a year. That information was given in a Written Answer in the Official Report of the other place on 9th May l995 (col. 394).

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When a similar amendment was debated in the other place in Committee the Minister stated that the proper way to help disabled people was through the Disability Discrimination Bill. If that is in the Minister's brief, when he replies perhaps he will tell us how it is proposed to do that. As it stands, it will relax the necessary enforcement procedures needed to ensure that it is implemented fully; and, of course, the exemption from the Bill of small employers will not help those people who are seeking employment in companies with fewer than 20 people—that is, 96 per cent. of all employers.

We have tried to deal with the problems of disabled people throughout the Bill. The amendment would put right an obvious injustice at, as I said, a cost of about £10 million.

The main reason put forward by the Government for reducing the current duration of unemployment benefit to six months under the JSA is that the majority of claimants have only a short spell of unemployment lasting six months or less. A recent parliamentary Answer suggests that 44 per cent. have spells of unemployment lasting less than six months.

We know that the position is bound to be different for disabled people. There is evidence to suggest that many disabled people actively looking for work take a considerable time to do so and therefore could be substantially disadvantaged by a shorter period of contributory benefit. An excellent report entitled Employment and Handicap was produced in 1990 by Social and Community Planning and Research. I shall not go through all the evidence, but it shows without any doubt that disabled people take much longer to find work than do non-disabled people.

There is also the business of training. We know that unemployed disabled people receive priority on training courses for training for work. However, the way training finance operates means that while there is a financial incentive to take on disabled people—there is double the start payment and eight times the outcome payment—providers will have an incentive to take on only those disabled people who they are confident will complete the programme, gain qualifications and find work.

There are many disabled people, especially those moving from incapacity benefit, who are unlikely to meet the requirements of providers looking for a quick throughput for their programmes. If we take the greater disadvantage which already faces disabled people in the labour market, to cut six months from their contributory benefit is little short of mean. Reinstatement to that group of people is unlikely to cost the Government much, but it will make a massive difference to disabled people themselves. I beg to move.

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