Background

Currently, unemployed partners of JSA claimants are not required to be available for or actively seek work. There is no targeted help and support available to assist them to return to work if they wish to do so. Ninety per cent of partners of JSA claimants are women.

Under the new scheme, an unemployed couple who do not have responsibility for children and who belong to the group to be defined in regulations, will be required to make a joint claim for JSA and each will have to satisfy the conditions of entitlement to the benefit. Regulations will prescribe which couples will be covered by the requirement by reference to a date of birth. It is intended that the requirement will apply to couples where one or both members of the couple is aged under 25 when these measures are introduced. At least one member of the couple must have reached the age of 18.

Both partners will therefore have the same opportunity to receive help and guidance to return to work and to go onto employment programmes including the New Deal for Young People.

The basic conditions of entitlement to JSA are set out in section 1 of the Jobseekers Act. They include the requirement for the claimant to be available for and actively seeking employment and to have a "Jobseeker's Agreement" (i.e. an agreement which is entered into by the claimant and an employment officer which specifies the steps that the claimant will take in order to seek employment - as defined at section 9(1) of the Jobseekers Act).

There are currently two routes to JSA:

Contribution-based JSA is payable only to a person who, in addition to satisfying the conditions contained in section 1 of the Jobseekers Act, satisfies the National Insurance contribution conditions (section 2 of the Jobseekers Act). It is payable at a personal rate and includes no additional payments for any dependants of the claimant. Both members of a couple may separately qualify for contribution-based Jobseekers Allowance if they each satisfy the contribution conditions on the basis of their own contributions record.

Income-based JSA is an income-related benefit for which the claimant must satisfy the conditions specified in section 3 of the Jobseekers Act in addition to the entitlement conditions at section 1. One member of a couple claims for himself and for any dependants.

The Bill introduces a third route to JSA: "joint-claim Jobseeker's Allowance", which will apply in certain cases where JSA is claimed for a couple. This is a sub-category of income-based JSA.

Commentary

The joint claims provision for Jobseeker's Allowance (JSA) is introduced by clause54 which brings Schedule 7 into effect.

Schedule 7 amends the Jobseekers Act to provide for joint claims.

Paragraphs 1 to 16 of the Schedule amend existing provisions of the Jobseekers Act and insert new provisions.

Paragraph 17 makes a necessary change to the rules for social security appeal tribunals set out in the Social Security Act 1998.

Paragraph 2: Entitlement to a Jobseeker's Allowance

This paragraph amends section 1 of the Jobseekers Act which provides for entitlement to JSA. Provisions for entitlement to contribution-based JSA are unchanged.

Sub-paragraph (3) inserts a new section 1(2A) into the Jobseekers Act which provides that income-based JSA can only be claimed by a claimant who is not a member of a joint-claim couple. New subsection(2B) provides for the conditions of entitlement for a joint-claim couple.

The conditions of entitlement to JSA that joint-claim couples will have to meet are that the couple must claim jointly for the allowance and that they must each satisfy the conditions set out in paragraphs (a) to (c) and (e) to (i) of section 1(2) of the Jobseekers Act (for example, to be available for and to actively seek employment). They must also meet the conditions set out in the new section 3A, inserted by paragraph 3 of the Schedule (see below).

The couple will be covered by these requirements for so long as they claim JSA and their relevant circumstances remain unchanged. Examples of a relevant change for this purpose would be that the couple have a child or separate.

Paragraph 2(3) also inserts into section 1 two new subsections, (2C) and (2D). Subsection(2C) provides a power to prescribe circumstances in which a claimant who is a member of a joint-claim couple can nonetheless make a claim for JSA by virtue of the provisions at subsection(2A) (entitlement to JSA for claimants who are not members of a joint-claim couple).

Regulations will specify circumstances where one member of a joint-claim couple may make a claim on his or her own behalf. It is intended that this should apply where one of the joint claimants fails to satisfy the conditions of entitlement for the joint-claim set out in new section 1(2B) of the Jobseekers Act.

The other joint claimant who is prepared to meet the conditions of entitlement would then be able to claim contribution-based JSA under section 2 of the Jobseekers Act if he could satisfy the contribution-based conditions. If he could not satisfy the contribution-based conditions he would be able to claim income-based JSA on his own behalf, by virtue of subsection(2A). However, the couple's income and capital will be taken into account in determining the amount of income-based JSA which is paid. The award of JSA would thus be at the applicable single person's rate with no additional allowance for the partner who had failed to satisfy the conditions of entitlement for joint-claim JSA.

New subsection(2D) provides a power to prescribe in regulations how the provision for joint claims will be applied to the members of a polygamous marriage. The intention is that where one or more members of a polygamous marriage are born on or after the date set in regulations and there are no dependent children, two members of the marriage will be required to make a joint claim. One of the claimants will always be the male partner, but the members of the marriage will be able to choose which of the wives will be the other joint claimant.

Currently, polygamous marriages are recognised under the benefit system provided they took place in a country where such marriages are legal. The husband may make a claim for himself and for his dependants and receives an addition in respect of each of his wives.

Sub-paragraph (4)(b) defines a joint-claim couple as a married or unmarried couple who do not have dependent children. Regulations will further specify which couples will be covered by the requirement to make a joint claim. It is intended that this will be done by reference to the date of birth of members of the couple. The intention is that couples where at least one partner is born on or after the specified date will be covered by the requirement to make a joint claim. The date will be set so that, at introduction, a couple where at least one partner is aged under 25 and has reached the age of 18 will be covered. The provision would therefore extend, over time, to a couple of any age, so long as they do not have children and one of them was born after the prescribed date.

Paragraph 4: The conditions for claims by joint-claim couples

Paragraph 4 inserts sections 3A and 3B into the Jobseekers Act. These new sections set out the conditions which a joint-claim couple must meet to receive income-based JSA. Section 3A adapts the provisions of the current section 3 to deal with the circumstances of a joint-claim couple. The section also makes it clear that at least one member of the couple must have reached the age of 18. If the other member of the couple is 16 or 17 years old, he must have a direction from the Secretary of State under section 16 of the Jobseekers Act that (to prevent severe hardship) JSA may be paid to him or he must be in prescribed circumstances so that JSA can be paid, to satisfy the conditions in new section 2B(c) for a joint-claim couple to receive JSA. (These are the same situations in which, currently, a 16 or 17 year old may be named as a dependant on the JSA claim made by a person aged 18 or over.)

Section 3B deals with the new circumstance of payment of JSA to a joint claim couple. The joint claim couple have to decide which one of them will receive payment of JSA. If the couple express no preference or cannot agree to whom the payment should be made, the Secretary of State (i.e. a departmental official) will decide who receives the payment. In either case the payee will be known as the "nominated member". Provision is also made for the circumstances where the nominated member attracts a sanction under new section 20A introduced by paragraph 13. In these cases the other member of the couple, who has not attracted a sanction, will become the nominated member.

The legislation does not prevent direct payments to persons besides the nominated member. Like other JSA claimants, joint-claim couples may have a proportion of their JSA deducted and paid direct to a third party. This is usually applied where JSA claimants have part of their benefit paid direct to a fuel company or mortgage provider. In exceptional circumstances, for example where a claimant has budgeting problems due to alcoholism or gambling, the Secretary of State may use his discretion to pay all or part of a JSA award to the claimant's partner. This is extended to joint-claim couples so that the Secretary of State may make direct payment to the member of the couple who is not the nominated member.

Paragraph 5: Amount payable by way of a Jobseeker's Allowance

This amends section 4 of the Jobseekers Act which sets out how the amount of JSA payable to an individual claimant is calculated. It provides a method for calculating JSA where a joint claim has been made. Subsections (6) to (11) will not apply to joint claimants but corresponding provisions are included in new section 4A (see note on paragraph 6, below).

Paragraph 6: Amount payable by way of a joint-claim Jobseeker's Allowance

Paragraph 6 inserts new section 4A into the Jobseekers Act. It sets out how the amount of JSA payable to a joint-claim couple is calculated and paid where a joint claim has been made and where one or both members of the couple are also entitled to contribution-based JSA. In effect it corresponds to subsections (6) to (11) of section 4, which make similar provision for individual claimants. The effect is that where claimants are entitled to both contribution-based JSA and income-based JSA they will receive whichever gives them the greatest amount of benefit. This ensures that members of a couple may receive individual awards of contribution-based JSA where this is in their best interests, even though they have initially made a joint claim. Where contribution-based JSA is paid to an individual, instead of joint-claim JSA, the joint claim rules will not apply.

Paragraph 7: Attendance, information and evidence

This paragraph amends section 8 of the Jobseekers Act in order to adapt the provisions on attendance, information and evidence for joint claims. The intention is that joint claimants will be able to choose to attend the New Jobseeker Interview either with their partner or separately. Both jobseekers will be required to attend fortnightly interventions to show what action they have been taking to look for work, unless one member of the couple is exempted from the requirement to meet certain JSA conditions. They will both have a responsibility to provide information in connection with the furtherance of the joint claim.

Paragraph 8: The Jobseeker's Agreement

This amends section 9(12) of the Jobseekers Act, which provides that a Jobseeker's Agreement ceases to have effect when the claimant's award of JSA comes to an end, to adapt it for joint-claim couples. Regulations will provide for circumstances in which the Agreement will continue; for example, where the joint-claim couple start a family, the JSA claim will change to a single claim for the whole family. The Agreement may continue and be reviewed.

Paragraph 9: Income and capital

Paragraph 9 inserts new subsections (2A) and (2B) into section 13 of the Jobseekers Act to adapt it for the purposes of joint-claim couples. Section 13 deals with the treatment of income and capital on a claim for income-based JSA.

Paragraph 10: Trade disputes and joint-claim couples

This paragraph inserts a new section 15A into the Jobseekers Act. Sections 14 and 15 of the Jobseekers Act will have effect in relation to joint-claim couples in accordance with the new section 15A.

Currently a person involved in a trade dispute is not entitled to either contribution-based or income-based JSA. However, the partner of the person involved in the trade dispute may make a claim for income-based JSA for herself and any dependants, but no part of the allowance is payable for the person involved in the trade dispute.

The intention of new section 15A is to preserve the current situation with respect to joint-claim couples. Where both members of the couple are involved in a trade dispute and therefore prevented by section 14 from being entitled to JSA, the couple will not be entitled to joint-claim JSA. But where only one member is prevented from being entitled to JSA as a result of section 14, this alone will not prevent the couple from being entitled to a joint-claim JSA.

Currently where the partner of someone who is prevented from claiming JSA by virtue of section 14 makes a claim, the couple receives 50% of the appropriate applicable amount and premiums for the couple. A joint-claim couple who made a claim relying on section 15A would also receive an equivalent amount of JSA.

Paragraph 11: Reduced payments

This paragraph inserts new section 17(1A) into the Jobseekers Act. This provision mirrors section 17(1) of the Act. It provides a power for the amount of JSA payable to a joint-claim couple to be reduced where a member of the couple is a young person aged 16/17 years old and incurs a sanction.

Regulation 63 of the Jobseeker's Allowance Regulations (S.I. 1996/207) sets out the provisions for reducing payments in respect of a 16/17 year old who incurs a sanction and it is intended that similar provisions will apply to a 16/17 year old member of a joint claim couple.

Paragraphs 12-13: Circumstances in which Jobseeker's Allowance is not payable

Paragraph 13 inserts two new sections, 20A and 20B, into the Jobseekers Act. These parallel the existing sections 19 and 20, but apply to joint claims. Paragraph 12 inserts a reference to the new sections.

Section 19 of the Jobseekers Act provides circumstances in which JSA is not payable (sanctions). It provides for JSA not to be payable where, for example, the claimant has failed to apply for employment notified to him or has voluntarily left employment without good cause. Section 20 provides for exemptions to section 19.

Payment where one member of the joint-claim couple has breached new section 20A

Where one of the joint claimants breaches subsection (2)(a)-(g) of new section 20A, the claimant who has not contravened JSA rules will receive the amount of JSA payment equivalent to that which would be payable if he were to claim JSA on his own behalf. It is intended that regulations under the power provided in subsection(6) of new section 20A will provide that where the claimant who has not breached the rules meets JSA contribution conditions, he will be paid an amount of income-based JSA equivalent to the rate of contribution-based JSA for the duration of the period of the sanction, provided he continues to meet JSA entitlement conditions.

If he does not meet the JSA contribution conditions, he will be paid an amount equivalent to the amount of income-based JSA that he would receive were he to make a claim for income-based JSA on behalf of himself only (taking into account the couple's income and capital in determining the amount), provided he continues to meet JSA entitlement conditions.

New section 20A(7) provides that if the claimant who normally receives the payment of JSA is the person who has breached new section 20A, payment of the single rate of JSA for the duration of the sanction will be made directly to the other claimant member of the couple.

Where both claimants breach JSA rules, new section 20A(5)(a) provides that no JSA will be paid for the period during which both are subject to sanctions.

It is intended that regulations will also provide that where certain breaches of JSA rules attract a stoppage of JSA for two weeks for the first breach and a stoppage of JSA for four weeks for the second breach, the four week stoppage of JSA will apply only where the same partner on a joint claim contravenes the JSA rules more than once.

Paragraph 14: Termination of awards where another entitlement exists

This paragraph amends section 31 of the Jobseekers Act 1995 to extend it to joint-claim couples. It is a general rule that Income Support and JSA are mutually exclusive. In order to be entitled to JSA a person's award of Income Support must come to an end and in order to be entitled to Income Support a person's award of JSA must come to an end. Section 31 permits termination of awards for this purpose.

Paragraph 15: Interpretation

This paragraph amends the definition of "claimant" as contained in section 35 of the Jobseeker's Act to include a joint-claim couple claiming a joint-claim JSA or each member of such a couple as the context requires. It also inserts definitions for "joint-claim couple", "joint-claim Jobseeker's Allowance" and "the nominated member".

Paragraph 16: Entitlement without satisfying conditions

This paragraph amends Schedule 1 to the Jobseekers Act (Jobseeker's Allowance: supplementary provisions).

Sub-paragraph (2) inserts a new paragraph 8A which allows the Secretary of State to prescribe circumstances in which a joint-claim couple will be entitled to joint-claim JSA even though only one member of the couple satisfies the JSA conditions referred to in new section 1(2B)(b).

Exemptions are necessary to cater for those who are unable to meet the JSA conditions, for example, those who do not meet the capability condition (in section 1(2)(f)) because of illness or disability. Others who have extensive caring responsibilities or are studying full-time will not be able to meet the availability condition (in section 1(2)(a)).

The intention is not to disentitle such joint-claim couples where one member of the couple cannot meet the conditions either at the outset of the joint claim or during the claim. (Currently, the partner is treated as a dependant on the JSA claim and is not required to meet the JSA conditions.)

Regulations will specify the persons to whom the provision applies, but it is intended that the categories will include persons caring for another person, persons incapable of work and those studying full-time in certain circumstances.

Transition to a joint claim

New paragraph 8A(2) of Schedule 1 to the Jobseekers Act provides for regulations to prescribe circumstances in which a couple is entitled to income-based JSA, without having made a joint claim for it. Such a couple will be called a transitional couple (defined as one where a member is entitled to income-based JSA on the coming into force of Schedule 7 to the Bill). The intention is that the couple will be treated as meeting JSA conditions of entitlement until the new claimant member of the couple is required to attend and provide information in connection with the joint claim.

Continuity of claims and awards

This paragraph inserts new paragraphs 9A, 9B, 9C and 9D into Schedule 1 to the Jobseekers Act 1995. These paragraphs contain powers to prescribe circumstances in which an award of joint-claim JSA should be treated as continuing in the form of an award of income-based JSA or contribution-based JSA; an award of joint-claim JSA should lapse; and in which an award of joint-claim JSA may be revived without the need for the claimants to make a new claim. Provision is also made to cater for cases where a claim has not yet been determined.

The various powers cater for JSA claimants who have a change of circumstance, which means they either cease to be a joint-claim couple or become a joint-claim couple. The underlying aim is to avoid unnecessary bureaucracy and ensure that joint-claim couples are treated in the same way as other JSA claimants, whilst at the same time being able to require a fresh claim where this is necessary.

It intended, for example, to use the power to continue an award where a couple in receipt of joint-claim JSA have a baby and so cease to be a joint-claim couple but still need to claim JSA.

Claims yet to be determined and suspended payments

Sub-paragraphs (5), (6) and (7) of paragraph 15 amend paragraph 10 of Schedule 1 to the Jobseekers Act (claims yet to be determined and suspended payments) to allow regulations to prescribe when a joint-claim couple or a member of such a couple may be treated as entitled to income-based JSA before the claim has been decided. It is intended that regulations will specify the same circumstances as currently provided for JSA claimants in regulations.

They also allow for income-based JSA to be paid to the joint-claim couple or a member of such a couple where payment has been suspended. It is intended that regulations will specify the same circumstances as currently provided for JSA claimants in regulations.

Paragraph 17: Interpretation of Chapter II of Part I of the Social Security Act 1998

Paragraph 17 amends section 39(1) of the Social Security Act 1998 so that members of joint claim couples have a right of appeal jointly or separately.

Schedule 8: Paragraph 28

This paragraph amends section 124(1)(f) of the Contributions and Benefits Act which provides that a person is only entitled to Income Support if he is not entitled to Jobseeker's Allowance. Income Support and JSA are mutually exclusive benefits. As with the provision at paragraph 14 of Schedule 7, it ensures that this general rule is extended to joint claim couples.

Schedule 8: Paragraph 29

Sub-paragraphs (2) and (3) amend sections 4 and 17 respectively of the Jobseekers Act, to ensure consistency of wording with provisions in Schedule 7 to the Bill which introduces joint claims for Jobseeker's Allowance.

Clause 55: Special schemes for claimants of Jobseeker's Allowance

Background

This clause of the Bill enables the establishment of Employment Zones. Employment Zones are defined geographical areas where the Secretary of State for Education and Employment contracts with external organisations, either public or private, to try to help long-term unemployed claimants of Jobseeker's Allowance (JSA) to find sustainable employment.

Plans for Employment Zones were announced by David Blunkett, the Secretary of State for Education and Employment, on 2 February 1999, and consultation over the detailed elements of the proposals finished on 30 April 1999. Five prototype Employment Zones and three further, smaller-scale development projects were set up during 1998, under existing legislation. But in order fully to implement Employment Zones, primary legislation is needed in the following areas:

First, Employment Zones are concentrated on specific areas of high long-term unemployment; yet current legislation limits the Secretary of State's powers to alter the conditions of entitlement to JSA for different areas of the country;

Second, a key feature of Employment Zones not available in the prototypes is the "Personal Job Account". This will be an account set up for individual participants in the Zone- with the aim of getting them back to work more quickly. It will enable them to anticipate up to 6 months of the funding for training and jobsearch, combined with funds equal to the payments that they would normally receive from JSA.

Third, legislation is required so that, for example, when people do not conform to the requirements of the Employment Zone (e.g. fail to complete and agree an Action Plan with their personal adviser), without good cause, their JSA payments could be withheld.

Commentary

Subsection (1) enables regulations to provide for special arrangements to be made for JSA claimants in geographically defined areas to assist them to find sustainable employment. This subsection enables Employment Zone delivery agents to undertake schemes which may not be available elsewhere in the country. Schemes may also cover the whole of Great Britain.

Subsection (2) provides examples of provisions which can be included in regulations made under this section. One such provision (set out in subsection (2)(a)) would involve imposing further conditions upon recipients of JSA within an Employment Zone for receiving the benefit. Thus, they could be required to complete and agree an Action Plan with their personal adviser as a precondition for receiving JSA. Regulations made under this section could also suspend the normal labour market conditions, namely, actively seeking and being available for work, for those participating in a prescribed scheme. This is necessary because activities on an EZ may not be consistent with the usual JSA conditions.

Subsection (3) gives a power to apply the provisions of the Jobseekers Act with modifications.

Subsection (4) ensures that the provisions from the Act that may be applied in this way include the rules for when claimants do not meet the conditions of JSA, and the benefit is not paid.

Section 19 of the Jobseekers Act sets out the circumstances when sanctions may be applied to JSA claimants, and the benefit not paid. Examples are when someone has refused to accept a place on an employment programme, or lost that place through misconduct. Section 20A contains the parallel provision for joint-claim JSA introduced by Schedule 7 of this Bill (see commentary on clause 54 for details). Subsection (4)(a) provides that this sanctions regime may be modified for participants in an Employment Zone. The modified details (for example, the length of the sanction) would be set out in regulations (in the same way that the current details are set out in the JSA Regulations).

Section 20 of the Jobseekers Act (and the new section 20B for joint-claim JSA) provides for exemptions to the circumstances when JSA is not payable under section19 (or 20A). Examples might be where a person is ill, or on jury service. It also gives the power to define when hardship payments may be made to claimants, even though JSA is not in payment. Subsection (4)(b) ensures that these provisions may also be modified for participants in Employment Zones.

Subsection (5) enables the Secretary of State to associate himself, financially or otherwise, with arrangements to assist people into sustainable employment. In Employment Zones this may include contracting out and providing funding to Employment Zone delivery agents for the provision of the necessary services to assist people to find work.

Subsection (6) enables the Secretary of State to use the existing powers in section 26 of the Employment Act 1988 with respect to schemes operating under this clause. Section 26 gives the power to make an order covering:

details of the employment status of those participating in training schemes within an Employment Zone; and

details on how income gained while on the Zone should be treated for the purposes of other relevant legislation (e.g. legislation relating to tax or National Insurance contributions).

CLAUSE 56: INCAPACITY FOR WORK

Background

Entitlement to incapacity benefits is dependent on satisfying one of two tests of incapacity for work set out in legislation.

The 'Own Occupation Test' normally applies for the first 28 weeks of incapacity, for those with a recent work record. The test assesses the claimant's ability to do their usual job, based on medical evidence from their GP.

The 'All Work Test' applies after 28 weeks of incapacity for those with a recent work record and from the start of the claim in all other cases. It is a functional test which assesses the claimant's ability to perform a wide range of activities.

The benefits which depend on satisfying the test of incapacity for work are Incapacity Benefit (IB); Severe Disablement Allowance (but see clause 60); Income Support; the disability premiums in Income Support, Housing Benefit and Council Tax Benefit; and, in addition to these benefits, National Insurance credits awarded on grounds of incapacity.

The consultation paper A new contract for welfare: SUPPORT FOR DISABLED PEOPLE (Cm 4103) gave a commitment to reform the All Work Test, by changing it so that, as well as establishing the level of people's incapacity for work for benefit purposes, it provides information which will be potentially helpful to claimants and their personal advisers, in combination with a wider assessment of employability, to decide what might be done to assist a return to work. Summary of changes

Clause 56 and Part II of Schedule 8 work together to achieve this reform. Clause 56:

renames the All Work Test the "Personal Capability Assessment". This reflects the additional elements added by the clause and Part II of Schedule 8, which provide that, as well as producing information for benefit purposes, about people's incapacity,

the assessment process should produce information about people's capabilities; and that

both kinds of information may be used for the purposes of helping people enhance their employment prospects.

retains the existing powers for determining whether a person is "incapable of work" for the purposes of receiving incapacity benefits. The threshold of incapacity at which it would be unreasonable to require a person to work, or seek work, will be unchanged;

enables the Personal Capability Assessment process to be started earlier, with the intention of identifying people's needs as quickly as possible;

makes clear that the Personal Capability Assessment may be repeated at any time throughout the duration of entitlement to benefit.