Benefit Claimants Sanctions (Required Assessment) Bill 2016-17

The Benefit Claimants Sanctions (Required Assessment) Bill 2016-17 is a Private Member’s Bill introduced by Mhairi Black MP.  The Bill – “to require assessment of a benefit claimant’s circumstances before the implementation of sanctions; and for connected purposes” – is due to have it Second Reading on 2 December 2016.

What are benefit sanctions?

A benefit sanction – withdrawal of benefit or a reduction in the amount of benefit paid for a certain period – may be imposed if a claimant is deemed not to have complied with a condition for receiving the benefit in question.  Benefit sanctions are not a new feature of the social security system, but there is widespread concern among welfare rights and pressure groups about the incidence and impact of sanctioning, particularly since new “conditionality” regimes for Jobseeker’s Allowance and Employment and Support Allowance claimants were introduced in late 2012. 

Between October 2012 – when the new JSA regime was introduced – and June 2016, just over 2 million sanctions were imposed on JSA claimants.  Between December 2012 and June 2016, around 82,400 sanctions were imposed on ESA claimants. Statistics on sanctions imposed on Universal Credit claimants are not yet available.

Recent policy developments

In 2013 the Coalition Government appointed an Independent Reviewer to look at the clarity of communications between Jobcentre Plus and claimants in relation to JSA conditionality and sanctions, the availability of hardship payments to those who are sanctioned, and the clarity of the review and appeals process.  The report by the Independent Reviewer – Matthew Oakley – was published in July 2014 and the Government said that it accepted, either fully or in principle, all of its 17 recommendations.  Some commentators have however questioned whether the Government’s response fully addresses the issues raised by the Oakley review.

In March 2015 the Work and Pensions Committee published a report, Benefit sanctions policy beyond the Oakley Review, which recommended, among other things, that the Government take urgent steps implement fully the outstanding recommendations from the Oakley Report.  Other recommendations included a series of evaluations to increase the evidence base around the efficacy and impacts of the new sanctions regime; better training for Jobcentre staff on the lone parent flexibilities; developing guidance to assist staff to identify vulnerable claimants and tailor conditionality according to the claimant’s individual circumstances, expediting the evaluation of the JSA “claimant commitment”, including a review of the appropriate use of jobseeker directions; a small-scale pilot to test the efficacy of a more targeted approach to sanctions based on “segmentation” of claimants by their attitudes and motivations; and a review of ESA sanctioning within the Work Programme.  The Committee also recommended changes to hardship provision, including making all hardship payments available from the start of sanctions periods, and putting the onus on the Department to initiate the hardship process for vulnerable claimants and those with children.

In its response to the Committee in October 2015, the Government made a series of announcements including its intention to trial a “yellow card” warning system whereby claimants would be given 14 days to provide evidence of “good reason” before imposition of a sanction; reintroducing automated JSA sanction notifications; new guidance to jobcentre plus staff to improve awareness of vulnerability and how conditionality can be varied; and changes to hardship provision including accepting in principle that payments should be available from day one, removing the necessity of a separate application process for vulnerable claimants and those with children, and extending the definition of groups considered “at risk” for hardship purposes to include homeless people and those with mental health conditions.  The Government did not however accept the Committee’s recommendation that it establish a “broad independent review of benefit conditionality and sanctions” to investigate whether sanctions are being applied “appropriately, fairly and proportionately, in accordance with the relevant Regulations and guidance.”

Effectiveness and impact of sanctions

The Government states that international evidence clearly shows that benefit regimes supported by conditionality reduce unemployment, and that the sanctions system in the UK is clear, fair and effective in promoting positive behaviours to help claimants back into work.  It also maintains that only a small minority of claimants are affected by sanctions, and that the actions it is taking will further strengthen safeguards against inappropriate sanctioning.

A recent study funded by the Economic and Social Research Council found however that for most claimants, welfare conditionality and sanctions was a wholly negative experience, creating widespread anxiety and feelings of disempowerment.  Routinely, sanctions had severely detrimental financial, material, emotional and health impacts on those subject to them, and applying conditionality appeared to cause some people to disengage from support.  The study found limited evidence that conditionality brought about positive behaviour change, the common thread linking stories of successful transitions into work being the availability of appropriate individual support rather than the threat of sanctions.  Other research has linked sanctioning to food insecurity and demand for food banks, and to destitution.

National Audit Office report

A new report from the National Audit Office recommends that the Department for Work and Pensions carries out a wide-ranging review of benefit sanctions, particularly as it introduces further changes to labour market support such as Universal Credit.  The NAO believes that DWP has not used sanctions consistently, noting that sanction referral rates have risen and fallen over time in ways that cannot be explained by changes in claimant compliance.  NAO concludes that management focus and local staff discretion are likely to have had a substantial influence on sanction rates.

The NAO finds that while international studies show people who receive sanctions are more likely to get work, the effect can be short-lived, lead to lower wages and increase the number of people moving off benefits into inactivity.  NAO also notes that DWP has not used its own data to evaluate the impact of sanctions, and recommends that the Department do more to understand sanctions outcomes.

The Bill

Mhairi Black’s Bill has been informed by an online consultation which received over 9,000 responses.  The Bill – which extends to England, Wales and Scotland – would require an assessment of a benefit claimant’s circumstances to be carried out before a sanction can be imposed on them.  A Code of Conduct would set out the procedures to be followed when carrying out assessments, including how consideration should be given to the claimant’s caring responsibilities, mental and physical health and well-being, and housing situation.  Where a sanction is imposed, the person must be assessed to determine whether they are eligible for hardship payments.

The Bill would also require that before drawing up or reviewing a “claimant commitment” – the record of a Universal Credit recipient’s responsibilities – the person is given advice on their rights and entitlements.  The Bill also requires claimant commitments to include details of the person’s caring responsibilities, health and well-being, and housing situation.

Further provisions in the Bill would mean that a “higher-level sanction” cannot be imposed on a Universal Credit claimant for certain sanctionable failures if the failure was due to the person’s mental ill health, homelessness or caring responsibilities.  The Bill also provides that a sanction cannot be imposed on a person claiming any benefit where the person had “just cause” for acting in the way they did.  The matters to be taken into account when deciding whether the person had just cause would be set out in primary legislation.