Escalating conditionality

 

David Simmons describes the new conditionality regime for benefit claimants provided for in the Welfare Reform Bill 2011.

The Welfare Reform Bill 2011, which is current­ly before Parliament, provides for a new, tougher conditionality regime for benefit claimants. This reflects the growing political consensus in recent years, that work is the best route out of poverty, and that the benefit sys­tem should encourage claimants into work via enhanced ‘personalised conditionality’ – ie, di­rected mandatory activity to prepare for and obtain work. Ending what has been regularly described as the ‘something for nothing’ cul­ture of the benefit system is perceived to be a popular message to impart to the public and the media.

The new regime will be introduced into uni­versal credit, which is planned to replace in­come support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA), housing benefit and tax credits from October 2013 (see Bulletin 221). It will also be integrated into con­tribution-based JSA and contributory ESA after the introduction of universal credit. In ad­dition, the government intends to import ele­ments of the new scheme into IS, JSA and ESA prior to the introduction of universal credit – probably from sometime in 2012, depending on the passage of the Bill.

The framework of the new conditionality scheme is in the Bill.1 Clauses 13–30 relate to universal credit, clauses 44–49 to JSA, 53–56 to ESA and 58 to ISThe details will be in Regulations which have yet to be made. The government has published some illustrative draft Regulations to inform debate in Parliament, together with explanatory notes and policy briefing notes.2 Universal credit policy briefing notes 11–13 The details of the scheme are likely to change, however, so the information presented in this article may not remain wholly accurate.

The ‘claimant commitment’ is at the heart of the new conditionality regime. It is basically a record of a claimant’s individual responsibili­ties in relation to an award of universal credit. It will include details of:

Acceptance of a claimant commitment (either online – the default requirement – or by telephone or in writing, as specified by the DWP) will be a basic condition of entitlement to universal credit. Failure to agree a commitment will result in no benefit being paid. In the case of couples, both partners will have to accept an individual commitment (it is likely that the single rate of benefit will be paid if one partner does not accept a commitment).

Although the government has indicated that the commitment will be drawn up jointly by the claimant and a personal adviser, the legislation provides for a ‘top-down’ approach, with the record being prepared, reviewed and updated by the Secretary of State. The commitment has to be changed if the claimant moves into a different conditionality group (see below). Entitlement to benefit only arises if a claimant accepts the most up-to-date version of the commitment.

The Bill provides for the following four types of ‘work-related requirements’ with which claimants will have to comply (failure to do so will result in a benefit sanction):

Claimants can be directed to undertake specific activity and must demonstrate compliance with their work-related requirements by providing evidence and information and attending interviews with their personal adviser.

The introduction of ‘in-work conditionality’ through the requirement to prepare, look, and be available for more or better-paid work is a new concept.

The intention is to apply it to claimants below a ‘conditionality threshold’. For most claimants, the threshold will be set at the weekly national minimum wage for a 35-hour week. At current levels, this would be £212.80 for single claimants over 21, and £425.60 for couples (before tax). Claimants with young children, caring responsibilities and work-limiting health problems would have a lower threshold, equivalent to the weekly national minimum wage for the number of hours they are required to be available for work, as set out in their claimant commitment.

Claimants above the threshold would not be subject to conditionality. Those below the threshold would be subject to all the work-related requirements, including both members of a couple, unless one was already in full-time work. There will need to be (inevitably complex) rules on the calculation of pay, where it fluctuates.

Claimants will be able to move above the threshold by increasing their hours or pay in their current job, or finding new or additional employment. Their preferred option will determine the activity they will be expected to undertake to obtain more or better-paid work, but any requirements should be reasonable, proportionate and compatible with their current work commitments.

There will be four groups. Claimants may move into different groups as their circumstances change.

The following groups will not be subject to conditionality, although they will still normally have to accept a claimant commitment which will set out their responsibilities – eg, to report changes in circumstances:

The following groups will be required to attend work-focused interviews only:

Claimants with limited capability for work, as assessed by the WCA, will fall into this group. As now, they must prepare for work, but cannot be required to look for, or take up, a job. They are also exempt from compulsory mandatory work activity (four weeks’ unpaid work).

All other claimants will be subject to all the work-related requirements, including attending work-focused interviews, work preparation (including mandatory work activity and community work), work search and work availability. This will apply to jobseekers, those in work under the ‘conditionality threshold’ and claimants with a youngest child over five.

As currently, certain claimants in specified circumstances will be allowed to restrict their work search and availability, including:

Sanctions, in the form of loss of benefit, will be enhanced under the new system. The intention is to provide a ‘clear and strong’ sanctions regime, which will be easy to understand and explain, and which will incentivise claimants to meet their responsibilities.

There will be higher, medium and lower level sanctions. Where claimants incur more than one sanction, they will run ‘end to end’, rather than concurrently (as happens with some current JSA sanctions) and will resume on a reclaim for universal credit (less the number of days benefit was not in payment). Fixed-period

sanctions incurred in a ‘compliance period’ cannot exceed three years. Most sanctions will result in the loss of the standard personal allowance (currently £67.50 for single claimants over 25). In the case of claimants who are not receiving maximum universal credit, the reduction could eat into elements paid for children and housing costs. A sanction cannot reduce an award to less than zero. A sanction will cease if a claimant is no longer subject to workrelated requirements, and after a year of compliance if a claimant has been working for at least six months in that period.

These will apply to claimants subject to all work-related requirements who:

Losing a job or pay and failing to take up a job offer in the six months before claiming universal credit can also result in a sanction. ‘Good reason’ is likely to include factors such as health, language and literacy difficulties, caring responsibilities, the cost of childcare and transport problems. Much of the current caselaw on misconduct and voluntarily leaving is likely to apply.

The higher level sanction will normally be loss of the standard personal allowance for three months for a first failure, six months for a second higher level failure within a year, and three years for a subsequent failure within a further year. In the case of couples, the reduction will be 50 per cent of the standard couple allowance if one partner is sanctioned (100 per cent if both partners are sanctioned).

These will apply to claimants subject to all the work-related requirements who fail, for no good reason, to look, or be available for, work. The sanction will be loss of the standard personal allowance (50 per cent of the couple allowance) for four weeks for a first failure, and three months for subsequent medium level failures within a year of a previous failure.

These will apply to a failure, for no good reason, to undertake a specific work search requirement, a work preparation requirement, or attend a compliance interview (or provide evidence or information) or a work-focused interview. The sanction will normally be loss of the standard personal allowance (or 50 per cent of the couple allowance) until the requirement is met, plus a further fixed period of seven days for a first failure, 14 days for a second lower level failure within a year, and 28 days for a subsequent failure within a further year. For claimants required to attend work-focused interviews only, a failure to attend an interview for no good reason will result in the loss of 20 per cent of the standard personal allowance (or 10 per cent of the couple allowance) until an interview is attended. Failing to attend a second interview will result in a 40 per cent sanction (20 per cent of the couple allowance).

These will continue to be available during a sanction (immediately for vulnerable claimants and after 14 days for others), but may be recoverable and time limited.

The administration of the conditionality regime will be, as now, ‘contracted out’ to private and voluntary sector organisations. They will deliver the government’s ‘Work Programme’ via a network of personal advisers who have the duty to assist and support claimants, and the power to direct them to undertake specific work-related requirements. They do not have the power to impose sanctions, but will report sanctionable failures to DWP decision makers, who then decide whether or not to sanction. Work Programme suppliers are paid by results – ie, the number and longevity of employment and work placements, with higher payments for ‘hard-to-place’ claimants.

As now, there will be no right of appeal to a tribunal against work requirement directions. Disputes will have to be resolved with the claimant’s personal adviser, or by asking for a direction to be reviewed by a manager. There will be a right of appeal against a DWP decision to impose a sanction, including whether there was ‘good reason’ for not complying with a requirement.

Once universal credit is introduced in 2013, the above conditionality regime will be integrated into contribution-based JSA and contributory ESA.

Prior to the introduction of universal credit, probably from sometime in 2012, elements of the regime will be introduced into IS, JSA and ESA as follows.

The escalation of conditionality appears to be an unstoppable bandwagon. Despite its perceived popularity, however, there are serious concerns about its effectiveness and impact on vulnerable claimants. At times, the case for conditionality takes on the appearance of a moral crusade, rather than being evidence-based. In fact, the evidence from the UK and elsewhere on its effectiveness in getting claimants into sustainable employment is, at best, equivocal. The introduction of ‘in-work conditionality’ and the new sanctions regime will also introduce more complexity into the system.

There are also concerns that some vulnerable claimants, including those with mental health problems, could face repeated and lengthy sanctions and that personal advisers, working within a culture of ‘payment by results’, will have too much power and discretion to impose inappropriate requirements on claimants, which will be difficult to challenge.

CPAG believes that personalised support is the most effective way of helping and encouraging claimants to enter work, and that there should be more ‘carrot’ and less ‘stick’.

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