Why Universal Credit could lead to even more sanctions

Benefit sanction rates are already at record levels


Universal Credit (UC), Iain Duncan Smith’s flagship welfare reform, has been beset by problems since its conception, including catastrophic IT failures, poor administration and claims that it will dissuade claimants from work.

Now a report by the New Policy Institute (NPI) has warned that implementing UC could lead to even more people receiving benefit sanctions.

According to the NPI, there were 686,000 benefit sanctions in the UK in 2014. Broken down, this is 606,000 sanctions for Jobseeker’s Allowance (JSA), 43,000 for Income Support (IS) and 37,000 for Employment and Support Allowance (ESA). For JSA, a sanction means benefit is removed entirely. For IS and ESA claimants the proportional reduction is lower and only affects one aspect of the benefit.

The JSA sanction rate – the number of sanctions per number of claimants in a month – was 5.1 per cent in 2014, the second highest on record. NPI add that a fall between 2013 and 2014 was due to a reduction in the number of claimants, not because the system has become less harsh. ESA sanctions rose to their highest ever level in 2014.

On average in 2014, 10 per cent of JSA claimants were referred for sanctioning each month, with about half of these actually having their benefit stopped. This means that one in 20 JSA claimants had their benefits sanctioned each month, with an average duration of eight weeks and an average income loss of £530. Over a quarter of these were received by disabled people or single parents.

The NPI express concern that the next few years might see yet more increases in the number of sanctions handed out, due to the introduction of the ‘claimant cmmitment’ for working families under UC.

This means that anyone earning below a certain level (normally 35 hours at NMW) will be subject to conditionality and therefore will be at risk of sanctions. This is supposed to encourage them to find more or better paid work.

The NPI point out that this is questionable in an economy which still has high levels of underemployment. People receiving other benefits with no requirement to look for work, such as housing benefit, will also be subject to conditionality.

According to the Department for Work and Pensions’ 2012 Impact Assessment, an additional one million claimants will be subject to conditionality under DWP. The NPI note that if the current 5.1 per cent sanction rate is replicated, there will be an additional 612,000 sanctions in a year.

The report concludes:

“The sanctions system has not been administered well – for example, the automatic referrals from Work Programme providers, or the high proportion of sanctions that are overturned on appeal, or the abiding reports of ‘expectations’ of reaching certain numbers for sanctions.

“Expanding massively the scope of conditionality and sanctions to new areas is an alarming prospect in light of this.”

Ruby Stockham is a staff writer at Left Foot Forward. Follow her on Twitter

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