Conditionality Chris Hayes Labour Market Analysis and Strategy Division DWP

2 Department for Work & Pensions Our challenge There are 2.5 – 3 million new JSA claims and 700,000 ESA new claims each year. We are delivering a system to help support these claimants into work. We believe that it is right to expect claimants to do all they reasonably can in exchange for support: –Sanctions play a vital role in supporting this system. –To encourage claimants to comply with the requirements that are designed to help them move into or prepare for work.

3 Department for Work & Pensions Our approach to conditionality Our system is flexible and is adapted to meet the needs of the individual. We are clear about expectations and to support our approach have developed the Claimant Commitment: –A contract between the claimant and the government, agreed between the claimant and the work coach. –Tailored to the individual. –Sets reasonable requirements in accordance with the claimants circumstances, including adjustments for health conditions and caring responsibilities.

4 Department for Work & Pensions Conditionality regime is effective Since 2010 the unemployment has fallen by over half a million. Over 60% of new JSA claims end within three months. Around 80% of new JSA claims end within six months. Sanctions are vital to the success of the conditionality regime and… …there is clear evidence that sanctions are effective as a deterrent for the small minority of claimants who do not comply. Over 70% of claimants say they are more likely to follow the rules because of sanctions.

5 Department for Work & Pensions We have increased our support – increased sanctions expected… Offering more support – investing more resource so claimants are encouraged to do all that they reasonably can to find work or move into work – previously claimants were only asked to meet 3 requirements a week. Helping more claimants move closer to work though targeted employment programmes such as the work programme and other training schemes. …however proportion of claimants sanctioned remains low The vast majority of claimants do not get sanctioned – in an average month in 2013 only around 6% of JSA claims were sanctioned and around 1% of ESA claims. Of those who are sanctioned, the majority receive just one sanction during their claim.

6 Department for Work & Pensions There are clear safeguards in place. There is a clear process in place so claimants are clear on expectations and are able to challenge any decisions. –Reasonable requirements are set, tailored to the claimant. –Where a sanction referral is made claimants are always given the opportunity to provide good reason – a sanction will not be imposed where good reason is provided. –Cases are examined by an independent decision maker. –Where the claimant does not agree with the decision they are able to request a reconsideration and appeal against the decision.

7 Department for Work & Pensions Hardship Payments – additional safeguard Once sanctioned, claimants can also apply for hardship payments. Vulnerable claimants, including any claimant with responsibility for a child, should receive payments immediately. Hardship payments put back into payment 60% of normal JSA in addition to 100% of any premiums included in the JSA award such as a disability premium. Seriously ill or pregnant claimants can receive 80%. ESA claimants receive 60% of their benefit immediately and retain the Work Related Activity element.

8 Department for Work & Pensions We are making improvements We are monitoring the current system and have made improvements to ensure claimants fully understand what is expected of them and consequences of failing to meet reasonable requirements. Some of the improvements that have already been made include: Provider Direct Claimant Commitment New quality assurance framework for Decision Makers Claimant Communications Unit Accessible guide to sanctions available on GOV.uk Since July 2014 no benefit payments should be stopped before a decision is made - doubt of entitlement cases JSA conditionality easement for homeless claimants

9 Department for Work & Pensions Oakley Review Matthew Oakley’s review will make a significant contribution to our drive to continually improve the system. The scope of Matthew’s review was JSA sanctions for claimants on Mandatory Back to Work Schemes focusing on clarity of information and claimant understanding. We accept all of the recommendations and have published a Government Response in July 2014.

10 Department for Work & Pensions Oakley Review We have already implemented a number of the recommendations including: A review of all sanctions communications so that we have a better understanding of what works in driving customer behaviour. Tightening of our hardship payment process so that vulnerable claimants are not left without any funds when sanctioned. A commitment to delivering quality and timely decisions around sanctions. Guidance changes so that Housing Benefit is not inadvertently stopped when a sanctions decision is made. Improving claimants understanding of their responsibilities whilst on the Work Programme including strengthening wording on the Claimant Commitment and guidance.

11 Department for Work & Pensions Universal Credit We are further adapting the conditionality regime and sanctions within Universal Credit: –UC sanctions regime designed to drive better engagement and compliance. –It is in the gift of the claimant to limit the number of days they are sanctioned for a low level failure to meet a requirement.