David Shaw, Department for Work and Pensions Conditionality and sanctions – an overview of new provisions in the Welfare Reform Bill

Overview Welfare Reform Bill – key changes Universal Credit: –Recap –Conditionality framework –Personalisation? –In-work conditionality? –Sanctions Changes prior to Universal Credit

Welfare Reform Bill: Key changes 3 sets of provisions on conditionality and sanctions 1.New provisions for Universal Credit to set work related requirements to impose sanctions 2.Matching provisions for contributory benefits 3.Introduction of key changes in advance of Universal Credit claimant commitment new sanctions system

Universal Credit: Recap Universal Credit replaces: Income related Jobseeker’s Allowance Income related Employment and Support Allowance Income Support (including SMI) Child Tax Credits Working Tax Credits Housing Benefit Social Fund (budgeting loan elements) But does not replace: Disability Living Allowance Contributory Benefits Child Benefit Carer’s Allowance Start date: October 2013

The Welfare Reform Bill sets out: –four types of work-related requirement –four conditionality groups No “partners” - each adult in a household will be placed into a group according to their individual capability and circumstances. Recorded in a claimant commitment Universal Credit: Conditionality framework No work-related requirements Work-focused interviews Work preparation All work-related requirements

Universal Credit: Personalisation? Greater scope for personalisation / flexibility –Conditionality does not depend on benefit –Primary legislation enables discretion –No “always on” conditions e.g. actively seeking & available for work –No disentitlement –No need for prescriptive regulations – what can / can’t be done But value in some prescription e.g. work search requirements for lone parents? Challenge: what becomes genuinely discretionary; where is certainty better

Universal Credit: in-work conditionality? Previously … conditional out of work benefits, unconditional in-work benefits UC removes division – when should conditionality stop? In current system at around £70 per week / £3500 per year Too low? Higher to support –Sustainability of employment? –Progression? And therefore help with –Child poverty? –Public expenditure? Live issue – considering carefully the right level and approach –extent to which in-work conditionality can be cost-effective –extent to which (and when) we can support the delivery of greater in work conditionality

Universal Credit: Sanctions SanctionApplicable to:1 st failure2 nd failure3 rd failure Higher Level e.g. leaving employment voluntarily Claimants subject to all work- related requirements 3 months6 months3 years Medium Level e.g. failure to undertake all reasonable action to obtain work Claimants subject to all work- related requirements 4 weeks3 months Lower Level e.g. failure to undertake particular, specified work preparation action, failure to participate in a work-focused interview Claimants subject to all work- related requirements Claimants subject to work preparation and work-focused interview requirements Open ended until re-engagement followed by 1 week2 week4 weeks Lowest Level Failure to participate in a work- focused interview Claimants subject to work- focused interview requirements only Open ended until re-engagement

Changes prior to Universal Credit Bill amends existing benefits (Income Support, JSA, ESA) Moving towards UC system, and to support current changes e.g. –lone parents –work related activity Introduction of claimant commitment –Condition of entitlement for IS, JSA and ESA –Builds on existing Jobseeker’s Agreement –Allows all requirements & consequences to be recorded in one place Introduction of new sanctions system –New system introduced to JSA –Medium level sanctions, disentitlement but followed by fixed period –Value of sanctions increased in ESA

Welfare Reform Bill: Key changes 3 sets of provisions on conditionality and sanctions 1.New provisions for Universal Credit to set work related requirements to impose sanctions 2.Matching provisions for contributory benefits 3.Introduction of key changes in advance of Universal Credit e.g. claimant commitment new sanctions system

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