As the government pushes for an even harsher benefit sanctions regime, GMLC campaign volunteer Tammy Ho writes on the DWP’s recent report into sanctions’ (in)effectiveness.
A report published by the Department for Work and Pensions (DWP), which the government attempted to suppress, shows that benefit sanctions impede the progress of claimants into employment and may result in them being compelled to accept lower-paying jobs, leaving them with £34 a month less on average when they start work than non-sanctioned claimants.
The DWP claims that benefit sanctions are intended to incentivise claimants’ attempts to find work and their attendance at Jobcentre Plus appointments. The numbers suggest otherwise. In fact, sanctions as a result of failure to comply with mandatory work preparation, work search and work availability requirements, “do not lead to large shifts in job-finding rates, and tend to shift people towards lower-paying work that changes their Universal Credit work group without ending their benefit claim”. In other words, low-paying employers gain workers but those workers remain reliant on top-up benefits because their pay is so low. The report adds: “[Claimants] are under greater financial pressure to find a job, and therefore may be more likely to accept a job which pays less.”
In some circumstances, claimants may not face a sanction if they can demonstrate a valid “good reason” for their failure to comply with the DWP’s requirements. However, a “good reason” is not legally defined. Parental commitments and traffic are often not considered good enough reasons to miss appointments, according to Advicenow, despite often being unavoidable. Other sanctions are clearly wrong-headed even when applying harsh policies. In one famous case, a benefits claimant was sanctioned by the Department for Work and Pensions for not looking for work while waiting to start a new job – at the Department for Work and Pensions.
It is important to note that sanctions escalate. If a claimant is sanctioned more than once within a set period, they can lose benefit again for a longer time. While claimants who had one sanction had their earnings reduced by £15 per month after exiting intensive work searches, a quarter of sanctioned claimants who experienced a second or third escalation have their average earnings reduced by £79 and £94 respectively.
The DWP argues that the negative financial impact on sanctions may be mitigated by the existing scheme of hardship payments, a loan selectively offered to claimants while they are sanctioned. Sanctioned claimants who succeed in applying for the hardship payment receive a loan equivalent to 60% of the amount deducted from their Universal Credit. After this, loan repayments are deducted from their benefits, so the benefit they receive each month after the sanction is lower until the hardship payment loan is repaid. Rather than being a “financial gain”, as presented in the report, having to repay the hardship payments once the sanction ends imposes further financial burden on claimants who have re-complied with DWP’s requirements.
Suppression of the report
The report, which was prepared several years ago, was blocked by the then Work and Pensions Secretary in 2019, Thérèse Coffey, on the grounds that it was “not in the public interest”, as reported by the Guardian.
The report was only released after the successful challenge launched by David Webster, an academic from Glasgow University, under the Freedom of Information Act 2000.
Two years ago, the Work and Pensions Committee of MPs had already found that benefit sanctions pose “significant harm to the health, finances, and well-being of claimants”.
One week after the DWP was ordered to publish the report, Jeremy Hunt, Chancellor of the Exchequer, announced the tightening of Universal Credit sanctions in the Spring Budget 2023. Hunt said that benefit sanctions will be applied “more rigorously” if people do not comply with work-search requirements or take up a “reasonable” job offer.
The statistics show that sanction rates have been soaring, far exceeding pre-Covid levels at their last measurement in November 2022.
After the announcement, it is little wonder why the government chose to bury the report. There is no good argument for ramping up sanctions during the cost-of-living crisis.