New welfare sanctions unveiled

People claiming Jobseeker’s Allowance (JSA) face financial penalties at the moment if they are believed to have acted unreasonably in failing to apply for or take a job.

These penalties, introduced by the Labour Government, involve the loss of JSA for up to six months. Currently, the average penalty is 18 weeks’ loss of benefit.

Those losing their JSA can apply to a hardship fund, which pays considerably less than weekly JSA of £64.50 a week. Where claimants can prove they will suffer hardship, they receive £51.60 at first sanction and £38.70 subsequently.

£100 a month

This means those who fall foul of their job centre could lose more than £100 a month. The rules apply to single people and those with children, although not single parents with young children. The sanctions only affect JSA, not other benefits paid to parents.

The impression has taken hold that these penalties are not enforced. In fact, of five million JSA claims in 2009-10, there were sanctions in about 3 per cent of cases.

In about 150,000 cases, people had their JSA withdrawn: 97,000 for failing to attend training courses and skills programmes, and 59,000 for not applying for or taking jobs.

These sanctions will continue under Iain Duncan Smith‘s new regime. But there are two important changes. Whereas at the moment, penalties last a maximum of six months, in future they will last for up to three years.

The White Paper says: "Couples with children whose youngest child has reached the age of five, and where neither partner is disabled or has a health condition which prevents them working or is a carer, will need to make a joint claim to Jobseeker's Allowance, requiring both partners to actively seek work.

"Having strong and clear sanctions are critical to incentivise benefit recipients to meet their responsibilities. Currently, we believe that some sanctions are set at too low a level and the consequences of failing to comply with requirements are not always clear."

"We anticipate that most people who are sanctioned will receive a lower level sanction and indeed the majority of people are only ever sanctioned once. For those who repeatedly fail to meet their responsibility to look for work there will be progression through the sanctions regime to the tougher penalties.

"The penalty of losing three years of Jobseeker's Allowance will apply to the most extreme cases, where benefit recipients have serially and deliberately breached conditions, and where other sanctions have not worked to change their behaviour."

The Department of Work and Pensions (DWP) is also considering changing the rules so that money from the hardship fund has to be paid back, but people with children would be excluded.

The DWP emphasises that jobless parents can only lose one element of their benefits – the JSA – which can then be supplemented by hardship fund money. But this could still amount to losses of more than £100 a month – for up to three years in extreme cases.

A Channel 4 News poll shows that two thirds of the public believe people should lose their JSA if they turn down a job offer or interview. But charities are worried about the impact.

A spokesman for Community Links, which runs the New Deal programme for the unemployed in east London, said: “Using the threat of destitution as a tool of public policy is not right.

“We see a lot of cases of people who have got into debt because their benefits have been stopped, often by mistake. That’s the start of a really vicious cycle.”

He added that people whose benefit had been taken away tended to borrow money from friends or family if they could, but also resorted to doorstep loan sharks and pawn shops.