Welfare Reform

Welfare for all? The Welfare ‘Abolition’ Bill

See also our member’s article on Power, Lies and Welfare Reform.

The government’s Welfare Reform bill has been passed by the House of Commons and is now being debated in the House of Lords.  The bill contains a wide range of new regulations, and is being rushed through parliament despite widespread opposition. For such a wide ranging bill to be passing through parliament without extensive draft regulations and at such speed means that it has been impossible for most interested parties to undertake effective scrutiny of the major changes. The bill contains a number of get out clauses for the government, signs that the bill that has not yet been thought through.  For example, Clause 7 (which provides of the abolition of income support) empowers the Secretary of State to repeal any act or regulation where he considers it necessary or expedient to do so. The government have also failed so far to clarify their position where the bill appears to contradict their other statements, for example around carers continued entitlement to income support whilst the issues around whole system of benefits for carers is resolved.

The key areas of the bill will:

  • Privatise more of the work of the Jobcentre Plus to companies who will be paid on a payment by results scheme.
  • Impose more conditionality on claimants, including docking payment for missed interviews and compelling people to undertake activities to prepare them for work.
  • Introduce compulsory work for benefits in a US style workfare scheme called work for your benefit.

The ending of income support signals the end of the principle that those in need deserve help. ‘Work for your benefit’ forces people to labour in roles for a quarter of minimum wage, and reduces the opportunities for people to find properly paid employment. Much of the Bill is about increasing conditionality on claimants, lone parents, and sick and disabled people, yet there is nothing about benefit adequacy. Jobseekers Allowance is paid at less than £10 a day, if it had increased in line with earnings over the past 30 years the rate for a single person over the age of 25 would be more than £100 a week.

The bill also proposes the privatisation of large parts of the Jobcentre Plus Service, to companies who will be paid for each person who gets into paid employment. While the Government has sought to justify increased conditionality for many claimants on the grounds of increased provision of high-quality, personally tailored employment and skills related support, there is no provision in the welfare reform bill that people have an entitlement or guarantee to this. Instead the payment by results culture is likely to lead to the provision of generalist support from companies who are focused on meeting their targets rather than on the individual, with the use of sanctions to ensure that people must comply with whatever support they are offered. This culture from the Jobcentre Plus and private companies will disadvantage disabled people and others who have more complex support needs who will take longer to make a transition into work and who may be more expensive to support.

The bill does not consider supporting people to access training and jobs with fair pay and decent conditions, or set out to secure adequate incomes for people loosing their jobs or unable to find work. There are no measures to challenge discriminatory attitudes held by employers in order to support more disabled people and people with mental health issues into work; or proposals to help parents by encouraging flexible working practices and expanding the provision of affordable childcare. The focus on conditionality and sanctions in the Bill at a time of rising unemployment will cause anxiety and fear amongst those affected – lone parents, carers, disabled people and those facing the prospect of unemployment. These people face tougher tests to qualify for benefits, and if they fail they could be cut off with no support.

What is contained in the bill?

Abolition of Income Support

The Bill allows for the abolition of income support, and provides that any groups that remain on Income Support can be required to attend work focused interviews, and undertake work related activity or be subject to a sanction.

Increased conditionality

People claiming benefits will be compelled to follow the directions from an employment advisor or face sanctions on their benefits.

Work for your Benefit

‘Work for your benefit’ is workfare. It is enforced labour at a rate of as little as £1.73 per hour (combining current JSA rates with a 35 hour week). The Bill proposes piloting of workfare and would allow for a national rollout without further primary legislation. But DWP research already suggests that:

  • there is little evidence that workfare increases the likelihood of finding work;
  • it is least effective in getting people into jobs in weak labour markets where unemployment is high;
  • it is least effective for individuals with multiple barriers to work;
  • it can reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers.

Work related activity

The bill will allow the Jobcentre Plus, and private contractors, to issue mandatory directions to lone parents and sick and disabled claimants that they must undertake a specific activity, or face a sanction on their benefits.

Increased conditionality for couples

The Bill makes two changes for couples claiming benefit. Firstly, it removes the right of a sick or disabled person to claim Employment and Support Allowance (ESA) for the couple where their partner could instead claim JSA. Secondly, the Bill requires partners of claimants of IS, ESA and JSA to undertake work related activity or be subject to a sanction, meaning that partners cannot choose not to work.

Changes in contribution conditions for JSA and ESA

The Bill proposes a significant restriction on eligibility for contributory JSA and ESA. Those in work will find that they have to work for longer to pay the contributions required to qualify for benefit. This will reduce the number of claimants who qualify for contributory ESA and JSA, and will force many more claimants on to means tested benefits, which are complex and suffer from low take-up. Others will have no entitlement at all to means tested benefits.

Carers Allowance and Maternity Allowance

The Bill abolishes the dependent additions paid with carers allowance and maternity allowance. Both benefits are non-means tested and are paid to some of the poorest people in the country. Its removal will lead to an increase in reliance on means tested benefits, or for those who fail the means test, having to live on a lower level of income.

Benefit penalties for ‘offenders’

The Bill proposes that claimants who have been convicted, cautioned or fined of any offence of fraud will have their benefit suspended for four weeks. The proposal will catch people who are overpaid benefit due to a DWP mistake or error or misunderstanding on their part, but who but lack the skills and confidence to seek advice and challenge poor decisions made by the DWP. Benefit fraud is now a smaller problem than error, and is also smaller than that of non-take up, yet the Bill has nothing to say about how those missing out on their entitlements can be helped to claim. In addition, continuing to issue high profile ‘tough’ messages stigmatises the claimant population by instilling a wrongful stereotype that claimant fraud is common.

Training and skills of employment advisors

The Bill gives employment advisors greater responsibility in supporting people to look for work and in imposing sanctions on people who do not follow their directions. Advisors are currently insufficiently trained on working with people who need more support to look for work, including people with mental health issues and people with disabilities, yet the Bill does not propose to increase the training for employment advisors. The payments by results culture in this bill means that it is more likely that the employment support offered to people will be generalist, meaning people who have support needs, who it will be more expensive to support into work, will not receive appropriate help and will risk having their benefits cut under the new sanctions. There is nothing contained in the bill about how claimants will be protected from the unfair application of sanctions.

Mandatory drug testing

The Welfare Reform Bill introduces the power for mandatory drug testing for benefits claimants. The penalty for not complying with the test, or with a resulting rehabilitation plan is loss of benefit for 26 weeks.

Compulsion to access medical treatment

The Bill will allow employment advisors to decide the appropriate activity a claimant should undertake to be ready for work, including activities to manage their health. This power could be used to require a claimant to access healthcare provision, take medication or access psychological therapies. This will blur the boundaries between health provision and social control, and may mean that people are compelled to access physical or mental health treatment in order to obtain their benefits.

Data sharing

The bill proposes that information about benefit claimants will be more widely shared between government agencies, including sharing information from the police, prison service and health services with employment agencies.

Right to control for disabled people

The proposal is for a pilot to see whether people should be given control over their social care support, it does not give a commitment that this will happen for everyone. The government does not yet have a clear idea about what types of funding and support people would be given control over, how they would implement individual budgets or how they would give increased control to people who do not want individual budgets.

Social fund and Community Care Grants

Plans for the future of the social fund are not clear. The proposal is for the Social Fund to be partially administered by private loan providers who would charge interest on the loans, yet there is no rationale about how this will improve the operation of the fund. The bill will also enable successful Community Care Grant applicants to be provided with the item they have applied for rather than money.

Birth Registration

The Welfare Reform Bill introduces compulsory joint birth registration for unmarried parents, and sanctions can be applied if a mother fails to disclose the father of her child.
Child Maintenance

The bill also proposes new collection and compliance arrangements for child maintenance, including the withdrawal of driving licences and passports of non-resident parents who do not pay child maintenance.

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4 responses to “Welfare Reform

  1. The bill also wants to include asylum seekers in the workfare scheme although they are not allowed to work at present and are kept alive with vouchers worth less than JSA.

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    Feel free to register on the site to leave comments specifying whether you think your local provider has breached such contract in whole or part.

  3. Pingback: Welfare Reform « Norfolk Community Action Group

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