Jobseeker’s Allowance (Sanctions) (Amendment) Regulations 2012

Lord McKenzie of Luton Excerpts

Monday 8th October 2012 Grand Committee

[Baroness Stowell of Beeston]

My Lords, this instrument was laid in draft before the House on 9 July this year. It is regarded as being compatible with the European Convention on Human Rights. This instrument provides for a more effective, more proportionate and clearer sanctions system, but it also preserves the important safeguards that are required to ensure a fair and balanced system.

I think that there is a general agreement that it is right to expect claimants who are able to look for or to prepare for work to do so. We provide people with financial support when they are out of work. In return for that financial support, we expect them to do everything they reasonably can to get back into work. We know that active job search and engagement with advisers increases the chances that people find work more quickly than they would otherwise.

Most people who find themselves out of work and in receipt of jobseeker’s allowance are doing everything they can to get back into work and are complying with the conditions associated with this benefit. But not everyone is, and for those people, a more effective sanctions regime is needed. A sanctions regime should be clear and proportionate, and should fully encourage claimants to meet the requirements that will support them back to work.

The current sanctions regime is not achieving those objectives as well as it might. Let me offer a little more detail on the limitations of the current regime and how these new regulations will address those. First, some of the existing sanctions are simply not tough enough, and there is little to deter claimants from repeatedly failing to apply for a job or look for work. For example, if someone fails to meet one of the most important requirements, such as refusing a suitable job offer without good reason, they may be sanctioned for as little as one week. These regulations introduce escalating sanctions periods so that in relation to these most serious failures, the sanction periods will be 13 weeks for the first failure, 26 weeks for a second failure within a year of the previous one, and 156 weeks, or three years, for a third or further failure within a year of a previous failure which resulted in a 26 or 156-week sanction. So sanctions will be tougher for those who repeatedly fail to meet their requirements and repeatedly fail to change their behaviour.

Three-year sanctions will apply only in the most extreme cases where claimants have serially and deliberately breached their most important requirements. For these claimants, previous sanctions of 13 weeks and 26 weeks have unfortunately not provided sufficient deterrent to change their behaviour. We anticipate that very few claimants will be subject to this length of sanction, but we believe that such a sanction is necessary to act as a deterrent and to ensure compliance with the requirements that are critical to helping claimants move back into work.

We cannot expect sanctions to act as a deterrent unless the sanctions themselves are clear. Currently they are not. A sanction for failing to apply for a job could be anything between one and 26 weeks. Under the new regime, claimants will be able to understand upfront exactly how their benefit will be affected. They will know that the first time they refuse a job offer without a good reason they will get a 13-week sanction.

There is also a lack of clarity in relation to sanctions for failure to comply with the requirement designed to improve a claimant’s chances of finding or preparing for work. Currently there is a complex range of sanctions for these types of failure, including one or two-week sanctions for failing to attend an interview at a jobcentre, two and four-week sanctions for other failures such as failing to carry out a direction from an adviser and 26-week sanctions for some claimants in the work programme. Under these regulations, the sanction for not meeting such requirements will be set at a clear and simple period of four weeks for a first failure and 13 weeks for a second or subsequent failure within a year of the previous failure.

Another feature of the current system is that in some circumstances there are only limited consequences for failing to be available for work or failing to actively seek work. Not meeting these basic conditions of entitlement generally leads to disentitlement from jobseeker’s allowance. But currently those who are disentitled for these reasons can reclaim straightaway and in some cases lose only one or two days’ benefit. It is not right that claimants can fail to meet the fundamental requirements of claiming benefit and yet face little consequence. Therefore, those who reapply for benefit following disentitlement for these reasons will be subject to the new sanction of up to four weeks for a first disentitlement and up to 13 weeks for a second or subsequent disentitlement within a year of the latest one.

We want to introduce into the sanction regime some recognition for claimants who do the right thing. Therefore, as a new incentive for claimants to return to sustained work, if they work for six months before they become re-entitled to jobseeker’s allowance, the balance of any outstanding sanction is lifted. Under this regime, some things will not change and important safeguards will remain in place. We will continue to tailor requirements to suit claimant circumstances, for example to allow for caring responsibilities and to take account of mental or physical health conditions. Claimants will have the opportunity to explain why they have not complied with a requirement. Just as now, if they provide a good reason a sanction will not be imposed.

Claimants will still be able to request further information about the sanction decision, request a reconsideration and appeal against the decision. If claimants have concerns about whether the correspondence address they have given us is secure, we will arrange for letters and notifications to go to an alternative address or to be picked up from the jobcentre.

These regulations will broadly align the jobseeker’s allowance sanctions regime with that for universal credit. As well as providing the clarity and proportionate consequences described earlier, this change will ease the transition to universal credit for both claimants and Jobcentre Plus staff.

In conclusion, these changes are intended to better drive the behaviour that maximises a claimant’s chances of finding suitable work. I commend them to the Committee.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for introducing these regulations. I welcome the noble Baroness, Lady Stowell of Beeston, to her first appearance at the Dispatch Box on DWP matters. We hope that there will be many more such appearances and that this is not just an operational response to the absence of the noble Lord, Lord Freud, who drew the short straw and had to go to the party conference.

We cannot support these regulations. That should be clear to the Minister from the debate in the other place. That is not to say that we oppose every aspect of them, nor do we oppose the principle of sanctions. Properly constructed and fairly applied, they have an important place in the benefits system. They encourage compliance with claimant obligations. We also support regulation for a clearer relationship between the length of a sanction and how that relates to the failure to comply with the particular obligations.

What concerns us in particular, however, is the three-year sanction, which we consider to be excessive and, indeed, counterproductive. As was spelt out in the other place, the concern over the three-year sanction is not only that it will inevitably create hardship but that it will create an extended period where there is a weak connection with the labour market. Will the Minister clarify what ongoing obligations an individual has during the period of the sanction and what entitlements the individual has during that period; for example, their access to the Work Programme? Would failure to meet any obligations during a period of sanctions itself be further sanctionable?

In considering these regulations and the JSA regulations, we need to be mindful of what is happening at the moment with all the reassessments, the flawed application of the WCA and the fact that many people were being pushed on to that benefit from ESA and IB. I would be grateful if the Minister would also clarify the circumstances where someone subject to a sanction gets a job and ceases to be eligible for JSA. What precisely is the position on their reclaiming? Paragraph 7.7 of the Explanatory Memorandum suggests that there is a disentitlement of four or 13 weeks where the original disentitlement was related to,

“not being available or actively seeking work”.

However, does this replace any unexpired portion of the original sanction or is it additional to it? What is the position of somebody who is subject to a 26-week sanction for refusing work but who gets a job for two weeks after, say, one month and then reverts to JSA? They would have been without JSA for six weeks. Do they have a further seven weeks of sanctions to go?

I have some more specific questions. Can we have an update relating to the numbers of sanctions and disentitlements? When we debated this during the Welfare Reform Bill it was noted that there was an alarming increase in 2010-11 in comparison with the previous year and a 42% increase between July and September 2010 in comparison with the comparable preceding period. Can we be given the numbers for the subsequent year, please? We have previously been assured that there is no question of the DWP having formal or informal targets for sanctions and that the previous overzealous misinterpretation of instructions has now been corrected. Will the Minister confirm that this is the case? Can we be told what management statistics will be collected on a routine basis and the use to which they will be put? While not being a target, what provision is made as regards the budgets for reductions in benefit arising from the application of sanctions for the current year, and what is the split between pre and post-October 2012 data?

Under the current arrangements, the days of a sanction period count towards any 182-day entitlement to contribution-based JSA. Will that change? Under the existing regime, we have the saving of just cause relating to leaving a job voluntarily and good cause for neglecting to avail oneself of a job opportunity. These terms have been developed in regulations and, it is understood, from time to time in commissioners’ decisions. The Explanatory Memorandum sets out that these concepts are to be subsumed into a new good reason concept, the interpretation of which is left to decision-makers. Does this mean that all existing precedents and guidance are to be disregarded? For example, a person is currently treated as having good cause if they do not accept a job that is vacant because of a trade dispute: that is, they are not required to be a strike breaker. Will this protection still operate under the new sanctions? Currently, if there is no automatic good cause, the decision-maker must nevertheless take certain circumstances into account. These include where a particular job or carrying out of a jobseeker’s direction would be likely to cause excessive physical or mental stress. What will happen to this requirement under the new regime and, similarly, the requirement for decision-makers to take religious and conscientious objections into account? Is there to be any guidance on this issue in the new world of sanctions? How will the consistency of approach to these matters be assured and, indeed, monitored within the department? The proposed penalty regime escalates—13 weeks; 26 weeks; three years—and the escalation is determined by the number of prior failures. At its point of introduction, what account is taken of any sanctionable failures prior to that date? Is the slate wiped clean at that point?

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[Baroness Stowell of Beeston]

That is the case. That is what I have explained. If you are sanctioned, you are not in receipt of jobseeker’s allowance. There may be other benefits that you are entitled to, such as housing benefit. I think it is the use of the word “entitled” that is confusing matters, and I must apologise if I am confusing the Committee.

If somebody receives a sanction which leads to them not receiving their jobseeker’s allowance, that does not mean that they are not entitled to jobseeker’s allowance; it just means that they are not in receipt of it because they have not done something that is required of them in order to be entitled to receive that allowance. To be disentitled means that you have to stop being—I forget what the precise language is—available and able to carry out work. I think I have used imprecise language, and I apologise.

The noble Lord, Lord McKenzie of Luton—

[Lord McKenzie of Luton]

I shall pick up the point the noble Baroness has made. I apologise for interrupting. If somebody has been sanctioned for three years and the local job market is such that the prospects of getting employment for six months look pretty grim yet nevertheless they are still, at least in theory, subject to JSA conditionality, what will encourage them to undertake those obligations? It seems to me that if you have a three-year period when this persists, people will drift from that support. There is nothing that encourages them to engage. If they do not engage, does that mean that they could be further sanctioned during that period?

[Baroness Stowell of Beeston]

I think this is a point that the noble Lord raised earlier, and I was coming to it. I repeat that I think the number of people who will be sanctioned for a three-year period will be very small. However, during any sanction period somebody who is in receipt of a sanction will still be required to go into the jobcentre and receive support from the staff to help them get back into work. That aspect of the support that is available to somebody out of work would not be removed.

The noble Lord, Lord McKenzie of Luton, asked what measures we are putting in place to monitor the new sanctions to see whether they have the intended effect. There is a process in place. The department will consider undertaking further analysis once the findings suggest further lines of inquiry. There is a process that will monitor the process.

I think it was the noble Lord, Lord Kirkwood, who asked about pilots, which may have been in the same ballpark. On that matter, these regulations make changes to the JSA regime for a temporary period. It is the universal credit regime that will be tested in pilot, not these interim changes.

The noble Lord, Lord McKenzie, asked whether a sanction would still apply if someone who is sanctioned finds work, so the claim ends, and then reclaims. I am sure that he will clarify this for me if I have misunderstood, but he perhaps meant to go back to my misuse of language around sanction and disentitlement or entitlement. A 13-week sanction would apply only to a new claim after a disentitlement for failure to meet the jobseeking conditions. If someone had a sanction and then found work so that their claim ends, on a reclaim the unexpired portion of the previous sanction would apply, as now.

There were quite a few questions from various noble Lords about the process of decision-making and definitions of “good reason”. The noble Lord, Lord German, asked about this and why examples of good reason have been removed from regulations. Under the revised regime, we want the decision-maker to take into consideration all the facts and evidence presented by the claimant. We think that the regulations were perhaps a little too prescriptive. We would much rather that the decision-maker were in a better place to make that change.

The noble Lord, Lord McKenzie, asked why we are replacing “good cause” with “good reason”. This is just a simplification of language; it makes no substantial change. As now, if claimants can show good reason for failing to meet requirements, they will not receive a sanction. The noble Lord asked how well the “good reason” provision will work in practice. Notwithstanding what I said about regulations, examples of possible factors that might count as “good reason” include a sincere religious or conscientious objection, caring responsibilities, emergency duties, and so on, but this is not an exhaustive list.

The noble Lord, Lord McKenzie, certainly asked some specific questions about protections and whether trade disputes or a religion would still exist in referring decisions about whether somebody should apply for a job vacancy. Advisers can continue to agree restrictions on the type of job that a person is willing to take. These relate to the type of employment for which that person is available, the terms of employment and the locality. That would include those with religious or conscientious convictions, who may not wish to undertake certain types of work. For example, they may not be willing to work with animal products or for a company associated with live animal exports. No claimant will be expected to take a job that was vacant as a result of a trade dispute.

[Lord McKenzie of Luton]

I thank the Minister for a lot of the detail that she is providing to us this afternoon. Can she just clarify the position? At the moment we have “just cause” and “good cause”, which have been reflected in some particular regulations and certainly in some guidance. I think that there are some commissioners’ decisions which flesh out the meaning of those terms. Are all of those precedents going to be swept away and not applied, or are they going to stay in being and be used to support the concept of “good reason”?

[Baroness Stowell of Beeston]

Yes, they still apply.

The noble Lord, Lord McKenzie, also asked about people with health conditions. These regulations do not change the requirements that are on claimants as of now. Through Jobcentre Plus and the work programme, we will provide claimants with health conditions with the personalised support that they need to overcome their barriers to employment. All requirements will take their health into account to ensure that they are not asked to do something which would be unreasonable.

The noble Baroness, Lady Turner of Camden, asked in her remarks about those disabled people who may be moving from DLA to JSA or a version of that under universal credit. Today, we are obviously concentrating on JSA, which is very different to DLA. However, I take on board the point that she makes about ensuring that people have a clear understanding of what is changing and how they are affected by those changes. That is certainly something which needs to be addressed.