Nearly 1.2 million working adults will for the first time next year face losing some of their benefits if they do not comply with new state requirements to work longer hours, find an additional job or seek higher wages, it has emerged.
Until now benefit sanctions have only applied largely to those out of work. The new sanctions regime is an unprecedented byproduct of the government decision to introduce universal credit, merging most existing means-tested benefits and tax credits together into a single system. The aim is to increase the incentives to work but it means that people will lose money if they don’t find extra work, even if there is none available where they live./p>
There are currently 1.4 million people working part-time because they are unable to find full-time work – compared to 500,000 in 2004. The claim that 1.2 million working adults will be brought under the oversight of the department of work and pensions sanctions regime is made by the Resolution Foundation thinktank, and is based on figures supplied by the DWP for the first time. The foundation suggests about 700,000 single people will be affected, as well as 500,000 who are living as part of a couple. The conditions will be set on payments to many working claimants who earn less than the weekly equivalent of the minimum wage – £212.80p for a single person.
The Resolution Foundation claimed on Wednesday night that the work and pensions secretary Ian Duncan Smith was moving into unchartered territory and questioned whether DWP jobcentre advisers have the capacity to cope with double the number of claimants subjected to potential sanctions. Universal credit removes the requirement to work at least 16 hours to be entitled to benefit, so allows claimants to receive state help if they are working as little as five hours a week.
To counter the clear financial incentives for low-hours work in the new system universal credit introduces, for the first time, a bolstered system of personalised conditionality, including directed mandatory activity to help people obtain and prepare for work. Claimants will be expected to meet a new, higher conditionality earnings threshold, equivalent to 35 hour week at national minimum rates through a combination of measures. These can include: increasing their hours or their hourly wage with their current employer, finding one or more additional jobs alongside their existing employment or finding a new job with a higher income.
The foundation warns that “with little over a year until implementation it is of concern that little has been said about how a fair, consistent and adequately resourced conditionality system for working claimants will be implemented. It also questions “whether an extension of conditionality to working claimants can function in the current context of a chronically weak labour market in which millions of people want to work more hours, but are unable to do so”.
5th October 2012