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Appeals, Human rights/equalities, Initial decision-making, Reports & Publications, Social security and welfare benefits, System design

Making the totally unacceptable slightly more palatable

In this post, Michael Adler examines a recent report on benefit sanctions from the House of Commons Work and Pensions Committee and considers that its proposals for change are to be welcomed but are disappointing in that they make a system that is unacceptable only slightly more palatable.[1]

By Michael Adler

In its latest report on benefit sanctions, which was published on 31 October 2018,[2] the House of Commons Work and Pensions Committee called for a review of the benefit sanctions regime. This is not the first time it has issued such a call. It did so in its previous report on benefit sanctions,[3] in March 2015, when it repeated the call for a comprehensive, independent review of benefit sanctions that it had made in an earlier report on the role of Jobcentre Plus,[4] in January 2014. No review was carried out by the Government on either of the previous occasions and it remains to be seen whether there will be any response to its call this time. Who knows, perhaps it will be third time lucky.

At the beginning of its latest report, the cross-party Committee, which is chaired by Frank Field MP and comprises five Conservative Members, four Labour Members and one SNP Member, makes it clear that it does not believe in unconditional benefits for those who are capable of moving into work, but that the unfair and disproportionate application of the current sanctions regime is unacceptable. This normative position is reflected in the Committee’s approach to benefit sanctions and in the recommendations it makes.

In this blog post, we first consider five substantive proposals:

  1. The fact that policies appear to have been made without any robust evidence demonstrating that longer and harsher benefit sanctions are effective and do not cause undue harm;
  2. the widespread first-hand evidence of hardship caused by benefit sanctions;
  3. the enhancement of the sanctions regime under Universal Credit (UC) compared with the sanctions regimes under what the Report refers to as the ‘legacy benefits’, i.e. Jobseekers Allowance (JSA), Employment and Support Allowance (ESA) and Income Support (IS) that preceded UC;
  4. applying sanctions to in-work claimants;
  5. limiting the repayment of hardship payments.

Having done so, we consider three of procedural recommendations, all of which raise questions of administrative justice:

  1. Structuring discretion in the decision-making process;
  2. the introduction of warnings for first-time failures to comply;
  3. better procedures for challenging decisions.

Substantive issues

The lack of research on effectiveness and impact

Although the Welfare Reform Act 2012 made benefit sanctions longer, more severe and applicable to more people than ever before, the Report points out that the Government of the day had not done any research on the likely impact of these changes when it introduced the legislation and, six years later, the present Government still has no robust evidence about their effectiveness or impact. The Report argues that the failure to evaluate the stricter sanctions regime that was introduced in 2012, and the changes that have been introduced since then, are quite unacceptable and that the Government needs urgently to evaluate both the effectiveness of sanctions in getting claimants back into work, which is their stated aim, and their impact on claimants’ financial and personal well-being. Furthermore, until there is what the Report refers to as ‘robust evidence’ that longer benefit sanctions are effective and do not cause undue harm, it recommends that the duration of ‘higher level’ sanctions should be reduced from three months, six months and three years for first, second and subsequent breaches of the regulations to two months, four months and six months. Many people will undoubtedly argue that this small but welcome step does not go far enough.

First-hand evidence of hardship, particularly for vulnerable groups

The Report points to evidence that some groups of people, for example single parents, care leavers and people with an impairment or health condition experience undue hardship and argues that, until the Government develops a better understanding of how sanctions affect the employment outcomes of vulnerable claimants, they should not be subject to sanctions. In addition, the Report recommends that anyone who is the responsible carer for a child under the age of 5, or a child with demonstrable additional needs and care costs, or anyone leaving care who is under the age of 25, should only have 20 per cent of their benefit withheld if they are sanctioned. It notes that care leavers need better support and recommends that the Government should review the working relationships between local authority personal advisers and DWP work coaches to ensure they collaborate as effectively as possible in supporting care leavers.

The report also argues against the imposition of sanctions on claimants with a disability and claimants who suffer from ill-health, arguing that this is harmful and counterproductive. It recommends that the Government should not impose sanctions on anyone who is found to have limited capability for work, or anyone who presents a valid doctor’s note stating that they are unable to work, including those who present such a note while waiting for a Work Capability Assessment.

Enhanced sanctions under Universal Credit

Under Universal Credit (UC), a sanction incurred when the claimant was previously in receipt of another benefit, referred to as a ‘legacy benefit’, continues even if the claimant’s circumstances change and they are no longer required to look for work. According to the Report, this practice constitutes unfair punishment and it recommends that sanctions should be cancelled when a claimant’s change in circumstance means that they are no longer subject to the requirement that led to their sanction in the first place.

Under UC, the maximum amount someone can be sanctioned is 100 per cent of the claimant’s standard allowance. However, if someone is receiving less than their full standard allowance because of deductions, e.g. for rent arrears, consumer debts or court fines, a sanction representing 100 per cent of the standard allowance will eat into other elements of the claimant’s benefit income, putting housing and children’s welfare at risk. The Report recommends, as a matter of urgency, that the DWP must ensure that any deductions from standard allowances are postponed for the duration of any sanction imposed to ensure that money for children and housing costs is always protected.

Applying sanctions to in-work claimants

Rather controversially, the Work and Pensions Committee Report supports the extension of conditionality to those in work as a way of getting them to increase their hours and earnings, a measure that is being introduced for those in receipt of Universal Credit who were formerly in receipt of Working Tax Credit. However, the Report warns that the advantages risk being undermined by the hasty roll-out of a measure that is, once again, not grounded in robust research evidence. The Report notes that a randomised controlled trial showed that sanctions had no effect on in-work claimants’ working hours or earnings and that work coaches were not yet equipped to get sanction decisions right every time. It recommends that the DWP should not impose sanctions on in-work claimants until the full roll-out of Universal Credit is complete and then only on the basis of robust evidence that it will be effective. In the meantime, it recommends that the DWP should focus on providing in-work claimants with appropriate support.

Limiting the repayment of hardship payments

Hardship payments are made to those who would otherwise be left with no income when they are sanctioned. However, the fact that, in the case of Universal Credit, hardship payments are recoverable at a rate of 40 per cent of the claimant’s standard allowance imposes additional significant hardship. The Report points out that this is neither necessary for the Government, which does not appear to be financially motivated as far as recovering the money is concerned, nor affordable for those who have been recognised as being at risk of extreme poverty. The Report’s final recommendation is therefore that the DWP should issue revised guidance to all work coaches to ensure that hardship repayments are set at a rate that is affordable for the claimant, with the default being 5 per cent of their standard allowance.

Procedural issues

Structuring discretion in the decision-making process

If a work coach thinks that a claimant has failed to comply with a requirement in their Claimant Commitment, they raise what is known as ‘a doubt’ that sets in motion the process which can lead to a sanction. The Report recognises that providing work coaches and decision-makers with an appropriate degree of flexibility is a challenge, but the Committee heard too many stories of poor decision-making to be able to conclude that the current system always gets it right. The first hurdle is deciding what counts as a ‘good reason’ for failing to comply, which is currently left to work coaches to decide. This discretionary power inevitably means that claimants in similar circumstances are treated inconsistently. The Report therefore recommends that the DWP should introduce some carefully drafted regulations specifying what counts as a ‘good reason’ for a claimant failing to comply with a requirement in their Claimant Commitment that would still allow work coaches to exercise judgment in situations not included in the regulations.

The Report claims that claimants do not know about the existence of exemptions (known as ‘easements’) from the obligations set out in their Claimant Commitment. Work coaches have the power to identify easements on the grounds that it would be unrealistic for the claimant to comply with the obligation in question. Since they neither have the time nor the expertise to ask questions about every aspect of someone’s life, the Report recommends that the DWP should develop a standard set of questions, covering all possible easements, and that work coaches should routinely ask these questions when claimants draw up and agree to their Claimant Commitment. It also recommends that the DWP should review and improve the information about easements that is made available to claimants.

The Report recognises the importance of sanctions being imposed by independent decision-makers but argues that it is ‘a missed opportunity’ that work coaches do not play any role in the decision, since they have a relationship with the claimant and their knowledge of the claimant’s circumstances is relevant to the decision. The Report recommends that, when work coaches refer a claimant to a decision-maker for a sanction, they should be required to include a recommendation, based on their knowledge of the claimant and the claimant’s circumstances, on whether or not a sanction should be imposed, and to give their reasons.

The introduction of warnings for first-time failures to comply

As of now, if a work coach concludes someone does not have good reason for failing to comply, they must refer them for a sanction. However, the Report argues that it is neither fair nor proportionate, either in the world of work or in the benefits system, for someone’s first mistake to be given such a harsh penalty. The Report welcomes the Government’s announcement that, in a limited set of circumstances, it intends to trial a system of warnings, instead of sanctions, for the first sanctionable offence, and recommends that the Government uses the trial as an opportunity to learn lessons, while taking steps towards introducing warnings, instead of sanctions, for every claimant’s first failure to comply.

Better procedures for challenging decisions

The Report criticises the fact that a sanction can only be challenged once the decision to impose it has been made, and the fact that the burden of proof then falls on the claimant to challenge it. To deal with this situation, the Report recommends that, instead of actually making a decision to impose a sanction, decision-makers should contact the claimant to let them know their ‘provisional decision’ and, if it is to impose a sanction, the evidence on which this is based. The claimant would then have a fixed period (the Report suggests 30 days) to challenge the provisional decision first, through Mandatory Reconsideration, and then at a First-tier Tribunal.

The present position is that claimants who wish to challenge a decision to impose a sanction can suffer hardship for weeks on end until their case is reviewed. This is particularly galling if the decision to impose a sanction is eventually overturned. To deal with this situation, the Report recommends that there should be a timetable for challenging decisions through Mandatory Reconsideration and appeals to a tribunal.

Summary and conclusions

As far as substantive changes are concerned, the Report recommends that:

  • The duration of ‘higher level’ sanctions should be reduced from three months, six months and three years for first, second and subsequent breaches of the regulations to two months, four months and six months. Many people would argue that this small but welcome step does not go far enough.
  • The scope of sanctions should be limited and vulnerable claimants, in particular those who are found to have limited capability for work and those who present a valid doctor’s note stating that they are unable to work, should be exempted.
  • For some people, the severity of sanctions should also be limited. Thus, anyone who is the responsible carer for a child under the age of 5, or a child with demonstrable additional needs and care costs, and anyone leaving care who is under the age of 25, should only have 20 per cent of their benefit withheld if they are sanctioned. In addition, for those whose benefit is subject to deductions, e.g. for rent arrears, these deductions should be postponed for the duration of any sanction that is imposed to ensure that money for children and housing costs is always protected.
  • Hardship repayments should be set at a rate that the claimant can afford, with the default being 5 per cent of their standard allowance.
  • The extension of sanctions to those in work should not be introduced until the full roll-out of Universal Credit is complete and then only on the basis of robust evidence that it will be effective. In the meantime, the focus should on providing in-work claimants with appropriate support, i.e. on the use of carrots rather than sticks.

To summarise, the Report recommends a softening of the sanctions regime in an attempt to make it less punitive; argues that repayments of Hardship Payments should be limited to a level that claimants can afford; and urges caution in relation to the introduction sanctions for those who are in work. Although the Report repeatedly points to the need for more evidence regarding the effectiveness and impact of sanctions, it never questions the need for sanctions or argues the case for subjecting sanctions to the rule of law. Rather than offering a root and branch critique of the sections regime, its piecemeal approach involves little more than tinkering at the margins.

Turning to procedural changes, the Report recommends that:

  • In order to achieve greater consistency in referrals from work coaches to decision makers, the Government should develop a standard set of questions, covering all possible exemptions from the requirements in the person’s Claimant Commitment, and work coaches should routinely ask these questions when they are considering a referral.
  • The Government should set out in regulations what counts as a good reason for a claimant failing to comply with an obligation in their Clamant Commitment that would still allow work coaches to exercise judgment in situations not included in the regulations.
  • The Government should also develop a standard set of questions, covering all possible exemptions from the requirements in the person’s Claimant Commitment, and work coaches would routinely ask these questions when considering whether to refer a claimant to a decision-maker.
  • Referrals from a work coach should include a recommendation, based on their knowledge of the claimant and the claimant’s circumstances, on whether or not a sanction should be imposed, and to give their reasons.
  • The Government should introduce warnings, instead of sanctions, for every claimant’s first failure to comply.
  • Instead of making a decision to impose a sanction, decision-makers should contact the claimant to let them know their ‘provisional decision’ and, if it is to impose a sanction, the evidence on which this is based. The claimant would then have a fixed period to challenge the provisional decision first, through Mandatory Reconsideration, and then at a First-tier Tribunal, before it takes effect.

In conclusion, the Report makes a number of recommendations that seek to improve the decision-making process. To the extent that such procedural changes reduce the number of people who are inappropriately sanctioned, they should be welcomed. These measures include structuring the discretion of work coaches; ensuring that work coaches have an input into decision-making; issuing warnings instead of imposing sanctions for the first failure to comply; and making a provisional decision that claimants can challenge before a sanction is imposed. If they were implemented, these recommendations would improve administrative justice in the decision-making process. Just how much difference they would make is an open question. More consistent decision-making, more informed decisions, warnings rather than sanctions for a first ‘offence’ and provisional decisions that are open to challenge are all commendable reforms. However, improving the administration of a bad system is arguably less important than replacing it with a better one, and one major disappointment of the Report is that it does not give any consideration to the possibility of introducing any alternatives to benefit sanctions. As far as the Work and Pensions Committee is concerned, they are here to stay.

 

About the author:

Michael Adler is Emeritus Professor of Socio-Legal Studies in the School of Social and Political Science at the University of Edinburgh. Together with Frans Pennings (University of Utrecht), he edits the European Journal of Social Security, He has written extensively on benefit sanction and is the author of Cruel, Inhuman or Degrading Treatment? Benefit Sanctions in the UK, published in the Palgrave Socio-Legal Studies series by Palgrave Macmillan in August 2018.

 

[1]        This characterisation of benefit sanctions in the title of this blog post is based on Adler, M. (2018) Cruel, Inhuman-or-Degrading-treatment: Benefit-Sanctions-in-the-UK, London: Palgrave Macmillan. See, also, Brian Thompson’s book review on the UKAJI website, available at https://ukaji.org/2018/10/05/book-review-cruel-inhuman-or-degrading-treatment-benefit-sanctions-in-the-uk/

[2]        House of Commons Work and Pensions Committee (2018) Benefit Sanctions, HC-955, 19th Report of Session 2017–19, 31 October, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmworpen/814/814.pdf

[3]        House of Commons Work and Pensions Committee (2015) Benefit Sanctions Policy beyond the Oakley Review, HC-214, 5th Report of Session 2014–15, 24 March, available at https://publications.parliament.uk/pa/cm201415/cmselect/cmworpen/814/814.pdf

[4]        House of Commons Work and Pensions Committee (2014) The Role of Jobcentre Plus in the reformed welfare system, HC-479, 2nd Report of Session 2013–14, 28 January, available at https://publications.parliament.uk/pa/cm201314/cmselect/cmworpen/479/479.pdf

 

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