Guardian article by Patrick Butler, 14 April 2016: DWP ‘punishing’ low-paid full-time workers under new benefits rule
Critics say scheme under which working people claiming universal credit can be fined for failing to do enough to find more work is ‘political dynamite’
Fines imposed on full-time workers who claim universal credit amount to “punishing the working poor”, experts have suggested, as it emerged that one woman was docked £220 for missing a jobcentre appointment because she took a family holiday.
The fines, part of a little-known “in-work conditionality” programme introduced by the then work and pensions secretary Iain Duncan Smith, have been called “political dynamite” by academics, who warn that it may undermine unemployed people taking low-paid jobs.
The Guardian has learned of a case where a single parent was fined after she took a holiday in Spain booked before she was moved on to universal credit in 2015. Although she says she explained to officials why she could not make the meeting, the fine was still imposed.
Helen Smith, 36, of Widnes, who says she regularly works 30-40 hours a week as a bar worker on a zero-hours contract, said that when she appealed against the fine she was told by the Department for Work and Pensions (DWP) that being on holiday was not a valid reason not to look for work.
Smith, who says she has been in almost continuous employment since she left school, said: “Because I was working I just didn’t understand why I was sanctioned.”
Ministers have been widely criticised for imposing strict sanctions on people claiming unemployment benefit, dishing out millions of often arbitrary financial penalties in recent years for apparent breaches of jobcentre rules, despite there being no clear evidence that the fines helped those affected to get a job.
Now similar penalties are being extended to thousands of workers in receipt of universal credit (UC). They are expected to prove, as a condition of receiving low wage top-ups, that they are actively seeking to work more hours or take on extra jobs to earn more cash.
Experts have warned that the initiative risks blurring the government’s attempt to draw a clear political dividing line between so-called “hard-working families” and those caricatured as out-of-work “scroungers”, because it extends the negative connotations of welfare dependency to those who have a job.
Prof Peter Dwyer, of the University of York, who is involved in a five-year Economic and Social Research Council-funded study of benefits conditionality, said: “[This] is political dynamite. Does the government want to be associated with punishing the working poor? When this happened with tax credits they were forced to take a step back.”
In-work conditionality means claimants who are working up to 35 hours a week – and who may never have been on the dole in their life – are forced to attend jobcentre interviews on a weekly or fortnightly basis. They must also spend several hours a week applying for second jobs online, or face financial penalties.
The idea behind so-called in-work progression – the most ambitious scheme of its kind in the world, but as yet untested – is that by providing coaching and support, low-paid workers can be helped to find more or better-paid work, so making them less reliant on wage top-ups.
However, anecdotal evidence is emerging from trials of the scheme that working claimants are angry at being subjected to tight jobcentre surveillance and sanctions. Some question the value of the job support provided and say sanctions are unfair because they have proved they are already motivated enough to work.
By May, in-work conditionality will have been imposed on 15,000 low-paid workers in a handful of trial areas across the UK. An evaluation of the trials is due in 2018. If UC rolls out as planned it is expected that around 1 million workers, many of them currently on tax credits, will be covered by the new regime by 2020.
Dwyer said that if UC stayed on schedule, hundreds of thousands of working people currently in receipt of tax credits, including up to 200,000 lone parents, could find themselves moved on to a regime of jobcentre interviews, job searches and sanctions currently faced only by those drawing the dole.
His research showed that although some working UC claimants supported conditionality in principle, many found the reality unrealistic and degrading. “The tone of many responses was: ‘Why am I being cajoled into searching for a job when I have got a job?’ One respondent had two jobs and was being told to look for extra work.”
In another case, a UC claimant said he was fined £70 after his work shift meant he arrived late at a jobcentre appointment. Another in-work UC claimant reported that he faced eviction after unpredictable working hours meant he incurred multiple sanctions for missing appointments.
The DWP said it had no figures available for the number of working UC claimants sanctioned under the new arrangements, and did not intend to publish any until the trials were complete.
A DWP spokesman defended the scheme, saying it was right that for the first time the government was supporting claimants who were in low paid work to increase their earnings and progress in their careers.
He said: “Universal credit is a vital reform that will make work pay and is already transforming lives, with claimants moving into work quicker and earning more than under the old system.”
Although Duncan Smith’s replacement at the DWP, Stephen Crabb, did not mention in-work conditionality by name in his first major speech this week, he described the initiative positively as “a human being in the jobcentre staying with you as you move into work and progress, coaching you, mentoring you, supporting you”.
However, a number of submissions to a parliamentary inquiry into in-work conditionality say jobcentres, which are facing staffing cuts, will have neither the capacity or the expertise to provide meaningful one-to-one career support and coaching to an influx of hundreds of thousands of working UC claimants.
Imran Hussain, director of policy at the Child Poverty Action Group charity, said: “This is a massive expansion of the role of the state in people’s lives … It is all too easy to imagine it turning into a huge political headache for the government as it intrudes and disturbs the lives of people who feel that once in work they are entitled to financial support to top up low wages and should be helped and trusted to get on with their own lives.”
Case study: Helen Smith
Bar worker Helen Smith returned from a well-earned family holiday in Spain last summer to find a letter on her mat from the DWP. It told her that because she had missed two jobcentre appointments she would be subject to a fine totalling £218.
Smith was baffled. She says she had told her local Widnes jobcentre she was going on holiday, and they agreed to scrap the appointments. The DWP disagreed, saying Smith had not completed her 35 hours a week online job search requirement. Going on holiday, it told her, was no excuse not to look for work.
But Smith was working, typically 30-40 hours a week, in a rugby club bar. She’d worked for 20 years, alongside bringing up two children. “Because I was working I just didn’t understand why I was sanctioned. I couldn’t understand why I had to go every week [to the jobcentre]. I couldn’t get my head around it.”
Smith had fallen foul of the requirement, built into universal credit and currently being trialled, that people working under 35 hours a week at the “national living wage” must seek more hours, an extra job or a better-paid job as a condition of getting low pay top-ups. If they break this commitment, they face sanctions.
“I did 40 hours last week, I’m doing 40 hours this week and 38 next. And I still have to go to the jobcentre to look for a job? It makes no sense,” Smith said.
Smith works on a zero-hours contract basis, meaning she can work as little as 20 hours a week or as many as 50. Over the year, she reckons, it averages out at around 30 hours a week.
“I don’t know why they [the DWP] expect me to find another job? When would I fit a second job in? What employer would take on somebody knowing they might not be able to do the job every week?”
Smith finds it embarrassing that she is forced to go to the jobcentre – a place she associates with people who are out of work – to discuss work options with a work coach. “I actually work more hours a week than the woman in the jobcentre,” she notes wryly.
Cuts to work allowances in UC starting in April mean that Smith now can earn less before her top-ups are clawed back, making it even less of an incentive to do extra hours. “I’ve got to go and work if I want to provide stuff for my kids. But the incentive is practically nothing now.”