Chapter 4 Other areas of reform
Summary
The potential for structural reform to the benefits and tax system brings with it the opportunity to consider other reforms of the system. External organisations have suggested that it is important to consider the role of conditionality and the contributory principle in reinforcing work incentives and providing support. There are also wider questions over the role of localism in the delivery of system welfare.
1. Chapter 3 set out a number of options for structural reforms of the welfare system that could improve work incentives. Many of the reforms suggested by external organisations suggest that the role of the current system of conditionality and contributory benefits should be considered alongside potential structural reforms.
Conditionality
2. Individuals who are able to look for work or prepare for work should be required to do so as a condition for receiving benefit and those who fail to meet their responsibilities should face a sanction such as a benefit reduction. This is known as conditionality. Evidence shows conditionality is effective in reducing unemployment. So it is essential that any changes to the structure of support are underpinned by clear expectations about what claimants need to do in return for the support they receive. In particular, any new arrangements should not water down the current conditionality for jobseekers.
3. In the current system the benefit claimed determines the level of conditionality. Generally Jobseeker’s Allowance claimants must engage in active job search, with powers to extend conditions the longer a person is out of work. Evidence shows conditionality is effective in reducing unemployment. Any future reforms should seek to build on that success. Lone parents on Income Support and people in the Employment and Support Allowance work-related activity group must attend work-focused interviews. Figure 4 illustrates the current system of conditionality for people on out-of-work benefits.
4. Some of the structural reforms could merge many of these benefits into a single payment. This creates the possibility that the level of conditionality would be determined, not by the benefit received, but by the reason for receiving benefit, creating a single progression to higher levels of conditionality. Structural reforms could also remove the distinction between in- and out-of-work benefits, enabling a new approach to conditionality that aimed to incentivise people to enter work and progress – increasing hours and earnings until they move off benefits altogether.
5. This would raise the issue of when a person is deemed to be doing enough work such that we would stop applying work-related conditions to their benefit. For example, it may not be sensible to cease applying conditions as soon as a person earns any income as that would increase the temptation for some people to remain working for just a few hours, thereby increasing welfare costs and fostering dependency rather than self sufficiency. We ought to look at applying conditionality in a way that pushes individuals to increase their work to levels that are appropriate to their own particular circumstances. For instance:
- A single person working 17 hours a week at the National Minimum Wage. Under the current system, no conditionality applies despite the fact that the individual may be claiming a range of benefits. Under a new system we could continue to apply conditionality to push that individual to extend their working hours and/or increase their earnings until they were working full time or until they were off benefits altogether.
- Jobseekers. Currently most Jobseeker’s Allowance claimants are required to look for full-time work. In the future, for some individuals (for example, where the person had been away from the labour market for many years) conditionality could initially be used to move a person into work for a few hours. This work experience combined with ongoing conditionality could act as a stepping stone into sustained full-time work. The existing system may hamper the first step of this journey by requiring an immediate focus on full-time work, regardless of individual circumstances.
- Benefit claimants who currently have no work search conditionality applied (for example because of ill health or caring responsibilities). We could apply conditionality to match financial incentives for working even relatively short hours where appropriate – requiring some people to look for or prepare for work of a few hours a week in line with their capability and circumstances – and extend conditionality as an individual’s circumstances change (for example, when their health improves).
6. Such an approach would require careful consideration to ensure that a personalised conditionality regime did not dilute or undermine the current success of conditionality in incentivising and promoting work. Our key aim is to make it much clearer that the commitment to work is the foundation of the benefits system for people of working age. This is at the heart of our thinking. We could ask everyone who is able to work, or to take steps to prepare for work, to sign a document setting out their obligations and the activity required to satisfy those obligations.
7. For those who fail to meet their obligations we may withdraw their benefit until they demonstrate that they have re-engaged with their personalised set of commitments. For those closest to the labour market this loss of benefit for the period of their non-compliance may be permanent. For others, some or all of their withheld benefit may be paid to them once they demonstrate re-engagement. We could explore the role that non-financial sanctions can play in encouraging compliance. We could also look again at the way the current safeguards against the risk of hardship operate and whether they need modernising to ensure that our wider reforms work effectively for everyone. However, financial support for people who are not able to work, or prepare for work, would remain unconditional.
Question 7
Do you think we should increase the obligations on benefit claimants who can work to take the steps necessary to seek and enter work?
Question 8
Do you think that we should have a system of conditionality which aims to maximise the amount of work a person does, consistent with their personal circumstances?
Localisation
8. The UK has a highly centralised system of benefit design and delivery. There are a number of advantages to this, not least in terms of economies of scale and ensuring national safety nets. However, a number of other countries, including Switzerland, the Netherlands and the United States, operate more devolved welfare systems, which can stimulate innovation and ensure that systems are more aligned to local circumstances.
9. There are a number of options for moving to a less centralised welfare system. In terms of incremental reform there could be more discretion to advisers at the local level – currently there are limited funding streams (the Adviser Discretionary Fund) and little wider autonomy at Jobcentre Plus district level.
Question 9
If you agree that there should be greater localism what local flexibility would be required to deliver this?
Linkages with other forms of labour market and welfare support
10. The benefits system is not the only way in which the Government seeks to support those in need. People out of work sometimes need to gain specific skills to enter and progress in employment and training. Any training offered needs to be flexible, responsive and relevant to the labour market and should facilitate the flexibility to continue training once in work. Another example is Government support for the provision of affordable housing and sub market rents. We recognise the imperative to increase the supply of new homes, including new affordable homes, and to ensure sustainable funding for the affordable homes that we already have.
Question 10
The Government is committed to delivering more affordable homes. How could reform best be implemented to ensure providers can continue to deliver the new homes we need and maintain the existing affordable homes?
Contributory Benefits
11. Contributory benefits play an important role in the system. However, reforms will need to consider the balance between contributory benefits and targeting support on those with the lowest incomes.
Northern Ireland
12. Social Security is a devolved matter in Northern Ireland. The Government will continue to work closely with the devolved administration in Northern Ireland to seek to maintain a single system across the United Kingdom.
Conclusion
13. The illustrative options for structural reform outlined in chapter 3 and suggestions from external organisations present us with the opportunity to consider a range of other issues in the current welfare system. As we continue to consider the case for reform, we will consider:
- the scope to strengthen the conditionality regime and ensure that it is aligned with any reforms to the system;
- the scope for having a more tailored, personalised system in which the conditionality regime for people within certain groups could be extended;
- the role of localism in delivering the welfare system; and
- having a system which supports the Government’s aim of moving everyone who can work into work and to maximise the percentage of a person’s income that comes from their earnings.
This consultation is now closed.
As many of the people who end up on long-term JSA are claimants with mental health conditions and other disabilities, who have had their sickness benefit(IB/ESA) withdrawn following a poor/unfair medical – i would be extremely wary of any conditionality/threat of sanctions. Applying any kind of stick approach to such a vulnerable client group is not only inhumane and totally unacceptable, it is also counter-productive. People will become distressed, destabilized and disengaged. People will lose their homes – those admitted to psychiatric wards may end up being the lucky ones.
I welcome third sector charities and voluntary organisations running schemes to support people with complex needs into meaningful and sustainable employment (this concept is nothing new – the Richmond Fellowship and others have been supporting people with mental health conditions on a volutary basis for years).
However, questions have to be asked about any social enterprise schemes such as Forth Sector offering ‘long-term’ work placements for people with mental health conditions.
http://www.24dash.com/news/communities/2010-09-22-Duncan-Smith-Social-enterprise-critical-to-helping-people-back-into-work
Whilst i assume Parkview Laundry’s working conditions and ethos have moved on from the old Magdalene Laundries – i personally would find such repetitive, low-skilled work in a possibly hot/damp environment intolerable. It is outrageous that people with mental health conditions are working for an average of two years without being paid a proper wage.
I would like to see evidence of social enterprise schemes leading to varied (including professional), flexible and sustainable employment for people with mental health conditions and other disabilities.
First the DLA is to help disabled to become more independant and to give them quality of life foe example a person on higher rate of DLA mobility & carer would bring in around £121 a week, then you can pay for services to come in and help you such has home care & mobility, to employ someone to do those things would cost you on average a say at 35 hours per week at minium wage £183.75, so really the govenment is already saving money, if you take it away and then the services will fall on the councils and it would cost £604 a week for 35 hours per week. So my point is that people on DLA are not really receiving anywhere near what they would receive if they were working at a minium wage. It is not much fun being diasabled or long term sick, and a lot of us would like to give our illness and disabilities away.
Has far as Carer allowance how many would work to look after a sick person for 35 hours per week at £53.90 not many. This is below mininium wage and to tax people or reduce this then less family members or friends will look after them and would then put more pressure on the government and councils to provide the care which would cost around £600 a week and even at mininium wage would cost £183 a week.
Who ever comes up with these idea’s in government you need to come out of your office and come and meet normal everyday people who are disabled or who are carers, its not easy.
Is it also true that alcoholics receive benefits with it being classed as an illness? is this not like throwing fuel onto an already raging fire? Again WHY!
I believe some benefits should be looked at very closely to see how ridiculous they are and simply stopped.
I believe signing on should be more frequent, with frequency being related to time unemployed, eg: within the first year once a week, into the second year twice weekly, if unemployment reaches a third year then full time should be required for rehabilitation, again no attendance, no benefit, not just a reduction, only full time employment for the same duration should reduce the frequency of signing on should they become unemployed again, so that a short period of employment would not get them out of signing on with frequency, for example if you sign on twice weekly and then get a job for just one month they would return to signing on twice weekly, only each full years employment would reduce frequency if going back to unemployment, then the cycle would start again.
If you are working and take a day off you have to take the loss so why should it not be the same for benefits, the idea of receiving money for free with nothing given back should be stopped.
Is it true that migrant workers get child benefits for children back home and not residing in this country? or am I hearing this wrong? If it is correct, WHY?
I’m sure no one will listen to this, but I hope someone at the DWP is listening, I recently helped Duncan-Smith’s Chief of Staff with his campaign literature.
Why is it that 18 year olds who have secured university places but are choosing to take a year out before going, are eligible for job-seekers allowance? It seems that this is not what this benefit is for. In this time the welfare system should not be providing for people who simply want to travel.
I know there are not very many claimants, but if we’re serious about cutting the deficit, this is exactly what needs to be looked at. Every little helps!
I think that people on incapacity benefits who pass medicals and are declared unfit for work should be getting the same amount of benefit as they get now. They should not be punished for their lack of health. I agree with that more medical evidence could be required (doctors and hospitals records) someone who never visits a doctor and or a hospital should be seen as fit for work. Medicals should be more objective. It is important that outcomes of medicals can be challenged by the claimant, the appeal process and in court, this to warrant fairness and objectivity of decisions made.
I would only cut the higher rate of disability living allowance, the lower rate is not much at all, for someone who needs care and help with mobility, they hardly can pay the costs of using taxis from that. The higher rate needs to be slashed by at least 30 percent, because those people on higher rate are getting more in benefits than the average wage.
So i suggest to keep the current level of incapacity benefit and lower rate of DLA but cut the higher rate by 30 to 50 percent.
It is okay to re-asses every claimant once every 5 years if you do it more often I wonder if you would really save much money to cut the deficit because you have to spend it again on expensive medical staff to be hired to carry out all those assesments
Just as a point on the first paragraph… my sister (25 yrs old) is autistic to the point where paid work is near impossible. Firstly she would never get through an interview never mind an application form and once in work tehre is little she could do. She currently volunteers at a hairdressers where she sweeps up but she is taken there and back again and supervised throughout. Fit for work does not neccessarily mean you don’t visit a doctor I’ve been more than her in the last month!
I still think that even with these kind of incapacities, there is at least contact with social workers, other health workers who should supply evidence to the medical examiners, (I am myself on incapacity), but it is about those who are cheating the system, I know about people who claim not being able to walk 200 yards, go on cruches only when they have to visit the medical.I am convinced your case is genuine. still we have to supply evidence because of those who are cheating the system. She is not fit for work we need the evisence save as many records as you can.
I see people daily who I believe to be cheating the system, I don’t know what benefits they take, what I do know is, they look fit enough to work, one is suposed to be agoraphobic, it does’nt stop him from standing in the street with a can of lager in his hand, it is people like this that need monitoring better, if my area had its own mini economy it would collapse straight into the red with the amount of people that do not work.
I still believe all unemployed fit people should attend somewhere on a daily basis to gain benefits.
I dont think receiving higher rate DLA in itself means that a person necessarily has an income anywhere near the average wage.How does it help to cut higher rate DLA which is paid to people who cannot walk and need support throughout the night? Surely the issue is to ensure that those who genuinely need help and support receive it, something all of us who work contribute to in our taxes in the same way we support those who are being cared for by the NHS.
I think there should be a much stronger distinction made between people who require support for long term disabilities and those who are sick with a condition that has the prospect of improvement.
I dont think the language of ‘Incapacity’ sits well with current disabled identities and should be dropped in favour of ’support’ benefits. Many people with disabilities strive often within very limited parameters to be seen in a way that presents the positive rather than the negative and a benefit which uses language that reflects these aims would be a small step in realigning what benefits are supposed to be for, helping to support those who are unable to support themselves.
What i would suggest is that DLA can only become available for those who have been on incapacity for more than 5 years. We have still to keep in mind that we have to cut the deficit. Those who are on DLA will keep it. Well DLA has nothing to do with what kind of medical condition, it is related to the extra costs you have to make with regards to your medical conditions. Maybe we have to come to a situation that people have to send their receits to the Treasury. to proof that they are making the costs they have been expected to make. to justify the DLA payments. Well I think that the DLA already makes the distinction between health issues that will improve (incapacity benefit) and what will not improve (DLA)
As much as it maddens me that the unemployed make it a lifestyle, they should not be punished, its the very large loopholes that need closing which they have been allowed to sit in, I believe reformation is needed to motivate people into a routine the same as a working person, after all many claimants take more in benefits than they would if doing full time work so it is obvious the option they have gone for is to stay at home, I believe a structure should be set up so if you do not want to be a part of working society, then don’t, just do not expect anything from it.
If you do want something from society then you can work or learn basic skills to get benefits attending on a 35-40 working week, remember that claiments for unemployment benefit have to be available for work, so no excuses.
It could be expensive to set up but empty commercial/industrial property could be used as college and also as a base for the benefit offices, where relevant basic skills for todays industry can be learned,including career guidance, maybe even gaining some sponsorship from private industry. a resume could be built up over a period, with attendance records for the benefit of prospective employers, a transition into proper work would be required either part or full time, but if time is taken off you lose benefit, poverty is a risk, but they would be authors of their own situation, having claimants attending for benefits would make monitoring for fraud much easier so money would be saved on this front, does anyone really know what is being lost in fraud? claimants may decide that if they have to get up early on a daily basis for benefits it would be easier to work in proper employment, understandably at the moment it is diffult to find employment, but jobs are out there and using this system may lead to filling the present voids and creating work in the centres themselves, maybe the centres themselves being maintained by claimants to reduce costs, as mentioned previously, it could be expensive to set up, but would it not come down after a period when unemployment is reduced?
My other question to the DWP is, if I have to work till I am seventy, do the lifestyle unemployed get another five years grace?…………… just to make me feel a little more disgruntled.
Agree with all the others. We need to ensure that it is not possible for someone to live reasonably comfortably without ever working a day in their lives- unless there’s some really good reason such as disability. Having kids is NOT a good enough reason by itself. If the able-bodies were required to clean toilets or whatever in order to get their benefits, they might be more inclined to seek other work, but currently we make it too easy.
I live in the middle of a high number of unemployed people, I also have a few relatives on benefits, they are mainly lifetime unemployed with no wish to work, never mind voluntary! and yes, the unemployed families are multiplying, they do not have any real responsibilities, with rent and council taxes being paid direct and only paying a small contribution themselves, with some still accumulating large arrears, they are still comfortable with no risk, compare this to a working person, with a mortgage, who may have accumulated motgage arrears, what position would they be in?
I believe the government really do need to get to know this demographic, and more positive efforts made to solve this problem.
I myself am in work, It is a very difficult situation to be in, to keep up moral going to work on a daily basis, early, freezing cold mornings, knowing that they are cosily tucked up in bed, I have in the past, offered vacancies from work when they have arisen, only to be mocked or laughed at, at even suggesting they should work,
Benefits should be for the people that really need it, why not have places set up, maybe a special college, so that the lifelong unemployed,(able bodied) have to attend on a working hours basis, to get paid benefits, they could have a transition into work, part time or full time, if you do not attend, you get nothing.
after all, if their time is taken up, it would make benefit fraud difficult, one person claiming as three cannot attend as three, they cannot easily do cash in hand work, it may cut down on crime, drug dealing, black marketeering.
it could be difficult and expensive to set up, it may cause more poverty, but it would be self inflicted, by what other method would they learn the ethics of working for a living? not for one second do I believe volunteering will work.
Good Ideas expressed above.
Transparency is important, so the names and addresses of people that the tax payer is paying benefits too should be published. The open government principal that all government expenses should be published applies here too.
Much as I’m in favour of the details of convicted benefit fraudsters being made public, the idea of publishing a list of everybody’s personal details who’s claiming benefit is repugnant and surely would surely breach data protection principles as well as being stigmatising to the majority who are valid claimants. Government expenses should be published, but only to a general level, for e.g how many DLA claimants live in a certain area; and not to the level of identitying specific individuals who claim.
Besides, civil servants are doing a good enough job of leaving this type of information lying around on memory sticks on public transport to render the step unnecessary anyway!!
This is my tax payer money. So what is so unfair about my being able to check on the list who is claiming benefits on my street? I know who lives here and if someone is cheating the system (e.g. claiming twice or claiming while working) I want to know this. There has to be a disincentive to cheating and the alternative involves the state paying money in order to find cheats, this method is free. This is exactly what is done in Switzerland, it results in a very low level of fraud. They quite rightly say that people should be supported, but they want to know exactly where their tax money goes.
I wasnt going to comment on this, but here goes, WHY DO YOU HAVE TO GET FULL TIME EMPLOYMENT WHEN APPLYING FOR JOB SEEKERS ALLOWANCE? Surely any job is better than nothing, a bit more encouragement from you lot please! Try giving more money to the genuinely needy and stopping it for the non genuine cases. Also, if doing voluntary work, WHY IS IT THAT A CERTAIN AMOUNT OF HOURS CAN AFFECT YOUR BENEFITS, as I was told by one of your robotic, less than helpful members of staff, when you are NOT being paid!
Question 7: Yes. Perhaps conditions could even include participating in voluntary work until paid work is secured. This would enable skills to be developed and motivation increased. You’re more likely to find paid work if you’re actively doing something, rather than sitting at home.
Question 8: As long as due consideration is given to people who use their non-work time to attend college, look after children/relatives etc. It’s important to recognise that people’s involvement in other things outside work still may have social benefit e.g voluntary work/caring/education. It shouldn’t be an expectation of an individual to increase working hours if involvement in such activities can be demonstrated.