This article was written by Leah Green, for theguardian.com on Wednesday 21st May 2014
Changes to the habitual residence test, designed to make it harder for European Union migrants to claim benefits, mean UK citizens who have been abroad for an extended period cannot claim jobseeker’s allowance (JSA) for the first three months after their return.
It means that people who travel for more than three months – including gap-year students, graduates and people taking career breaks – are being denied JSA to help them while they find a new job.
The new rule came in on 1 January, the same day it became legal for migrants from Romania and Bulgaria to enter the UK on work visas. In a government-issued statement on the new rules, the work and pensions secretary Iain Duncan Smith said: “The British public are rightly concerned that migrants should contribute to this country, and not be drawn here by the attractiveness of our benefits system.”
However, in attempting to combat predicted “benefit tourism” from eastern Europe, the government has made it impossible for UK citizens returning from abroad to claim as well.
Yvette Cooper, shadow home secretary, said:, “British-born citizens who have been travelling, doing internships or living abroad temporarily shouldn’t be treated in the same way as those coming into our country for the first time.
“Habitual residency rules should be about making sure people who are new arrivals to the UK, and have not yet made any contribution or commitment to this country, do not claim benefits they are not entitled to. British citizens are in a completely different situation, and the government should recognise that.”
Rosie Smith, 24, and her boyfriend Alexi Dimond, 29, are both from Sheffield and returned to the country in March after almost six months living and doing voluntary work in Thailand. Smith had been in the same city since she was born. She wanted “a bit of a change”, she said: “I had been in Sheffield my whole life. I just wanted six months not in Sheffield.”
Smith saved money from her job as a nursery nurse, while Dimond worked in administration at an NHS dental hospital. When they got back, they wanted to look for work immediately and registered with the Jobcentre the next day. Dimond claims the person asking him questions for the habitual residence test was “very apologetic” for even making him undergo it.
He was told he was not, under the new benefits rules, considered habitually resident in the UK and would have to wait three months before claiming JSA. “I thought it was outrageous really,” he says, “I’ve contributed tax for the last six years working for the NHS. I think it’s ridiculous I’m not entitled to anything.” He now had no money at all, he said, and was relying on friends for food. Smith has moved back in with her parents.
Alongside his job, Dimond had done voluntary work with asylum seekers for five years before leaving the UK. When enquiring at the Jobcentre how he was supposed to survive, he was handed a leaflet entitled Emergency Help in Sheffield. It is the same leaflet he was issuing to asylum seekers before he went away. “It’s basically the help you get when there is literally nothing else,” he explained.
British citizens have always had to take a habitual residence test before being granted benefits, but only since the rules changed on 1 January have people been told they automatically fail for spending time out of the country.
Sam, 25, is back living with his parents in Manchester for the first time in seven years after being refused JSA on his return from a year in the Netherlands where he was doing a master’s in psychological research.
Sam had hoped he would get a job as soon as he got back “but that’s not the case,” he said, “so I applied for jobseeker’s soon after I got back.”
He was taken aback to have his application for benefits turned down. “I think if you’re looking for work you should get jobseeker’s allowance. That’s what makes sense,” he said.
Sam’s parents are providing his food and shelter, and he is dipping into savings to travel to job interviews in London. He realises he is lucky to be cared for, claiming it is unfair on others “who don’t have that support. You would think then that support should come from the government.”
However, he is sympathetic to a tougherstance on immigration, agreeing that migrants “shouldn’t be able to claim [straight away] if they come from abroad.”
Emma Birks, 36, was a volunteer co-ordinator at a worker’s co-operative in Birmingham before deciding to go travelling in south-east Asia. “I’d been putting it off and putting it off,” she explained, “and then sometimes you think ‘life’s too short’.”
Since she got back in March, Birks has had no home and has been living between the houses of “three or four” charitable friends. She has been surviving by taking handouts and using credit cards. Because of her work, she knew about the habitual residence test and never dreamed she would fail it. She describes her situation now as “a bit demoralising and humiliating.
“The whole point of jobseeker’s allowance is to help you in that interim period where you’re looking for work, trying to find a new start or whatever. To me, that’s the whole point of jobseeker’s and it’s just failed me basically,” she said.
Dimond agrees. When we speak, he and Smith are at the beginning of five days of agency work, stopping people in a Doncaster shopping centre and collecting surveys about the facilities. He has had to borrow the money to get to work, and estimates he already needs “about six months” to catch up on his debt, assuming he gets a job soon. “It’s seriously affected my job search,” he said. “I don’t have money to get to interviews.”
Smith thinks they are victims of statistics. The Department for Work and Pensions (DWP) “are just trying to get as many people off their system so they can make their numbers look better … so they can say hardly anyone’s signing on anymore. But they’re just disqualifying everyone,” she said.
A DWP spokesman said: “It has always been the case that any UK national who chooses to live or work in another country for an extended period must, if they return to the UK and want to claim benefits, satisfy the habitual residence test by proving they have strong ties to the country and want to remain here.
“People who have paid enough national insurance in the UK do not have to wait for three months before claiming jobseeker’s allowance.”
The spokesman did not respond when asked how much national insurance was enough, but none of the people interviewed were exempt from waiting three months.
The announcement of the changes in December confirmed the the introduction of the new three-month period in which people cannot claim benefits.
Source – Welfare News Service, 21 May 2014
It is very hard to work out what is going on in the UK labour market because the quality of the statistics is basically junk – garbage in, garbage out describes the lack of quality of the data well. I really am not exaggerating.
Bad Labour Market Data Part 1 is that every other major country, including the euro area as a whole, is able to produce timely estimates, but not the UK.
Currently unemployment rates for February 2014 are available for Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Israel, Italy, Japan, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United States. Data for April 2014 were released by the United States on Friday.
The UK stands out as the only country out of 31 that has no data available for February, March or April 2014.
Pathetic. The national statistic that pretends to be for January is actually an average of December of 2013 and January and February of 2014. The reason for this is simply because the sample sizes are too small to generate accurate monthly estimates.
The Office for National Statistics does in fact publish a single-month estimate of the unemployment rate but that jumps around all over the place.
Let me illustrate the problem. The ONS makes the supporting micro data on individuals available for researchers like me to examine. They take out identifiers so we can’t work out who anyone is. The latest micro data we have is for the three-month period October to December 2013.
In total over these three months 77,657 people between ages 16-98 were interviewed. Of these, 39,761 were employed 6,995 were self-employed and 3,347 were unemployed. The overall unemployment rate, once the data have been weighted and seasonally adjusted is 7.2 per cent, but the relatively small sample size means this estimate is measured with lots of error.
For the technically minded, the 95 per cent confidence interval for the monthly national change is ± 0.3 per cent, which means that any monthly difference smaller than that is not statistically significantly different from zero.
The unemployment rates that were calculated, for example, for East Anglia (5.7 per cent), East Midlands (6.4 per cent), Scotland (7.1 per cent), Wales (7.1 per cent), Northern Ireland (7.4 per cent) as reported by the ONS for October-December were based on ridiculously small samples of 114, 246, 281, 153 and 142 unemployed people respectively. Given the very small sizes the result is that the regional unemployment rates are measured with even more error than the national rate and bounce around like a rubber ball from month to month.
The reason why the ONS struggles to report unemployment rates by month becomes obvious rather quickly.
So the single-month estimate for December of 7.2 per cent that it reports is only based on a sample of 1,198 unemployed people, of whom 632 were male and 452 were under the age of 25.
The number of unemployed people in each of the five regions identified above in December is East Anglia (34), East Midlands (91), Scotland (105), Wales (51), Northern Ireland (55), hence why no single-month disaggregated estimates can be produced.
Bad Labour Market Data Part 2. The government has claimed recently that based on earnings growth of the national statistic called Average Weekly Earnings (AWE) for the whole economy of 1.9 per cent in February 2014 and the fact that the Consumer Price Index has been steadily falling, this means that real wages are set to rise.
If only that was true. But sadly it seems most unlikely given the fact that the Monthly Wages and Salaries Survey (MWSS) on which the estimate is derived has two major sample exclusions whose wages are likely to be growing much more slowly than that, if at all.
First, the ONS has no earnings data, as in none, on the 4.5 million self-employed workers, including large numbers who have set up in business recently. The only earnings data we have available from HMRC are over two years old.
What we do know is that the typical self-employed person earns less than the typical employee and some have zero earnings or even losses; there is every prospect earnings growth of the self-employed will be low.
Second, it also turns out that the MWSS doesn’t sample workers employed in firms with fewer than 20 employees that are the least likely to have strong earnings growth given the difficulty small firms have had in raising capital. The ONS simply makes an adjustment based on the Annual Survey of Hours and Earnings (ASHE), which was last available in April 2013 and which itself excludes the lowest earners below the National Insurance threshold.
The ONS computes an average over the previous three years that it imposes on the AWE monthly data. So the ONS just guesses that what happened in the past applies now. But maybe it doesn’t.
The ONS admitted to me that “ideally, we would sample businesses with fewer than 20 employees in the MWSS. However, we do have to pay close attention to minimising the burden on respondents, and we believe that using the adjustment factor from the ASHE strikes an appropriate balance between this and accuracy of the estimates.”
Really? So making it up as you go along is OK? It turns out that this amounts to approximately 20 per cent of all employees, or another 5.2 million workers whose wages we know zippo about.
So the national wage measure excludes 10 million out of the UK’s 30 million workers and my working assumption, for the sake of argument, is that their average pay rise over the past year is zero (it’s a maybe not-so-wild guess that the ONS can’t disprove)!
There is supporting contradictory evidence of strong earnings growth from the latest UK Job Market Report from Adzuna.co.uk, showing that average advertised salaries have slipped £1,800 in the past year down to £31,818 in March 2014, 0.6 per cent lower than in February, and 5.3 per cent lower than in March 2013.
A survey carried out by the Federation of Small Businesses at the end of 2013 reported that “after several years of wage restraint, it is encouraging that the vast majority of small firms are beginning to raise wages again”. They found that 29 per cent of firm owners said that over the next year they would raise wages for all staff, 35 per cent for some staff, 8 per cent for those on the minimum wage. 22 per cent said they would freeze wages, 2 per cent said they would lower them and the rest didn’t answer.
So the AWE is an upward-biased estimate of wage growth. Garbage in, garbage out. The UK’s labour market data are not fit for purpose.
Source – Independent, 08 May 2014