Work and Pensions Secretary Iain Duncan Smith has confirmed that part-time workers could face benefit sanctions under Universal Credit.
IDS told the Work and Pensions Select Committee that trials were being carried out in parts of the North-West of England, on removing benefits from part-time workers who refuse to take on extra hours.
“In work conditionality” within the Universal Credit system could encourage part-time workers and the low-paid to seek additional hours, said Mr Duncan Smith.
However, Labour MP Debbie Abrahams said people were dying as a result of the having their benefits docked, a claim dismissed by Mr Duncan Smith.
Mr Duncan Smith told Debbie Abrahams that the benefit sanctions regime was “helping people focus” on finding work or additional hours, adding “a job doesn’t stay static at 16 hours – you want it to develop”.
Ms Abrahams asked the Work and Pensions Secretary:
“Can you confirm that there is an intention to introduce in-work conditionality with Universal Credit and, if so, what sanctions could be applied, and under what conditions to the 3.5 million people in work on low pay and in receipt of tax credits?”
Iain Duncan Smith replied:
“That is being investigated, as to whether we can now work to in-work sanctions – in other words, conditionality – so people get an opportunity to move up the hours if they can, and if they don’t wish to do that, we will see whether or not that system of conditionality works. We are trialling that.”
Ms Abrahams also accused Duncan Smith of a cover-up after he said no money had been lost during the botched introduction of Universal Credit. The DWP has already been forced to write-off £40 million in failed IT software, with an additional £91 million predicted to be lost over the next few years.
Universal Credit is replacing a number of existing benefits, including Housing benefit and Income Based Jobseeker’s Allowance, and rolling them into one single monthly payment. However, the government’s flagship welfare reform has been beset with delays and costly IT failures.
Up to a million households were originally expected to be in receipt of the new benefit by the end of 2014. But DWP figures show that less than 15,000 households or individuals were on Universal Credit by the end of September – mostly single people. The national rollout is scheduled to be completed by the end of 2018.
Mr Duncan Smith said trials of Universal Credit in the North-West of England had resulted in claimants finding work more quickly or taking on extra hours, leading to “early savings to the Exchequer”.
He added that businesses were more willing to take on people claiming Universal Credit than Jobseeker’s Allowance claimants, because those people could accept additional hours while keeping more of their benefit.
“Normally in a business, a job doesn’t stay static at 16 hours – you want it to develop”, he said.
“Businesses know that many people will not work more than 16 hours because they don’t think it is viable for them to do so because of all the withdrawals.
“What we are beginning to experience in areas of the North-West is they can now work to progress that individual and set training programmes around them, so it is worth investing in that individual to develop their own skills and their own productivity.
“In the North-West, many businesses are now asking to have people on Universal Credit to come and take interviews, because they know they can develop them all the way through.”
Sourc e – Welfare Weekly, 09 Nov 2014
This article was written by Patrick Butler, social policy editor, for theguardian.com on Wednesday 26th March 2014
Low income families hit by welfare reforms are running up personal debt at the rate of £52 a week to cope with the rising cost of living, with many saying they have no idea if they will be able to pay it back, according to the latest instalment of a poverty research project.
The project found that the average household debt stood at just under £3,000, up by 29% since October, equivalent to £670. Families were typically spending £34 a week repaying debts, from an average income among those surveyed of £176 a week.
Almost half of the participants in the survey, all of whom have been affected by welfare reforms such as the bedroom tax, report that they have no money left to live on each week once rent, food and bills are paid for.
The findings emerged in the third of six planned reports by a group of housing associations, which are tracking how families living in social housing in the north-west of England are coping with cuts to their income as a result of welfare changes and recession. The Real Life Reform project examines in detail the finances, views and behaviours of a group of up to 100 households.
Andy Williams, director of neighbourhood services at Liverpool Housing Trust and chair of the Real Life Reform steering group, said: “Householders are falling into more debt, including some taking money from loan sharks, and it’s a real concern that people are having to borrow to cope with the cost of everyday living.
“In our first report in September, people said they’d resist falling further into debt, yet just six months later this picture has emerged.
“Nearly eight out of 10 people in the study owe money. With an underlying average debt of £2,943, some may never pay this off given that they have, on average, as little as £3 left at the end of each day for food.”
The survey found that the number of households in debt was up four percentage points since the autumn. Over half of families said they did not know how long it would take them to repay the debt or that they would never be able to repay it. Nearly one in seven households had debts that would take more than four years to pay back.
One participant told the project: “I have just taken out a new loan from a loan shark for Christmas. It will never go down but it just about keeps my head above water.”
The report said that poorer families were increasingly reliant on debt to make ends meet. “The consequences of weekly repayments, which have more than doubled since the start of this study, alongside increasing costs in all areas, is really placing financial strain and hardship on our households.”
Household food spending by Real Life Reform participants, which had dipped to an average £2.10 a day in October rose to £3.08 in January, an increase attributed to bigger-than-usual grocery shopping bills over the Christmas holidays.
Fuel spending had gone up by 8% since the last survey was carried out in October while household fuel bills had risen by an additional £7 a week since the summer. Participants were spending an average of £141 a month on energy, compared with the UK average of £106, in part because many were on expensive payments meters charging 27p per kilowatt hour compared to 17p for those not on meters.
Source – Welfare News Service, 26 March 2014