2014 11 Welfare Benefits

Monday 1 December 2014

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Poverty and Social Exclusion report

On 24 November 2014 the Joseph Rowntree Foundation published the annual Monitoring Poverty and Social Exclusion report(click here), written by the New Policy Institute. The report tells how the UK’s economic recovery is affecting people in poverty. Key points from the report include:

  • Household incomes fell in real terms for the third year in a row. Median income in 2012/13 was 9 per cent below where it was in 2007/08 and 4 per cent lower than a decade ago. Incomes of the bottom tenth have fallen further and for longer and are now 8 per cent below their level in 2002/03.
  • Two thirds of those in work now but unemployed a year ago are in low-paid work.
  • Changes to the way the welfare system operates have worsened the experience of poverty for many of those affected – whether through rising sanctions, longer waits for assessment or poor job outcomes through welfare-to-work programmes.
  • legal support for social welfare cases has been almost completely withdrawn. As well as cutting support to people with debt and housing problems, this leaves people powerless to challenge incorrect decisions related to their benefits.

Responding to a written parliamentary question on 20 November 2014 about the caseload of Atos Healthcare and the effect this will have on waiting times, Minister for Disabled People Mark Harper said 580,000 claimants are waiting for work capability assessments with Atos Healthcare. Mr Harper said that from 1 March, MAXIMUS Health and Human Services Ltd. will take over delivery. Click here for Hansard.

Food Banks

On 19 November 2014 the Child Poverty Action Group (CPAG), Oxfam, the Church of England and the Trussell Trust published research on why people use food banks. The report, 'Emergency Use Only - Understanding and reducing the use of food banks in the UK', (click here) sets out the findings of research into why people are turning to food banks, based on 40 in-depth interviews with clients at seven food banks across the UK, additional administrative data from more than 900 clients at three of those food banks regarding the reasons for their referral, and analysis of a caseload of 178 clients accessing an advice service at one food bank Key findings from the research are listed below:

  • Food banks were predominantly a last-resort, short-term measure, prompted by an ‘acute income crisis’ – something which had happened to completely stop or dramatically reduce their income.
  • Income crisis could be caused by sudden loss of earnings, change in family circumstances or housing problems.
  • However, for between half and two thirds of the users from whom additional data was collected, the immediate trigger for food bank use was linked to problems with benefits (including waiting for benefits to be paid, sanctions, problems with ESA) or missing tax credits.
  • Many food bank users were also not made aware of the various crisis payments available in different circumstances, and even fewer were receiving them.
  • Many food bank users faced multiple challenges, including ill-health, relationship breakdown, mental health problems or substantial caring responsibilities. Many were unable to work or had recently lost their job.

For further comment, see also ‘The gaps in the welfare ‘safety net’ and the scope for using judicial review by Desmond Rutledge on the Garden Court Chambers Blog – click here.

The Social Security Advisory Committee

On 6 November 2014 the Social Security Advisory Committee (SSAC) launched a project on ‘localisation’. As part of this project the Committee has invited submissions about ‘localisation and social security’. Key questions the Committee would like to consider include: What is the rationale for having some benefits/entitlements configured and accessed on a national basis and some on a sub-national or local basis? Is there evidence that Welfare Reform is displacing costs from central to local government? Responses need to be submitted to the committee’s Secretary by 12 December 2014:

On 18 November 2014 the government launched a review of the Social Security Advisory Committee (SSAC). In a written statement to Employment Minister Esther McVey said the review will look at the Committee’s functions and whether it needs to continue to exist - click here.

On 20 November 2014 the Social Security Advisory Committee (SSAC) published its report on regulations removing entitlement to housing benefit for EEA jobseeker's allowance claimants. The report sets out a series of recommendations - covering homelessness, monitoring and evaluation, and the broader government strategy for migrants - and a government statement on each. The Committee's recommendations include that the government should, as a matter of urgency, consider what action is needed in order to mitigate potential unintended and harmful effects on homelessness, to which the government responds that it:

'... wishes to deter EEA migrants from coming to the UK if they do not have a firm offer of or realistic chance of securing work. Those who come to the UK to look for work should ensure that they have sufficient resources to pay for their accommodation needs, as well as other support that they or their family may need while here.

The best option for those EEA migrants who are unable to find work, who lack savings or support networks and who are at real risk of ending up destitute is to return home.

For further information see ‘Existing EEA migrants at risk of destitution following the removal of Housing Benefit’ by Desmond Rutledge on Free Movement – click here.

Report on tax and benefit changes

Changes to benefits and taxes since May 2010 have led to cuts in income for the poorer half of the population and gains for the wealthier half, according to an independent study carried out by the London School of Economics and University of Essex published on 17 November 2014. The discussion paper'Were we really all in it together? The distributional effects of the UK Coalition government's tax-benefit policy changes', (click here) concludes that the overall fiscal effect of the changes after May 2010 up to 2014/2015 was neutral, rather than contributing to deficit reduction, since the revenue gains from some tax changes and benefit cuts were offset by the cost of tax reductions – click here.

Sanctions - New DWP Statistics

New DWP statistics issued on 12 November 2014 show that almost 1.5m sanctions have been applied to jobseeker's allowance (JSA) claimants since the new JSA sanctions regime began in October 2012. The figures also show that nearly 50,000 sanctions were applied to employment and support allowance claimants since the beginning of new regime. In respect of JSA claimants, the statistics show that 121,105 were ‘high level sanctions’ – i.e. a sanction that leads to claimants losing all of their JSA for a fixed period of 13 weeks for a first failure, 26 weeks for a second failure and 156 weeks for a third and subsequent failure (within a 52 week period of their last failure). The DWP statistical release: 'Jobseeker’s Allowance and Employment and Support Allowance Sanctions: decisions made to June 2014', is available from gov.uk - click here.

DWP statistics also show that 5.6 per cent of lone parent income support claimants sanctioned in the year up to June 2014. 42,300 sanctions were imposed and some claims were sanctioned more than once. The November 2014 quarterly bulletin Income Support Lone Parents Regime: Official Statistics is available from gov.uk – click here.

Work and Pensions Committee launch inquiry into benefit sanctions

On 7 November 2014 the Work and Pensions Committee launched an inquiry into benefit sanctions policy. The inquiry is to consider aspects of sanction policy which were outside the remit of the Oakley review. Topics include:

  • employment and support allowance (ESA) sanctions - whether the current ESA sanctions regime is appropriate and proportionate for jobseekers with ill health and disabilities, and the reasons for the recent sharp increases in the number of ESA sanctions;
  • whether particular groups of ESA and jobseeker's allowance (JSA) claimants (by impairment type, age, gender etc.) are proportionately more likely to be sanctioned than others.

For further information see Committee launch inquiry into benefit sanctions from parliament.uk – click here.

Restricting welfare benefits for EEA Migrants

In a report published 6 November 2014, the Guardian says that ministers are preparing plans to bar jobseekers from the EU from receiving all out-of-work benefits once the universal credit system is completely introduced. Under EU rules, any benefit that is primarily designed to facilitate access to the labour market must be made available to everyone across the EU, but the government will argue that universal credit is instead about social security and is in essence an anti-poverty measure and anti-welfare-dependency measure. The Guardian goes on to highlight that changes in legislation have already been introduced, such as time restrictions and qualification periods for access to income-based jobseeker's allowance, and that migrants since 2000 have been 43 per cent less likely to get state benefits or tax credits compared with the UK-born labour force, and 7 per cent less likely to live in social housing.

For more information see Tories plan to deny EU migrants out-of-work benefits under universal credit from the guardian website – click here.

In a speech given on 28 November 2014, David Cameron proposed far-reaching curbs on welfare benefits for EEA migrants. These include:

  • Stopping EEA migrants from claiming in-work benefits, such as tax credits, and getting access to social housing for four years.
  • Stopping migrants claiming child benefit for dependents living outside the UK.
  • Removing migrants from the UK after six months if they have not found work.
  • Stopping EU jobseekers claiming Universal Credit.

Case Law

In Dano v Jobcenter Leipzig (Case C-333/13) the Grand Chamber reaffirmed that a Member State can refuse to grant certain non-contributory social benefits to economically inactive Union citizens who exercise their right to freedom of movement solely in order to access another Member State’s social assistance. Ms Dano and her son had been residing in Germany since November 2010, where they lived in the home of Ms Dano’s sister. Ms Dano was not seeking employment and had not worked in Germany or Romania. The proceedings arose out of her request for benefits under the German Social Code (SGB II) by way of basic provision for jobseekers. Ms Dano’s claim included subsistence benefits for herself and social allowances and a contribution to accommodation and heating costs for her son. The claim was refused on the basis that the Code expressly excludes ‘foreign nationals whose right of residence arises solely out of the search for employment and their family members’. The CJEU held that as Ms Dano and her son did not have sufficient resources, and thus could not claim a right of residence in Germany under the Residence Directive 38/2004/EC, they could not invoke the principle of non-discrimination laid down by the Directive nor could they rely on the non-discrimination rule under Regulation EC/883/2004 on the coordination of social security systems, .following the ruling in Brey (C-140/12). Given its findings on EU law the CJEU went on to reject Ms Dano alternative argument that she could invoke the Charter of Fundamental Rights of the EU in this context. Click here for the judgment

For further information see ‘Dano and the exclusion of inactive EU citizens from certain non-contributory social benefitsby Desmond Rutledge on Free Movement – click here.

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