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Welfare Reform Bill: Social Security Provisions

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Welfare Reform Bill: Social Security Provisions RESEARCH PAPER 09/08 Welfare Reform Bill: 23 JANUARY 2009 social security provisions Bill 8 of 2008-09 The Welfare Reform Bill was presented on 14 January 2009 and the House of Commons Second Reading debate is scheduled for 27 January. It follows the July 2008 Green Paper, No one written off: reforming welfare to reward responsibility and the December 2008 White Paper, Raising expectations and increasing support. It includes provisions to establish a ‘work for your benefit’ scheme for the long-term unemployed, to allow piloting of the ‘personalised conditionality’ regime proposed by Professor Paul Gregg, and to enable the future abolition of Income Support. Other social security measures relate to new requirements for certain claimants, including drug misusers; benefit contribution conditions; the Social Fund; and benefit sanctions for non-attendance at Jobcentre Plus interviews, benefit fraud and violence against Jobcentre staff. The Bill also provides for the ‘trailblazing’ of a new right for disabled people to control how public resources are used to meet their needs; new powers to enforce child maintenance; and for the joint registration of births, as proposed in the June 2008 White Paper, Joint birth registration: recording responsibility. These parts are covered separately in Library Research Paper 09/09 Steven Kennedy SOCIAL POLICY SECTION Bryn Morgan ECONOMIC POLICY AND STATISTICS SECTION HOUSE OF COMMONS LIBRARY Recent Library Research Papers include: 08/86 Interlocking crises in the Horn of Africa 24.11.08 08/87 Small Business, Insolvency and Redundancy 25.11.08 08/88 Parliamentary Approval for Deploying the Armed Forces: An 27.11.08 Introduction to the Issues 08/89 Economic Indicators, December 2008 04.12.08 08/90 Turkey today 08.12.08 08/91 Political Parties and Elections Bill: Committee Stage Report 18.12.08 08/92 Unemployment by Constituency, November 2008 17.12.08 08/93 Business Rate Supplements Bill [Bill 2 of 2008-09] 22.12.08 2009 09/01 Economic Indicators, January 2009 09.01.09 09/02 Saving Gateway Accounts Bill [Bill 3 of 2008-09] 09.01.09 09/03 Social Indicators 14.01.09 09/04 Policing and Crime Bill [Bill 7 of 2008-09] 15.01.09 09/05 Unemployment by Constituency, December 2008 21.01.09 09/06 Coroners and Justice Bill: Crime and Data Protection 22.01.09 [Bill 9 of 2008-09] 09/07 Coroners and Justice Bill: Coroners and Death Certification 22.01.09 [Bill 9 of 2008-09] Research Papers are available as PDF files: • to members of the general public on the Parliamentary web site, URL: http://www.parliament.uk • within Parliament to users of the Parliamentary Intranet, URL: http://hcl1.hclibrary.parliament.uk Library Research Papers are compiled for the benefit of Members of Parliament and their personal staff. Authors are available to discuss the contents of these papers with Members and their staff but cannot advise members of the general public. We welcome comments on our papers; these should be sent to the Research Publications Officer, Room 407, 1 Derby Gate, London, SW1A 2DG or e-mailed to [email protected] ISSN 1368-8456 Summary of main points The Welfare Reform Bill was presented on 14 January 2009 and the Commons Second Reading debate is scheduled for 27 January. Since 1997 the Government has instituted a series of reforms to the welfare system designed to reduce benefit dependency and encourage more people into work, including the establishment of Jobcentre Plus, the introduction of employment programmes such as the New Deal, tax credits, the National Minimum Wage, the Pathways to Work programme, the replacement of incapacity benefits with the Employment and Support Allowance, and changes to lone parents’ benefits from November 2008. The social security measures in Part 1 of the Bill have been presented as steps towards realising the Government’s vision of a ‘personalised welfare state’, where people are given more support to help them overcome disadvantage and move towards work, matched by higher expectations that they will take up that support. The Bill follows the December 2008 Welfare Reform White Paper, Raising expectations and increasing support: reforming welfare for the future, which developed proposals set out in the July 2008 Green Paper, No one written off: reforming welfare to reward responsibility, and the report of the independent review by Professor Paul Gregg, Realising Potential: A Vision for Personalised Conditionality and Support, published on 2 December. The Government’s approach has also been influenced by the recommendations in David Freud’s March 2007 report for the Department for Work and Pensions, Reducing dependency, increasing opportunity: options for the future of welfare to work. One of the key themes in the Freud report was further contracting out of back-to-work provision. Part 1 of the Bill includes, among other things, provisions to enable a mandatory ‘work for your benefit’ scheme to be piloted for the long-term unemployed; to allow piloting of a ‘personalised conditionality regime’ along the lines of that proposed by Professor Paul Gregg; to direct Employment and Support Allowance (ESA) claimants to undertake specific work-related activity; and to pave the way for the future abolition of Income Support and the movement of claimants onto either Jobseeker’s Allowance (JSA) or ESA. Other measures aimed at reinforcing obligations to move towards work include new powers to require problem drug users to follow a rehabilitation plan; benefit sanctions for JSA claimants who fail to attend Jobcentre Plus interviews; and the extension of Work-Focused Interviews (WFIs) to people over 60 but under state pension age. Mandatory ‘work for your benefit’ schemes are to be piloted from 2010 for long-term JSA claimants, and for some other JSA claimants at an earlier stage of unemployment, if they are deemed likely to benefit from it. Participants would be required to undertake up to six months full-time work experience. The Government argues that the scheme would help long-term claimants develop work habits and employability, but critics have branded the proposals punitive ‘workfare’, pointing out that there is little evidence from other countries that such schemes are effective in reducing benefit caseloads and getting people back to work. In his report, Realising Potential: A Vision for Personalised Conditionality and Support, Professor Paul Gregg set out a vision for a ‘personalised conditionality and support regime’, under which all working age claimants of out of work benefits would be placed in one of three groups: a ‘Work Ready’ group, where claimants would be subject to similar jobsearch requirements to those currently on JSA; a ‘Progression to Work’ group, who would not be expected to return to work immediately but who would be required to draw up a personalised action plan and undertake activities to help them move towards work; and a ‘No Conditionality’ Group (comprising the current ESA ‘support group’ and certain other categories) who would not be subject to any conditionality requirements to receive their benefit. The Bill includes provisions to enable the ‘Progression to Work’ approach to be piloted for lone parents and partners with younger children. To date there has been little detailed comment about the ‘personalised conditionality’ model, but some organisations have argued that parents with younger children should not be compelled to undertake activities against their will, and that benefit sanctions are ineffective in encouraging engagement with services and would merely lead to further hardship. Others have questioned the capacity of Jobcentre Plus and partner organisations to deliver the kind of personalised services and support that are envisaged. The Bill also provides for ESA or JSA claimants who are problem drug users to be directed to comply with a ‘rehabilitation plan’. There are also provisions to require claimants to undergo drug testing in certain circumstances. While closer links between Jobcentre Plus and drug treatment providers have been welcomed, some organisations have voiced serious concerns about the proposals, both in terms of how the arrangements will work in practice and in relation to the potential impact of benefit sanctions on individuals with multiple and/or complex problems. A central theme running through the Bill and the preceding White and Green Papers is the need for an increasing focus within the welfare system on benefit claimants’ obligations to seek work or to prepare for work: the White Paper stated that the latest phase in the Government’s reform programme was based on the idea that ‘virtually everyone should be required to take up the support that we know helps people to overcome barriers to work’. This links in with the Government’s long-term aspiration to reach an employment rate of 80 per cent. The White Paper argued that the worsening economic situation strengthened the case for further welfare reform, but some commentators have questioned whether, in the light of rapidly worsening labour market conditions, it is sensible or appropriate to expand conditionality to new groups and to intensify the regime for existing jobseekers. The Bill also includes provisions to enable benefit sanctions to be imposed following a single conviction, penalty or caution for benefit fraud, and for a new sanction for JSA claimants convicted or cautioned for violence against Jobcentre staff or staff working for contracted providers. Part 1 also includes, in addition to provisions relating to conditionality, measures to tighten up the National Insurance contribution conditions for contribution-based JSA and contributory ESA; and provision to abolish Adult Dependency Increases (ADIs) for Carer’s Allowance and Maternity Allowance. Further provisions in Part 1 of the Bill relate to the discretionary Social Fund. At the beginning of December 2008 the Department for Work and Pensions published a consultation document, The Social Fund: A new approach, which sought views on, among other things, allowing credit unions or similar third sector organisations to take over provision for credit to Social Fund users in their areas, under contract.
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