Law Centre (NI) briefing

April 2010

This briefing aims to provide a clause by clause commentary on the NI Welfare Reform Bill highlighting particular areas of concern as identified by Law Centre (NI). 

 Part 1 – Social Security

1          Schemes for assisting persons to obtain employment: “work for your benefit” schemes etc.

The Bill provides the process to establish a ‘Work for Your Benefit’ scheme.  In effect, claimants who reach the end of their flexible new deal programme will be expected to undertake up to six months benefit while in work.  The government has characterised this as mandatory unpaid work experience rather than workfare.  In practice, the rate paid is not a wage and is effectively an hourly rate of £1.87 (based on a 35 hour week at current JSA rates for adults aged 25 or over).  The Bill’s explanatory memorandum suggests that some claimants will be exempt from the scheme (for example lone parents with children under seven years of age).  The Bill also provides for the scheme to be piloted though no further primary legislation will be required for the scheme to be rolled out across the UK. 

 Comment

Law Centre (NI) would wish to see considerably more detail about any such scheme before being able to offer a definitive view for example, we have no sense of the quality and type of work that will be offered.  Nonetheless, we have reservations about such a scheme applying to lone parents with children over seven without childcare provision and payments being guaranteed.  We are concerned by the possibilities of job displacement as a result of this scheme and the possibility of lone parents and others having to leave existing training schemes to undertake such work.  We welcome the statement made by DSD in its Completed EQIA[1] that the ‘Work for Your Benefit’ programme will only be considered for Northern Ireland following a full evaluation of the pilot exercise in Great Britain and will be subject to the availability of resources.  We remain concerned that as with many of the proposals in the Bill pilots will be running in England only, therefore the evaluation of these pilots will be based on a totally different infra-structure to that in Northern Ireland.  We query how pilots in England can be properly evaluated for potential impact in Northern Ireland and would recommend that pilots are also run in Northern Ireland prior to any plans to roll out the changes nationally.

 2          Work-related activity: income support claimants and partners of claimants

This clause of the Bill introduces powers so that a person in receipt of income support (IS), or the partner of a person receiving IS, income-based JSA or income related employment and support allowance (ESA), must undertake work-related activity as a condition of continuing to receive the full amount of benefit.  It includes powers to extend such arrangement to lone parents with children aged three years of age or older.  In effect the powers include that if work related activity is not undertaken then a benefit sanction can be applied to the claimant

 The Bill also extends the powers of the Department to authorise ‘contracted out’ suppliers to carry out a number of his functions.  These include issuing action plans and directions, as well as revising and superseding decisions made under relevant sections.  The Bill stops short of giving these ‘suppliers’ powers to make decisions about whether a claimant has failed to comply with a requirement to undertake work related activity, whether he/she had good cause for failure to comply or whether a sanction should be imposed.

 Comment

Work Related Activity is defined loosely in the Bill as ‘activity which makes it more likely that the person will obtain or remain in work or be able to do so’. Claimants who do not participate in work related activity will receive a benefit sanction.  The legislation builds on the recommendations made in the conditionality review by Paul Gregg to create a ‘progression to work’ group of claimants.  This is not a new concept, current ESA claimants who receive the ‘work related activity’ component receive an additional premium of £24 above the Jobseeker’s Allowance rate, for participating in a series of Work Focused Interviews. It is of note that the Bill offers no additional premium for lone parents in receipt of Income Support who take part in work related activity.  The Bill instead imposes a range of sanctions on lone parents if he/she does not undertake sufficient work related activity. It is disappointing that the proposals in the Bill appear to have moved away from the Gregg report approach of tailoring support to the individual needs and circumstances of lone parents to one where ‘one size fits all.’

 We are also concerned by the proposals to extend the powers of the Department to authorise ‘contracted out’ suppliers to carry out a number of his functions.  This is likely to be used if contracts for delivering work related training programmes are contracted out to the voluntary sector or the private sector however; in practice it tends to be the latter.  This raises the issue of a potential conflict of interest if suppliers receive payments for results which may result in contractors ‘cherry picking’ claimants and seeking to discharge more difficult or demanding claimants who need more work and support.

This clause also refers to ‘good cause for failure to comply with regulations’ we provide detailed analysis of this below (clause 24 Good cause for failure to comply with regulations etc.).

 3          Lone Parents

The Bill builds on existing Government initiatives to increase the obligation for lone parents with older children to look for work.  Under the Bill lone parents will be required to undertake differing levels of activity, depending on the age of their youngest child. Where the child is aged; under one, no activity will be required; over one but under three, the parent will be required to attend a work focused interview at regular intervals; three to under seven, the parent will be required to undertake work-related activity.  Section 3(4) also contains provision that allows lone parents receiving employment and support allowance to restrict the hours they are required to undertake work-related activity. These powers will be used to enable them to restrict the activities they will undertake to their child’s hours of schooling or formal childcare.

 Comment

We are very concerned by the proposals to require lone parents with children aged under seven years of age to actively seek work as a condition of JSA.  While we support a policy of positively encouraging lone parent into paid work at an appropriate time efforts to move lone parents back to work should be through measures tailored to support and encourage lone parents rather than through sanctions. 

 We foresee a number of difficulties in introducing legislative powers for this purpose in Northern Ireland.  The childcare infra structure in Northern Ireland required to underpin these proposals is not in place and there is no lead Department responsible for developing a childcare strategy and appropriate provision.  Without this infra structure the clauses contained in the Bill will essentially be unworkable.  It is not appropriate to simply transfer these provisions from the Westminster Act to Northern Ireland as the infra structure to implement the proposals while available in Great Britain is not available in Northern Ireland.  Arguments of parity must take into account the equality of opportunity, access and support available within different states.

Further, with high unemployment the current economic climate will make it difficult for lone parents to secure jobs that allow them to combine their work and family life.  Finally, there is a potentially adverse impact on child poverty if lone parents are exposed to the risk of benefit sanctions.

4          Entitlement to jobseekers allowance without seeking employment etc.

The Bill proposes to extend entitlement to income-based JSA for different categories of claimants, including people currently claiming IS.  It establishes a new entitlement for claimants who are not required to meet job seeking conditions but who do meet the other basic conditions of entitlement.  Under this approach income-based JSA will be extended to groups of claimants who currently qualify for income support, including lone parents with young children.

Comment

LCNI recommend, however, that legislation should not be enacted to take these powers until detailed proposals are ready for consultation.  In the White Paper the Government accepted the Gregg Report’s recommendation that it is inappropriate to expect those in receipt of carers benefit to engage in back to work activities.  This does not seem to have been translated directly into the Bill but we hope this will be dealt with in regulations. 

5          Couples where at least one member capable of work

The Bill proposes other changes which will affect couples claiming benefit.  In particular the right of a sick or disabled person to claim ESA for the couple when the partner could qualify for JSA is removed.  In addition, the Bill makes arrangements to allow the partner of claimants of Income Support, JSA and ESA to be required to undertake work-related activity or be subject to a sanction.  These proposals will initially be piloted and then evaluated in Great Britain.

Comment

In our view, there are a multiplicity of circumstances facing partners living with a sick or disabled person and while we accept the value of encouraging partners to seek work where appropriate, a sanctions driven approach is neither helpful nor beneficial.  Many people can be playing a role as a carer of someone without getting Carer’s Allowance.  The danger once again is that a ‘one size fits all’ approach is taken to the detriment of claimants providing considerable care and support to a partner.

This clause intends to remove entitlement to IS and income-related ESA for couples where one member is capable of work.  For couples affected, the only route to income-related financial support will be through income-based JSA and the member of the couple who is capable of work will be required to fulfill job seeking requirements.  As with many aspects of the Bill the actual detail of the proposals will be prescribed in regulations, which are not yet available.  These regulations will include details of when a member of a couple will not be treated as capable of work, for example, someone receiving ESA or carer’s allowance.

6          Statutory sick pay and employment support allowance

This clause amends the Welfare Reform Act (Northern Ireland) 2007 which prevented those entitled to statutory sick pay from eligibility for ESA.  It is proposed to remove this exclusion to enable people in prescribed circumstances to claim income-related ESA whilst in receipt of statutory sick pay.  This clause includes a regulation-making power to allow individuals in receipt of statutory sick pay to claim income-related ESA, instead of IS.   This provision is necessary due to the plans within the Bill to abolish IS.

Comment

We comment further on the plans to abolish IS below (clause 9 Abolition of income support).

7          Transitional provision relating to sections 4 to 6

This clause allows for the transition of claimants from IS to ESA or JSA as a result of the provisions in clauses 4 to 6.  The clause includes provisions to stop IS and ESA awards where appropriate and allows for a transitional allowance to be paid as prescribed in regulations. 

8          Assembly procedure: regulations imposing work-related activity requirements on lone parents of children under 7

This clause allows for the introduction of regulations to govern imposing work-related activity on lone parents of children under 7 and sets out Assembly procedures for scrutiny. 

Comment

See our comments under clause 3.  Again Law Centre NI would urge against the taking of such powers without providing any details as to how this might work in practice.

9          Abolition of income support

The Bill proposes the abolition of income support and this clause provides for the repeal of its associated references and any transitional protection necessary.

Comment

We do not support this clause.  We welcome the principle of trying to simplify the out-of-work benefit system. However, we are concerned that the proposal to simplify the system by moving all claimants to Jobseeker’s Allowance and Employment and Support Allowance is simplistic and infeasible. We remain unconvinced that these two forms of benefits alone will be able to offer the flexibility required in more complex circumstances, such as when a claimant qualifies for support under more than one category e.g. a lone parent with caring responsibilities for a disabled child.  Law Centre supports the retention of Income Support until detailed alternatives are set out and consulted on.  Only after this should such a change to primary legislation be brought forward.  It is not appropriate to take such a wide ranging power without providing any details of how it might be applied. 

10        Power to direct claimant to undertake specific work-related activity

This clause confers further powers on the Department to specify a work-related activity which an ESA claimant in the work-related activity group must undertake to meet the requirements of the claim. This includes powers to direct that a particular activity is not to be counted as work-related activity, as well as directing that a specific activity is the only activity which can, in a person’s case, be regarded as work-related activity. Any such direction must be reasonable having regard to the person’s circumstances and recorded in their action plan, with any failure to comply being sanctionable.

11        Conditions for contributory jobseeker’s allowance

12        Conditions for contributory employment and support allowance

Contribution conditions for contributory ESA and JSA are to be tightened.  From 2010, claimants will have to have paid a minimum of 26 weeks contributions in each of the last two tax years before the year of the claim. 

Comment

In effect, six months work will be needed to meet the requirement regardless of the amount of national insurance contribution paid.  This will replace the existing contribution condition which relies on the payment of contributions up to a certain value in each of the tax years.  This will make it more difficult for people working seasonally or for other short periods at a time to qualify for benefit[2] and is a further erosion of the national insurance contributory principle and as such this is a retrograde step.  This mirrors provision in the Welfare Reform Act 2009 in Britain.

13        Mobility component

The Bill amends Section 73 of the Social Security Contributions and Benefits Act 1992 which governs the mobility component of disability living allowance to set out a new category of entitlement to the higher rate mobility component for people who are severely visually impaired as prescribed in regulations.

Comment

We welcome this change in the Bill which we understand will be implemented in April 2011.  Work is being done in Britain to set out exactly which groups of visually impaired people will qualify. 

14        Maternity allowance and carer’s allowance

The Bill seeks to abolish dependant additions for Maternity Allowance and Carer’s Allowance.  There will be transitional protection for those receiving the additions in April 2010 and for Carer’s Allowance this will end in April 2020 if entitlement has not already ended. 

Comment

We do not think that carers or those on maternity leave who have not worked sufficiently long enough to claim statutory maternity pay should be penalised where they have a partner who is also not working. 

15        Community care grants relating to specified goods or services

16        Community care grants: reviews and information

These clauses make provision for community care grant payments to be made for specified goods or services to an external supplier rather than directly to the applicant. It is assumed that these provisions relate primarily to the supply of white goods and furniture at discount rates including services such as delivery and installation.  There is no right to seek a review against the decision for payments to be made to a specific supplier.

Comment

We are concerned by the proposals to reduce choice for individuals and enforce specification of suppliers by DSD.  We believe it is important to maintain a degree of flexibility in the allocation of community care grants to allow for the different circumstances and needs of applicants.  We are concerned that these changes will increase the stigma associated with community care grants as claimants will be identified by suppliers as receiving goods through a community care grant.  This impacts on a claimant’s independence and could have an adverse impact upon peoples willingness to claim.  There is also concern regarding the discretion placed upon the third party suppliers regarding the cost or quality of goods supplied through a direct payment of a community care grant.  Further consideration should be given to the potential impact of these clauses prior to introduction.

17        Regulations relating to information: Assembly control

This clause amends section 166 of the Social Security Administration Act 1992 to provide that regulations about the unauthorised disclosure of information in relation to external provider social loans or community care grants are subject to the affirmative procedure where the regulations create new offences or increase penalties.

18        Payments on account

This clause broadens the range of situations in which a payment on account can be made before an award of benefit has been made. It enables payments to be made on the basis of need rather than only in situations where it is impracticable to make or determine a claim or pay benefit, and is intended to provide the Department with more flexibility to address short-term hardship.  An advance of 75% of weekly benefit will be made to those unable to wait until normal benefit payments are made.

19        Loss of benefit provisions

This clause introduces benefit sanctions for four weeks for anyone who following a first conviction, caution or administrative penalty for a benefit fraud offence will incur a four week sanction (or loss) of their benefit payments.

Comment

We do not see any need for further benefit sanctions to combat fraud. We note the Department’s figures shows that benefit fraud is at the lowest ever recorded.[3] The figures for customer fraud in Northern Ireland are lower than those cited in the Green Paper: £18.1 million (0.5% of social security benefits).[4] We therefore would query the cost-effectiveness of introducing a further sanctions regime in light of the apparent success of the current system.  We also note that this sanction is on top of recovering the overpayment and in the case of an administrative penalty a 30% extra payment on top of recovery of other payment.  The sanctions applied particularly to those receiving a caution or administrative penalty are disproportionate. 

20        Jobseeker’s allowance: sanction for violent conduct etc. in         connection with claim

The Bill also makes provision for a benefit sanction of one week for JSA claimants who are convicted of or cautioned for violent or threatening behaviour towards staff or contracted out staff.

Comment

We do not support the proposal to use sanctions in response to aggressive claimants. Assault is a criminal matter and should be dealt with by the appropriate law enforcement bodies and not through benefit sanctions.  Taxation penalties are not applied to people who are aggressive in tax offices.  We cannot see why benefit claimants are singled out for this approach. 

21        Repeal of sections 53 to 57 of the Child Support, Pensions and Social Security Act (Northern Ireland) 2000

This brings to an end a pilot scheme which has been in operation in Derbyshire, Hertfordshire, Teesside and West Midlands since October 2001. In these areas benefit sanctions have been applied to offenders found to be in breach of specified community orders. The pilot scheme applies to offenders in the pilot areas who are aged between 18 and 59 and receiving jobseeker’s allowance, income support or certain training allowances.

Comment

We note that that evaluation results showed that enforcing benefit sanctions was not effective.

22        Period for which pilot scheme have effect etc.

This clause extends the period of time that pilot schemes can run under JSA and ESA from 12 and 24 months respectively to a maximum of 36 months to create consistency. 

23        Exemption from jobseeking conditions for victims of domestic violence

The Bill inserts a new provision relating to those who have been victims of, or threatened with, domestic violence into Schedule 1 to the Jobseekers Act 1995. The Department is required to exercise existing regulation-making powers to provide that victims of domestic violence will, for a period of 13 weeks, be able to start or continue a claim to jobseeker’s allowance without: being available for employment; having entered into a jobseeker’s agreement; or actively seeking employment.

Comment

This is a concession made during the passage of the Welfare Reform Act 2009 in Britain.  We welcome the recognition by the Government of the extreme stress and difficulty faced by victims of domestic violence and the inclusion of a 13 week ‘grace’ period for such victims.  This is a positive move although we would urge for the ability for continued discretion in such cases beyond the agreed 13 week period as for some victim of domestic violence 13 weeks will not be a sufficient time period for them to be fit to engage in work or work seeking activity. Consideration will need to be given to the ability of Personal Adviser’s to make discretionary decisions in such cases and an alternate system may need to be considered that does not rely on the use of discretion in such sensitive cases.

24        Good cause for failure to comply with regulations etc.

This section provides that where regulation-making powers in the Social Security Administration (NI) Act 1992, the Jobseekers (NI) Order 1995 and the Welfare Reform Act (NI) 2007 enable circumstances to be prescribed that constitute good cause for failing to undertake mandatory activities (and just cause for leaving employment), the regulations must always include the availability of childcare and the claimant’s physical or mental health or condition in the list of circumstances that must be taken into account.

Comment

We welcome the acknowledgement of the difficulty faced by those with physical or mental health conditions in undertaking mandatory activities.  It is important that claimants with such conditions are treated with an element of discretion to allow for times of ill health.  We recommend however that stronger safeguards need to be put in place within the legislation to ensure that personal advisers implementing the Bill are not given full discretion to determine whether a claimant has ‘good cause’ for failure to comply with regulations particularly in regards to claimant with mental health and/or learning difficulties.  A claimant’s mental health and ability to engage in the return to work process may be highly complex and sensitive and should not be left to the discretion of a frontline staff worker without the relevant expertise or understanding of a claimant’s condition.

This clause also helps to further confirm the importance of the availability of childcare to a number of the proposals within the Bill.  We reiterate our concerns that Northern Ireland does not have a childcare infra structure in place and the lack of a childcare strategy for Northern Ireland continues to impact upon the introduction of welfare reform in Northern Ireland.  Public bodies in Northern Ireland are under no obligation to assess and meet local childcare needs as is required by the Childcare Act 2006 in England and Wales.  If the infra structure to support the introduction of many of the clauses within the Bill is not in place we would urge the Assembly to first work on developing the infra structure required to support and enable the enactment of the Bill rather than passing the Bill as it stands. 

25        Jobseekers’ agreements and action plans: well-being of children

The Bill introduces the requirement that the well-being of the child should be taken into account when agreeing the activities that a parent will undertake as part of a jobseeker’s agreement in order to help the parent move closer to or into work. It also makes similar provision for recipients of employment and support allowance when an action plan is prepared.

Comment

We welcome the inclusion of this clause.  The clause highlights the contradiction within the Bill namely to move more people (more parents) into work and to sanction those who fail to comply.  The new arrangements will affect lone parents with young children and those with health problems as a result of more people failing the more stringent Work Capabilities Assessment as part of ESA entitlement.  The continued pressure on lone parents to move back into work faster highlights that this will not necessarily meet the well-being of children.  Clarification is required on how the well-being of the child is to be taken into account in practical terms when applying the more rigorous work related conditions applied to benefits. 

26        Contracting out functions under Jobseekers (Northern Ireland) Order 1995

The Bill allows for the contracting out to ‘authorised persons’ of certain functions related to JSA claims, such as conducting interviews, provision of documents, specifying meeting times and places and entering into, or varying, jobseeker’s agreements. The clause states that some types of decisions, such as failure to comply with requirements, good cause for failure and JSA reductions cannot be contracted out.

Comment

Law Centre (NI) would welcome further information on who would be deemed an ‘authorised person’ under this clause and are concerned that the proposal of a new ‘tier’ into the back-to-work system i.e. that of the private and third sectors through a means of contracting and sub-contracting could weaken the link between the state and the individual. Introducing a chain of responsibilities is likely to lead to a dilution of the state’s responsibilities towards claimants and could weaken public faith in the system.  We have serious reservations not least that private contractors may feel obliged to meet their contractual obligations which are dependent on results by getting tough on certain groups of claimants.

27        Attendance in connection with jobseeker’s allowance: sanctions

This clause allows JSA payments to be suspended if a JSA claimant fails to attend a mandatory appointment and makes contact with Jobcentre Plus within five working days without showing good cause for the failure to attend.  Initially JSA payments will be suspended for a fixed period of at least one and not more than two weeks. For second and subsequent failures, a fixed sanction of two weeks will apply.

Comment

It is concerning that despite research by the Department for Work and Pensions, on the Pathway to Work pilots, which found that there is little evidence that the imposition of sanctions resulted in increasing interest in, or movement towards work[5] the Bill proposes a range of sanctions on those who do not fulfill their work activity obligations.  In addition there are a myriad of reasons why a person misses an appointment and it takes more than five days to explain why (e.g a family emergency).  This will result in some particularly harsh cases, for example if a family member is rushed to hospital in an emergency and is seriously ill resulting in the claimant taking a week to explain why an appointment is missed then a sanction will still be applied. 

The proposed increased use of sanctions could have substantial cost implications given the potential associated rise in appeals. The Department should produce its evidence that demonstrates that sanctions are effective especially in light of the report of the Social Security Advisory Committee, which questions the efficacy of sanctions.[6] An increased use of sanctions is likely to have substantial adverse implications for dependants as well as claimants. Indeed, this approach is inconsistent with the Office of the First Minister and Deputy First Minister (OFMDFM)’s review on child poverty, which recognises the positive contribution that benefits can make to reducing child poverty and specifically calls for a Benefit Uptake Strategy.[7] These proposals would result in benefit deprivation, not uptake.

The imposition of conditionality and sanctions as part of the new benefit scheme may also have a negative effect on the relationship between a claimant and his/her Personal Adviser, which the Pathways to Work pilot has shown is pivotal to its success.  Previous Department research found that Personal Advisers “felt that allowing customers to move forwards at their own pace, and emphasising the voluntary nature of participation, were critical to gaining customer commitment and co-operation.”[8] 

The government recognises that job offers ‘may be more limited’ for disabled people and people with health conditions.[9] Given this acknowledgement it seems inherently unfair that disabled people will be subject to the same conditionality principles. We oppose increased sanctions in all instances; however, we particularly oppose sanctions against disabled individuals while there is no parity in terms of job offers for disabled/non disabled claimants.

28        Social security information and employment or training information

This clause expands the scope of data sharing powers including the use of employment and training information.

29        Persons under pensionable age to take part in work-focused interviews etc.

In line with the equalisation of access to state pensions this clause increases the age that a woman claiming specified benefits is required to attend a work focused interview.  People aged 60 or over on working age benefits will get additional back to work support offered by way of a work focused interview.   

30        Minor amendments

This clause contains minor amendments, including scrapping Christmas bonuses for income related ESA  claimants, use of the term ‘qualifying young person’ for those over 16 years of age to ensure that dependant additions can be preserved in certain benefits where a child or young person is still in education and ensuring that a person on incapacity benefit can get an increase for only one adult dependant and that occupational pensions are treated as earnings.  

Conclusion

The Law Centre believes it is appropriate to tailor a Northern Ireland approach to issues raised in Welfare Reform Act 2009 and the Bill in its current form does not adequately do this. For these reasons, we would recommend that the Bill is not adopted in Northern Ireland without further consultation and consideration of the Northern Ireland context and that consideration is given to a modified legislative approach in Northern Ireland. 

[1] DSD, Welfare Reform Bill (Northern Ireland) 2010, Completed Equality Impact Assessment, Dec 2009

[2] Frontline, Welfare Reform: raising Expectations or setting unrealistic goals?, Winter 2008, pg 16

[3] Chapter 2.23

[4] NIAO Social Security Benefit Fraud and Error 2008 NIA 73/07-08 section 1.1.

[5] Department of Work and Pensions, Pathways to Work: Findings from the final cohort in a qualitative longitudinal panel of incapacity benefit recipients, October 2006

[6] Social Security Advisory Committee Report No 19 Sanctions in the Benefit System: Evidence Review of JSA, IS and IB sanctions. This report highlights the inconclusive evidence as to the success of sanctions and puts forward a series of recommendations, which do not appear to have been taken into account.

[7] Committee for OFMDFM Final report on the Committee’s inquiry into child poverty in Northern Ireland states that ‘the delivery systems for benefits can have a particularly significant impact on levels of severe poverty, as benefit levels are in fact set above the threshold for severe poverty. The Committee is therefore recommending that the Executive should develop a cross-Departmental Benefit Uptake Strategy to assist low income families to obtain their full benefit entitlement’.

[8] Tim Knight, Sarah Dickens, Martin Mitchell and Kandy Woodfield for the Department of Work and Pensions, Incapacity Benefit Reforms: Personal Adviser Roles and Practices – Qualitative Research, 2005.

[9] Chapter 3.34. This acknowledgement is reflected in statistics on employment in Northern Ireland: only 32% of people with disabilities are in employment compared to 79% of those without disabilities.  Statistics compiled by Disability Action.