A Law Centre (NI) Briefing
March 2009

1.   Introduction

Raising Expectations and Increasing Support: Reforming Welfare for the Future (the White Paper) was published in December 2008 and sets out the Government’s proposals for the continuing reform of the welfare state.  Following on from the White Paper the Welfare Reform Bill (the Bill) was introduced to Parliament on 14 January 2009.  The White Paper and the resulting Bill come as the culmination of considerable work by the Government in the area of welfare reform.  This work started with the publication of a Green Paper in the summer of 2009 and follows the recent introduction of the employment and support allowance in October 2008 and new obligations for lone parents with older children in November 2008.

The Bill also fulfils the commitment made in the White Paper Joint Birth Registration: Recording Responsibility to legislate in order to make joint birth registration by unmarried couples the normal, default position, thereby enabling unmarried fathers to have their names entered on the birth register and to gain parental responsibility by this route.

The Bill provides a basic framework with little legislative detail which will be set out in regulations which have yet to be published despite the Bills progress through Parliament in Westminster.  Moreover, some parts of the White Paper are not reflected in the Bill and we understand will be introduced under existing legislative powers.

2.   Summary of Main Proposals

Law Centre (NI) welcomes a number of the principles behind the Government’s package for reform as contained within the White Paper and the subsequent Bill.  However, we have considerable concerns regarding the outworking of some of the proposals and outline these and other recommendations below.

• Abolition of Income Support as part of the move towards a single working age benefit (Para 5.1)
• Contributory conditions for contributory ESA and JSA are to be tightened (Para 5.2)
• Couples with children aged 7 and above will be required to make a joint claim for JSA and both claimants will be required to seek work unless only one partner is able to work. (Para 5.4-5.6)
• The introduction of three categories of benefit claimants; work ready, progressions to work and ‘no conditionality’ (Para 5.3)
• Escalating sanctions as proposed in the Gregg Review (Para 6.1-6.6)
• A review of the Work Capability Assessment Test (Para 7.1)
• Development of a new drug and employment support programme (Para 7.2)
• Piloting a new ‘Work for Your Benefit’ scheme within ESA (Para 7.3)
• Changes to the administration of the Social Fund (Para 7.4)
• The abolishment of dependent additions for Maternity Allowance and Carer’s Allowance (Para 7.5)
• Commitment not to move carers off Income Support (Para 8.1)
• Greater control of the provision of services by people with disabilities (Para 8.2)
• A more open market to delivery of back-to-work services allowing more private companies to provide these services (Para 8.3)

4.   The Northern Ireland Context

4.1  Northern Ireland presents particular circumstances with regards to welfare and arrangements to move people into employment. In Northern Ireland, the approach to social security, training and employment programmes is divided into two government departments: the Department for Social Development (DSD) is responsible for social security benefits and benefit sanctions whereas the Department for Employment and Learning (DEL) is responsible for training and employment programmes. This is in contrast to GB, where both areas are handled through the Department for Work and Pensions (DWP)

4.2  We welcome the recognition within the White Paper that while the Government will continue to work closely with the devolved administration in Northern Ireland to seek to maintain a single system of social security across the UK, the Northern Ireland Executive will consider the most appropriate arrangements for Northern Ireland.

4.3  While the principle of social security parity has dominated the development of social security policy and legislation in Northern Ireland social security remains a transferred matter with separate legislation and administrative arrangements.  While benefit rates are universal across the UK there are significant differences between social security provision which recognise the particular circumstances in Northern Ireland.  The approach towards welfare reform in Northern Ireland can therefore be policy led and should not be slavishly bound to the principle of parity.

4.4  Given the differences outlined above, combined with differences relating to regulations, delivery and administration, the Law Centre believes it is appropriate to tailor a Northern Ireland approach to issues raised in the White Paper. For these reasons, we would recommend that this White Paper 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.

5.   Changes to Benefits

5.1  We welcome the proposals 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. The Law Centre would therefore support the retention of Income Support.

5.2  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.  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 seasonal or for other short periods at a time to qualify for benefit.¹

5.3  The White Paper sets out the Government’s response to Professor Paul Gregg’s report Realising Potential: A Vision for Personalised Conditionality and Support. The report found that more could be done to improve the efficacy of conditionality for benefit claimants and recommended support based on three categories.  The first being the ‘Work Ready’ group who have a rules-based set of requirements similar to the current JSA arrangements of active job seeking and aimed at those able to return to work quickly.  The second group is a ‘Progression to Work’ group aimed at those who cannot immediately look for work but who with time, encouragement and support could eventually return to work. Gregg recommends that this group includes claimants in the Work Related Activity Group for ESA, lone parents and partners with a youngest child aged between one and six years of age. The final group is a ‘No Conditionality’ group for those claimants who are unable to meet any work conditionality requirements so there will be no requirement for any work related activity but support is still available if a claimant wishes. This is aimed at lone parents and partners whose youngest child is under one year old.

5.4  We are very concerned by the proposals within the White Paper 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.

5.5  We foresee a number of difficulties in introducing legislative powers for this purpose in Northern Ireland.  The childcare infrastructure in Northern Ireland required to underpin these proposal is not in place and there is no lead Department responsible for developing a childcare strategy and appropriate provision. Further, with rising unemployment the current economic climate may 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.

5.6  Recent research by the Department for Work and Pensions looked at the long term impact of lone mothers moving into work.² The research concluded that there are considerable material and social benefit for families and children in entering employment.³ Nonetheless, the demands of childcare mean this work is generally part-time, insecure and poorly paid. The research also highlighted the costs in terms of family life and general health and well-being. Tax credits remain essential though the financial benefit of tax credits is mitigated by complexity, unreliability and the prospect of the recovery of overpayments. The lack of childcare also remains a significant barrier to obtaining and maintaining work. This research illustrates the complexities associated with finding and sustaining work for lone parents at a time when the economy was strong. The White Paper and Bill still fail to reflect these complexities. For Northern Ireland the childcare issue is even more relevant and the full blown approach envisaged in the White Paper should not be adopted here until childcare is fully and properly resolved.

5.7  In addition, the Welfare Reform 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. 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.

6.   Sanctions

6.1  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 work⁴ the Bill proposes a range of sanctions on those who do not fulfill their work activity obligations.

6.2  New legislation will be introduced so that it is no longer possible for a JSA claimant to ignore a mandatory appointment without incurring at least one full week’s sanction of their JSA. Subsequent failures will lead to a sanction equal to two weeks’ benefit. There is also a sanction being introduced if a claimant is deemed to be behaving violently towards Jobcentre Plus staff. 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 the benefit sanctions.

6.3  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.⁵ An increased use of sanctions is likely to have substantial adverse implications for dependents 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.⁶ These proposals would result in benefit deprivation, not uptake.

6.4  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.”⁷

6.5  The government recognises that job offers ‘may be more limited’ for disabled people and people with health conditions.⁸ 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.

6.6  A new sanction is introduced under which anyone who commits a benefit fraud offence will incur a four week sanction (or loss) of their benefit payments. We do not see any need for further criminal sanctions to combat fraud. We note the Department’s figures shows that benefit fraud is at the lowest ever recorded.⁹ 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).¹⁰ We therefore would query the necessity for and cost-effectiveness of introducing a further sanctions regime in light of the apparent success of the current system.

7.   Other Key Aspects within the Bill

The White Paper also proposes changes in the following key areas:

7.1  Work Capabilities Assessment

7.1.1 As part of the earlier welfare reforms the Government committed to an overhaul of the Personal Capability Assessment (PCA) from an incapacity based tool for determining eligibility to Incapacity Benefit to a more positive and full assessment of capability to include health related interventions to assist those with a disability to engage in work. The now named Work Capabilities Assessment (WCA) is independently reviewed annually and the White Paper proposes an additional review of how effective the WCA is in identifying the level of disability and health conditions among claimants. This review will include making recommendations for altering the WCA to ensure it takes better account of people’s adaptation to their condition. Interestingly the White Paper actually states that as a result of the changes to the WCA the Government expects a ten per cent increase in disallowances for ESA, therefore, more people with deemed ‘lower levels’ of physical and mental health problems will be expected to claim JSA.

7.2  Drug and Employment Support Programme

7.2.1 A new drug and employment support programme will be developed to provide integrated and personalised support for problem drug users on JSA or ESA. The proposals cover claimants who are currently or recently have a heroin or crack cocaine problem.  Claimants identified as problem drug users will be referred for an initial assessment with a healthcare professional who will determine whether they should be referred to the new programme. During the period on the programme, claimants will receive a Treatment Allowance. This is paid within the existing structures of JSA or ESA, but the conditions of entitlement will be varied and replaced with a more tailored and appropriate set of conditions for supporting recovering drug users. The Bill gives the Secretary of State in Britain the power to ask a claimant on JSA or ESA questions about drug dependency and its impact or finding work. Claimants who refuse to answer these questions can be obliged to undertake a substance related assessment. Anyone refusing assessment can in turn undergo an intimate drug test.  The penalty for refusing to comply with the test or any subsequent rehabilition plan is the loss of benefit for 26 weeks.

7.2.2 The Law Centre is concerned about the proposed approach for indentifying problem drug use for a number of reasons. First, it is felt that the proposed programme is disproportionate given the relatively small numbers of problem drug users within the system.¹¹ This is particularly the case for Northern Ireland; in 2007 there were a total of 257 registered addicts.¹² The costs of implementing the programme are likely to be high, given the anticipated increase in sanctions, appeals, potential criminal proceedings and the likelihood of this approach improving rehabilitation appears slim. We also note, with interest, that the Bill has taken powers to extend this approach to alcohol misuse. Our understanding is that these powers will not be used which begs the question, why take such powers in the first place?

7.3  Work for Your Benefit

7.3.1 The Bill establishes 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 characterized 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 £1.73 (based on a 35 hour week at current JSA rates). 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.

7.3.2 The Law Centre would wish to see considerably more detail about any such scheme before being able to offer a definitive view. 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.

7.4  Social Fund

7.4.1 The Bill contains two proposals regarding the Social Fund. First, it provides the Secretary of State with Powers to outsource the social fund loan scheme to external providers and to pay these providers. Second, it allows the Secretary of State to enter into an agreement with a third party to supply goods and services under the community care grant scheme instead of the claimant receiving the money directly. It is difficult to see which external providers are interested in taking on such a responsibility given the government commitment made in December 2008 to not introduce interest charges on such loans. Our understanding is that, for example, the Credit Union movement is unlikely to be interested in taking on such a role. On the second proposal we note with concern the absence of any recourse to a review through to the independent Social Fund Inspector of any decision to pay a grant to a third party rather than the individual directly. We think this gap should be remedied.

7.5  Dependent Additions

7.5.1 The Bill seeks to abolish dependent 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. This appears to be a purely money saving exercise and a further erosion of the national insurance principle. 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.

8.   Issues for Particular Groups

8.1  Carers

8.1.1 The Government has accepted the Gregg Report’s recommendation that it is inappropriate to expect those in receipt of carer’s benefit to engage in back to work activities. This is a welcome move and it means that carers in receipt of Income Support will not be moved onto JSA until there is a clear and detailed plan that sets out how the benefit system will be reformed over the longer term. This places a clear obligation on Government to review the situation for carers. Additionally, there is a pledge to ensure that proposals for a future system of support makes appropriate provision for carers and fits well with the Department of Health’s (GB) review of the social care and support system currently underway.

8.2  People with Disabilities

8.2.1 Government recognise that the question of choice and control for disabled people extends beyond the fields of social care and health. From 2010, it is intended to run some pilots (described as ‘trailblazers’) in which disabled people will be told how much they are eligible to receive in support and will be able to choose how that money is used to achieve outcomes agreed with the State. Currently there are no plans to run pilots in Northern Ireland. Individuals will be able to receive a direct payment, continue to allow the health and social care trust to arrange their support, or use a mixed approach. There will be no compulsion on disabled people to take state funding as cash – if they wish to continue to receive services commissioned on their behalf then they can do so.

8.2.2 Before commencing the pilots, DWP have committed to consulting widely with disabled people, service providers and other stakeholders to establish the best way to the achieve the objectives of choice and control whilst also safeguarding and improving services. They also have committed to local and national consultation ahead of the trailblazers to investigate which sources of support could be included.

8.2.3 We fully support the move to double the funding for the Access to Work scheme. The scheme is extremely effective in increasing accessibility to the labour market, thus making a tangible difference to people with disabilities.¹³ For these reasons, we would urge an even greater government investment in Access to Work and we advise extending the scope of Access to Work to include disabled people undertaking work placements or voluntary work, which may later lead to paid employment.

8.2.4 Despite the success of Access to Work, disabled people still face substantial barriers to employment. Statistics compiled by Disability Action in Northern Ireland show that only 32% of people with disabilities are in employment compared to 79% of those without disabilities. Mencap have expressed concern that the proposed reforms do not go far enough to provide ‘appropriate specialist support for people with a learning disability’ and without the ongoing funding this requires, people with a learning disability will continue to be the disabled group most excluded from the work force.¹⁴

8.2.5 The direct payments scheme in Northern Ireland does not have a wide take up and while there is some independent support for individuals using direct payments this support, though welcome, is limited in scope. We would need to see more detail about what programmes will be used to extend direct payment arrangements and the support available to users before being able to comment further.

8.3  People with Mental Ill Health

8.3.1 The Government, through the welfare reform process, has demonstrated an awareness of the needs of those with mental health issues. We remain concerned regarding a number of the proposals within the Bill namely increasing conditionality and sanctions and the role of employers. Under the new proposals people with mental health issues will be one of the largest groups affected by the welfare reform agenda. Those with mental health issues are often keen and willing to return to work but lack the support to be able to achieve this goal. We are concerned that sufficient thought has not been given to the particular needs of people with mental health issues in the drafting of the Bill and the proposals for required participation.

8.3.2 The concept of compulsory participation shows little understanding of the fluctuating and, at times, unpredictable nature of some mental health problems. Increasing conditionality and sanctions are unlikely to be effective in enabling people with experience of mental distress to take steps towards employment at the most appropriate time and pace for them. As pointed out by four leading mental health organisations ‘taking too punitive an approach to those with these problems [mental health problems] will seriously undermine the Government’s ambition to reduce the overall number of long term unemployed.’¹⁵ Safeguards need to be included within the Bill to ensure that people will not be adversely affected by not securing work due to mental ill health.

8.3.3 The Bill also proposes to give personal advisers increased flexibility and powers to support people, namely people with disabilities and the long-term unemployed back to work. It is vital that Personal Advisers working with people with mental health issues have a good understanding of the particular difficulties they may face and of the possible impact on their health of enforced participation in job search and training schemes. Consideration needs to be given to the allocation of resources for training for personal advisers and this should be informed and/or delivered by those with mental health issues.

8.3.4 The move to encourage and support more people to return to work is welcome. We are concerned, however, by the practical issues faced by many claimants with mental health issues when it comes to securing and maintaining employment as considerable prejudice and discrimination still exists in relation to mental health within the workplace.

8.3.5 The White Paper proposes a more open market to delivery of back-to-work services allowing more private companies to provide these services.  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.

8.3.6 A recent survey by Mind, however, showed most members preferred voluntary sector providers with 71 percent finding them helpful, compared to 44 per cent for DWP services and only 28 per cent for private companies.¹⁶ The Government has not adequately addressed the potential impact of these proposals for people with mental health problems. This raises concerns that people will be pushed into ill-suited jobs, which may only serve to exacerbate existing mental health problems and may ultimately work against people retaining long-term employment. The experience to date in Britain is that contracts have gone to private sector providers. Once again we would wish to see more detail of what DSD would have in mind for Northern Ireland before being able to comment further.

8.3.7 The White Paper is also very light on employer responsibilities and does not put enough on emphasis on the vital role of retention. Employers are central to achieving an increase in the rate of employment of people with mental health problems. The Government needs to take further action to reduce the stigma and discrimination faced by people with mental health issues, across all areas but particularly in the area of employment where prejudice is evident.

9.   Where To Next

The White Paper is broad and wide-ranging. The Department of Social Development decided not to adopt the Green Paper in 2007 and must now consider whether, and if so, to what extent it will adopt the White Paper proposals. While the Department is unlikely to move away from the major welfare reform proposals, it is possible that a different approach may be taken to conditionality, contracting out of welfare to work programmes and a number of the other initiatives heralded within the White Paper and contained in the Welfare Reform Bill for Britain. We think the Department should set out its own arrangements and proposals which are tailored to Northern Ireland’s needs so that a full debate can occur on the practical consequences of any proposal.