‘Poverty Punishment’ Overkill: The deliberate creation of destitution through benefit sanctions

David Webster, University of Glasgow

Hayley Bennett has already written about the short-sightedness of ‘poverty punishment’ tools in Active Labour Market Policies designed to push people into work. The harshest of these is the withdrawal of benefits through ‘sanctions’. In the year to March 2015, 587,000 benefit sanctions were imposed in Great Britain on Jobseeker’s Allowance (JSA) claimants, 43,300 on Employment and Support Allowance (ESA) claimants, and 43,800 on lone parent claimants of Income Support. What is particularly striking about today’s British sanctions regime is the way it deliberately drives many claimants into complete destitution, thus damaging their health, in extreme cases causing death, and certainly contributing mightily to the growth of food banks though, rather obviously, not helping them to find a job since their energies are taken up by the struggle to survive.

It did not use to be this way. Up to the late 1980s, disentitled or sanctioned claimants could claim Supplementary Benefit as of right, if they passed the normal test of resources, at the usual rate minus 40%. But in 1988, for sanctioned unemployed claimants with no contributory entitlement, Michael Portillo withdrew the new Income Support and substituted a regime of discretionary ‘hardship payments’, which have to be separately applied for. This was extended to contribution-based Jobseeker’s Allowance claimants in 1996 by Portillo and Peter Lilley, and then to Employment and Support Allowance claimants in the ‘work related activity group’ by Iain Duncan Smith in 2012. In 1996, the rule was introduced that ‘non-vulnerable’ claimants (arbitrarily defined) could not even apply for hardship payments for the first two weeks of a sanction or disallowance. The official DWP Decision Makers’ Guide acknowledges that the two week wait will often damage the claimant’s health (para. 35099). The criteria for ‘hardship’ are specific to the sanctions regime and are particularly harsh – for instance, a person with cash in hand equal to their ‘applicable amount’ will be refused even if the money is owed to a payday lender (DMG para. 35198). And as with any discretionary benefit, the complicated application process, lack of information given to claimants, and scope for bullying by junior officials mean that many claimants never even apply for the ‘hardship payments’ they ought to receive. The opaqueness of the system has been increased by the absence since 2005 of published statistics on hardship payments, other than a Freedom of Information response in 2013, and a Parliamentary Answer of 21 January 2015. Nevertheless we know that in 2011/12, when there were 705,000 JSA sanctions, there were only 64,000 hardship payment awards, indicating that, allowing for repeated sanctions on some individuals, little over one in ten of sanctioned claimants got a hardship payment. A Parliamentary Answer on 6 March 2015 promised that more information would be published in May 2015, but to date nothing has appeared.

Universal Credit introduces further changes to ‘hardship payments’. In particular, it makes them repayable, which given the rule that repayments are made at the rate of 40% of benefits paid, means in effect that the duration of sanctions becomes three and a half times the stated length. And under UC, all claimants have to demonstrate seven days’ compliance with benefit conditions before they can apply for hardship payments.

The public have been brainwashed into intolerant attitudes to unemployed people. For instance, YouGov found in March 2011, at the height of the recent severe recession, that only 20% of the population thought the main reason why some people are unemployed for long periods was lack of jobs! Despite this, support for cutting off all the benefits of claimants not complying with conditions, regardless of what hardship it causes, was fairly limited, at 21% in the UK and 14% in Scotland. More people (26%) thought they should lose none or a small amount, with the largest group (49%) thinking they should lose a large amount, but keep enough to cover their basic needs.

In spite of this relative lack of public support for making people destitute, the Portillo/Lilley regime has remained in place for almost two decades without serious challenge. The only government review, by Professor Paul Gregg in 2008, commented that sanctions should not cause ‘excessive hardship’ (undefined) but did not actually consider any evidence on the question whether they do.

This year, at last, has seen some heavyweight criticism. The House of Commons Work and Pensions Committee report on Benefit Sanctions Policy beyond the Oakley Review in March 2015 recommended that the two-week wait should be abolished and that where a claimant is vulnerable or has children, the DWP itself should initiate the hardship payment process. It was also highly critical of the lack of published information about hardship payments and called for at least annual data on numbers of hardship payment applications, numbers of awards, and numbers of those awards made from day one of a sanction.

These are modest reforms but they would relieve a disproportionate amount of misery and damage for claimants, and stress on the public and voluntary services who have to cope with the consequences of the destitution so casually created by the sanctions regime. The government’s response to the Work and Pensions Committee report, long delayed, has been promised for this month (October 2015). Let us hope that when it comes it will face up to at least this intolerable aspect of the ‘poverty punishment’ machine.

Dr David Webster is an Honorary Senior Research Fellow in Urban Studies, University of Glasgow. His papers on benefit sanctions are available at www.cpag.org.uk/david-webster and http://www.gla.ac.uk/schools/socialpolitical/research/urbanstudies/projects/ukbenefitdisallowances/