Reform of the Benefits System

The Welfare Green Paper launched on Monday 21st July by the Government sets out a range of options which will make major changes to the benefits system in a bid to get people off benefits and into work.  The paper makes it clear that there will be “no right to a life on benefits” for anyone capable of working.  The objective is an 80% employment rate which will be achieved through a “something for something” approach whereby people will be helped to find and retain work through support more personalised to individual need but, in return, those who are able will be expected to take a job if it is available.

A key element of the green paper is to abolish both Incapacity Benefit and Income Support.  These benefits will be replaced by a simplified system of two benefits – Employment Support Allowance (ESA) which will be regarded as a temporary benefit for all but the most disabled people and Jobseekers’ Allowance for those who are fit to work.

ESA will be introduced in October 2008 for new claimants only.  Existing Incapacity Benefit claimants will be moved onto ESA between 2009 and 2013.  A revised medical test called the Work Capability Assessment (WCA) will be used to assess capability for work.  Only the most severely disabled people or those with full-time caring responsibilities are likely to be able to remain on ESA long-term and would not be required to look for work.  Everyone else will be expected to take active steps towards employment and to take suitable jobs.

The paper proposes that “the longer people claim benefits the more they will be expected to do”.  After 12 months on JSA the long-term unemployed will be required to carry out four weeks of “full-time activity”.  For those still on JSA after two years this would increase and they will be required to work full-time in the community.

Drug users are also targeted in the paper, so in return for claiming state benefits they will be required to declare their drug problem and seek treatment for their addiction.

The emphasis is on conditionality with a very clear sanction of withdrawal of benefits if people refuse to take steps to get back into work or refuse to take a job.

These changes are likely to have a significant impact in Northern Ireland as there are currently 112,000 Incapacity Benefit claimants here (10.39% of the working population) compared to Great Britain where there are 2.6 million claimants (7% of the working population).  74% of Incapacity Benefit claimants have been on the benefit for longer than two years with 43.3% of all Incapacity Benefit claimants suffering from a mental or behavioural disorder.

Citizens Advice Northern Ireland broadly welcomes the goal set out in the green paper namely “to make sure that no one is written off”.  In general terms the provision of more personalised support to help those with health conditions and disabilities gain and retain employment is to be welcomed.

However Citizens Advice has a number of concerns about the proposals outlined in the green paper.  The goal of the paper can only successfully be achieved if a range of other factors are in place:

• The provision of support more personalised to individual need in order to help people find and retain work must be provided at the right time and be adequately resourced to ensure that people are not forced into a work situation that they cannot cope with.  We have particular concerns about those with mental health problems and those with more severe disabilities.  It is also vital that the staff involved in this process are adequately trained and that interviews are carried out sensitively to ensure that those who are able to work are given the necessary support to be able to do so. Equally, it is essential that those with more difficulties in this area are not forced into work which will neither benefit them or their potential employer.  We have concerns about whether the capability exists within the Social Security Agency (SSA) to deliver this major transformation in policy given reductions in staffing levels.
• People on benefits should not be made to take a job that does not result in them being better off financially.  There needs to be a better understanding of the entire range of barriers to work experienced by individuals before considering sanctions which would ultimately stop a person’s benefit entitlement.  The small gains to be made by taking up low paid employment can be completely wiped out by the loss of passported benefits such as free prescriptions and free school meals.  It is important that the full range of factors are accurately taken into account and explained to claimants.
• There is a job to be done on improving and simplifying the delivery of the full range of benefits and tax credits that support people in work as well as promoting the take up of these benefits.  This will involve improved competence and knowledge within the SSA and partnership working with HMRC, local housing benefit departments and the voluntary advice sector.  For example, for some claimants a lack of confidence about the reliability of their tax credits claim can be a barrier to taking up low paid work which relies on tax credits to supplement their earnings.  There is a general lack of confidence in the ability of the benefits and tax credits systems to adjust to changes in circumstances, preventing gaps in household income when people move from benefits into work.
• For lone parents the availability of affordable and suitable childcare is for many not a reality and many lone parents are unable to juggle work and childcare arrangements.  Access to affordable and flexible childcare is critical to the success of the proposals outlined in the green paper.
• Working with employers will be crucial to securing more employment for people on benefit.  The strategy will only succeed if there are jobs to be filled, if these jobs genuinely make people better off in work than on benefit and if this employment is sustainable over time.
• A key element of the green paper is to abolish both Incapacity Benefit and Income Support.  These benefits will be replaced by a simplified system of two benefits – Employment Support Allowance (ESA) which will be regarded as a temporary benefit for all but the most disabled people and Jobseekers’ Allowance for those who are fit to work.