Universal Credit claimants who have had sanctions imposed on them take longer to move into work and earn less than those who have not been sanctioned, the Department of Work and Pension's own figures show.
The DWP published a report this month, written in 2020, which shows that the sanctions regime has fallen short of expectations if its purpose was to help move people off benefits and into paid work. In fact, the report shows that sanctioned claimants earn an average of £34 a month less when they do eventually move into PAYE work.
Sanctions are a reduction in Universal Credit when a claimant does not carry out tasks as requested by the DWP or Jobcentre. The DWP Understanding Universal Credit website says: "In return for receiving Universal Credit you will need to do certain things. If you are able to prepare or look for work, this will include attending appointments with your work coach. These can take place by phone, video call or in person at a Jobcentre.
"No matter how your appointment is due to be held, it’s important that you attend. If you are asked to attend an appointment but don’t attend and don’t have a good reason why, your Universal Credit payments will be affected."
The DWP says sanctions prepare claimants for workplace responsibilities and 72% claimants agree it makes them more likely to look for work or take steps to prepare.
Read more: All you need to know about Universal Credit sanctions as DWP imposes 'more rigorous' regime
The report, called The impact of Benefit Sanctions on Employment Outcomes, says that claimants who have been hit with a sanction have eight per cent shorter Universal Credit periods than those who were not sanctioned, but that the majority of those with shortened claims disappear– they do not move into paid employment and no research on moves into self-employment was carried out.
The report comes as Chancellor Jeremy Hunt announced in the Spring Budget that the sanctions regime would be applied “more rigorously” as part of the Government's plan to get more people back into work. This means that those who fail to meet new strict work-search requirements or choose not to take up a reasonable job offer are likely to be sanctioned
The Chancellor said: "Sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer. In other words, if you don't meet your work-search requirements or choose not to take up a reasonable job offer, you will be more likely to be sanctioned and lose some of your Universal Credit.
"There are more than two million jobseekers in this group, more than enough to fill every single vacancy in the economy. Independence is always better than dependence, which is why we believe those who can work, should."
Government figures show that 2.5% of claimants were sanctioned in August 2022, a total of 115,274 people, which equated to over £36m taken from people's Universal Credit payments. The new regime will also affect those who work 15 hours a week or less and claim Universal Credit, who will have to work more hours to keep their Universal Credit under the new regime.
Benefits and Work, a group that campaigns on benefits rules, said: "If sanctioning claimants is supposed to help people move into paid employment it fails dismally. The reality is that the sanctions rate was at a record 6.86% in October 2022 and the DWP are now planning to considerably toughen the regime without any evidence it will have any positive effect. We can be sure, however, that a harsher regime will cause severe hardship and additional claimant deaths."
However, the DWP argue in a ‘context note’ released with the report that the research cannot be relied upon because it did not take into account the value of the deterrent the sanctions regime created. The sanction rate fell from six per cent in August 2017 to below three per cent in August 2018, which it claims is evidence that claimants changed their behaviour and became more complaint because of the deterrent effect of sanctions.
Benefits and Work said: "No research has been carried out to demonstrate that this deterrent effect was actually responsible for the fall in sanction numbers. The DWP can turn sanctions on and off like a tap and it is entirely possible that it was changes in DWP procedures and the department’s fear of negative publicity surrounding sanctions deaths that caused the drop in the number of claimants being sanctioned.
"Without independent research into the deterrent effect, which the DWP has had three years since the draft report to carry out but has chosen not to, there is not a scrap of evidence that sanctions are anything but ineffective."
A DWP spokesperson said: "Being in work provides financial security and is the best way for people to get on in life, while growing the economy. That’s why we’re helping more people move into work – by removing barriers and increasing work coach support.
"Sanctions – 97.6% of which are applied when claimants fail to attend mandatory appointments – are measured and proportionate. They ensure fairness runs through the system, both for claimants and the taxpayer, and it’s important to note this report does not assess sanctions’ deterrent effect.
"Conditionality is a cornerstone of our support with sanctions designed to encourage people to meet certain commitments, preparing them for workplace responsibilities. Most claimants agree this makes them more likely to look for work or take steps to prepare.”
ChronicleLive has previously reported on former NHS worker Errol Livingstone, of Gateshead, who was living on vegetable juice and unable to use his oven after being sanctioned when he did not attend a course. Mr Livingstone, who appealed against the sanction, said the shortfall caused him extreme hardship at a time when the cost of living was already putting a strain on his budget. He lost £11 per day for eight days, a total of £88, from his monthly payment of £319.84.
Mr Livingstone said he was under the impression that he didn't have to attend the course due to his experience in recruitment, said: "The sanctions don't give you any right to reply or respond to the accusations, they are just imposed on you. I go on my Universal Credit journal every day and one day I noticed that the sanction had been imposed. There's no communication or no way you can defend yourself. It's an awful system."
Read more:
- Universal Credit claimants sanctioned by DWP can now ask for their money back
- Eight Universal Credit changes which might affect your payments this year
- DWP benefits could be slashed as energy bill repayments freeze comes to an end
- Month-by-month guide to when you can expect all of this year's cost of living payments
- DWP Universal Credit claimants hit as sanctions rise by 250% amid claims they are 'back with a vengeance'
