Tag Archives: benefits regulations

When is a job, not a job? Understanding the new “16 hour” benefit trap

When Iain Duncan Smith launched his vision of the welfare state, at the heart, was a fundamental commitment to tackle the benefit trap. He grasp the nettle and explained in clear terms how our confusing and complicated benefit system traps people – making people financial worse off if they returned to work. One of his key objectives was to get rid of the “16 hour rule” (if you work for under 16 hours a week while on benefits then for many claimants you can only keep £5 of your earnings and then every other £1 you earn is deducted from your benefit). Most people who try to work for under 16 hours a week are worse off – IDS took this on board and launched his plan (Universal Credit) for a new system that would enable people to get back into work as soon as possible even if this was only for a few hours a week – giving people a real chance to start working again without being financial worse off.

It is going to be years before the current benefit trap is destroyed by the Universal Credit reforms but just as IDS and his team start dismantling the current trap, it appears that a new and just as effective, barrier to taking up part-time work opportunities could be built and this has just as many teeth and is just as nasty…..

Next month the new Work Programme will be launched. People who are unemployed will be automatically be referred to the programme and will be offering training and support to find work. If people refuse to comply with the plan that their Work Programme provider has developed they will be subject to a range of sanctions including benefit being suspended. Activities include training courses, work placements and a range of other types of support to help people overcome barriers to employment. As anyone has tried to combine “complying” with the benefit rules and trying to work part-time or volunteering will tell you – the attitude of your employment advisor is key to whether you can make a success of part-time work, while also increasing your skills or accessing other types of support. Sometimes trying to “complying” with your welfare to work advisor means trying to be in two places at once – attending a compulsory course and going to work.

Over the last few months I have been meeting with providers of employment support to talk about the how part-time jobs in communities provides a real stepping stone back into employment – the providers have been incredible supportive and recognise how valuable such jobs could be to the people they work with…However, they have all highlighted a tension within the Work Programme – the definition of getting someone into work i.e. “getting a job” is a job of 16 hours or more a week.  The provider only gets paid for all their work if someone gets a job of at least 16 hours…. anything less isn’t counted as a “job-outcome’ for DWP – so the pressure is on the providers and people receiving benefits to make it to over 16 hours employment….

DWP have been very clear that it is up to Work Programme providers to decide the best way to get people into work. So, the real power over whether people can take up job opportunities of less then 16 hours now shifts to the Work Programme providers. Will they be able to ensure we don’t build a new barrier to work or will we see the building of a new trap that means you risk benefit sanctions and a whole lot of hassle if you take a job of less then 16 hours while on the Work Programme ?

Advertisements

Surviving on a shoestring? Stuck in the benefits trap? Why not share your experiences with the world

From our experience, the assumption that people living on benefits don’t want to work simply isn’t true. We know that trying to survive on a very low income in the UK is a tricky business. Which is why we are working with OXFAM to find people who would be willing to share their experiences and frustrations on what it’s really like trying to survive in the system.

We’d like to hear from women and men who’d be up for taking part in a blog to record your experiences, tips and ideas as the Government makes decisions that affect your lives. We also want people who are happy to talk to the media. We think it’s time that the public and politicians see what it’s really like to survive in Britain today.

If you are struggling with the system, whether in work or on JSA, receiving housing benefit, incapacity benefits, are a single parent finding it hard to get by or have recently lost your job and can commit to volunteering with us as a blogger for the next few months, please send an email to sdransfield@oxfam.org.uk

From Black Boxes to Big Society

Over the last few weeks I haven’t had chance to update my blog – like most people working in community or welfare to work organisations, I have been racing to keep up with the pace of change. I thought I would use this blog to give you a whistle-stop tour of the latest developments….  

The Work Programme

All innovation within the delivery of welfare to work services is now expected to come from within The Work Programme. Providers have been told they can adapt a “Black Box” approach to delivery. Over the last few weeks I have been talking to providers such as SERCO, about their “Black Box” and the potential contribution the Community Allowance could make. The initial response has been very positive with providers keen to hear more about how they can work with local community organisations to offer new jobs, integrated with wraparound training and support. We are keen to explore the potential for this joint working and to identify the right partners to work with.

The Welfare Reform Bill

I have just started working on our response to the consultation paper and will be sharing it with you soon. The proposals on earning disregards (the ability to work while on benefits and keep earnings below a ceiling) are still vague – no figures yet – but they have the potential to enable the Community Allowance to be offered to everyone on benefits. Finally, we may see the end of the 16 hours rule and the bizarre situation we have now that effectively bars people from taking any work under 16 hours. The proposed approach to tapering the earning disregards also mirrors the Community Allowance’s approach of progressively increasing the number of hours people work – protecting people as they start to work.

Big Society

The Community Allowance approach was developed from the first hand experience of local community organisations. A simple but powerful tool that makes a productive link between the most substantial public spending in poor neigbourhoods (billions in welfare payments) and the abilities of those neigbourhoods to liberate themselves from poverty and poor services. The Community Allowance gives communities new resources and ways of working, enabling them to develop local solutions to improve and regenerate their communities. All the jobs created by the Community Allowance are the ones that are fundamental to making and sustaining communities – the caring, sharing, supportive, cleaning, greening, keeping-safe, checking-over, sorting-out, neigbourhood managing, wardens, lollipop ladies, befriending, youth work, sports and social health living, conflict-resolving and care-taking roles.

I have written to Ministers and senior civil servants about the Community Allowance. We have been very fortunate that Ministers have also heard about the Community Allowance directly from a number of our supporters including the DTA and ACEVO. We are planning a number of events over the next few months to raise awareness and support for the Community Allowance from fringe meetings at the Party Conferences to working with our 100’s of supporters. We are also working closely with OXFAM, who have adopted the Community Allowance as a key campaign against poverty.

I have recently updated our website to reflect the changes being planned by the government – so if you haven’t visited our site for a while – please have a look and let me know what you think.

If you are interested in hearing more about our work, please do not hesitate to contact me

Best wishes

Louise

Cameron’s difficult decisions

Prime Minister David Cameron’s speech today, warned of “difficult decisions” on pay, pensions and benefits as he set out the case for “painful” cuts ahead. He said dealing with the deficit would be “unavoidably tough” and affect “our whole way of life”. While no new details were given on what will be cut, we were offered some reassurance that he would not cut the deficit “in a way that hurts those we most need to help”.

The Department for Work and Pensions spent £87 billon on benefits last year. For many deprived areas spending on benefits payments and welfare to work programmes is the largest public investment they receive, yet has limited positive impact. It is clear that there are going to be fundamental changes to the benefit system as proposed by the Welfare Reform Bill and more support for local councils and communities to develop solutions to local issues, in the Decentralisation and Localism Bill.

Yet we know that any discussions about making the benefit system “fairer and simpler” or giving communities more power, take place against a backdrop of large scale cuts. If we are to ensure that policy discussions are not simply dominated by calls for cuts in benefit payments and sanctions, we need to make sure that positive approaches that do give power back to communities – such as the Community Allowance – are known about and understood. Developed by local community organisations and people on benefits, the Community Allowance enables people on benefits to be paid to work in their local community – a step up into employment for people on benefit and a step up for local communities.

Last week we wrote to Ministers responsible for the Welfare Reform Bill and the Decentralisation and Localism Bill asking for meetings to discuss the Community Allowance. Both these Bills provide an important opportunity to radically change the benefit system and the role of people on benefits in transforming their local communities. The Community Allowance is supported by over 300 individuals and 100 community organisations. We would like to increase the number of people who know about the benefit trap and solutions such as the Community Allowance and need your help – Is your organisation or group signed up as a supporter of the Community Allowance? – Can you help us increase the number of people who know about the benefit trap and the Community Allowance through your website, blog or newsletter? We know that if we want to make sure any “difficult decisions” the government makes includes fair, community owned and developed solutions, we need your help to be heard. Please sign up at our website or email me at L.Winterburn@dta.org.uk

IDS is Smiling in his dream job, will he help us create more dream jobs?

The Independent On Sunday claims that Iain Duncan Smith has the broadest smile in Downing Street this week, having started his dream job of Work and Pensions Secretary. We see his appointment as a real boost for the Community Allowance campaign. His work in developing the Centre for Social Justice and its role in highlighting the benefits trap highlight many areas of  real agreement on the problems with the benefit system and what needs to be changed. The Centre for Social Justice’s report on benefits – Dynamic Benefits: Towards Welfare that Works, also give us some idea of  the approach that IDS may take in the coming months and we have found some things to smile about too.

We have argued strongly that the benefit system should provide a step up for people and not act as a trap. Yet many recent discussions of welfare reform have been dominated by plans to increase compulsion and threats to withdraw benefits for non-compliance. We have demonstrated time and time again that it is the benefit system that is at fault not the people claiming benefits (see this short film if you would like to hear more). The Centre for Social Justice have also concluded  “For many, the answer to unsustainable welfare bills is to introduce ever tighter rules for receipt of benefits, and to cut generosity for some claimants. However, this approach has never worked. it is not the particular levels and conditions that are at fault, but the structure of the system itself.”

We have also long campaigned for the role of part-time work to be recognised as a positive and valuable opportunity for people currently claiming benefits. We have asked for changes to be made to the earning disregard to enable people to take on part-time jobs and actually be better off. The Dynamic Benefits Report recognises the importance of part-time work and how the current system prevents people taking up job opportunities “For many carers, a low-hours job is all they can take on; and for others an entry-level job represents a stepping stone to higher-earning employment. yet, virtually all initial efforts to work are penalized“. The report recommends a radical change to the earning disregard to support people to take up part-time work.

The Independant on Sunday article also concluded that raising the earning disregard and allowing people to work part-time was a “no-brainer” but was concerned there would be no demand by employers for people who were on benefits. We know that part of the answer lies within local communities where we can offer  part-time jobs with training and support but also make a real difference to the local community – by ensuring the jobs have a local benefit, making a real difference to local community and to the tax payer  – as every £1 spent on the Community Allowance results in £10 worth of social value being created.  We estimated that at least 80 part-time jobs could be created in every neighbourhood through a Community Allowance – providing stepping stones on the pathway to work for thousands of benefits claimants across the country. Over 100 local community organisations have signed up to support the Community Allowance. Over 70 organisations have expressed an interest in being involved in piloted the Community Allowance in their local communities. The Dynamic Benefit Report also recognised the core role that the voluntary sector and local communities can play.

Last week Oxfam thrown its weight behind the campaign for the Community Allowance. We are now writing to IDS to ask for a meeting, hoping his understand of the benefit trap and what can be achieve by local communities will finally enable the benefit system to provide a step up for people and places. To find our more about the Community Allowance  and add your support to the campaign please visit our website at http://www.communityallowance.org/

A tale of two cities

On my way from a meeting at the Institute of Fiscal Studies to the Department of Work and Pensions yesterday, I picked up a copy of the Evening Standard on the tube. The headline rang ‘The Dispossessed’: London is a shameful tale of two cities. In the richest capital in Europe almost half our children live below the poverty line.

It was refreshing to see a mainstream media outfit deal with the issue of poverty in London. This is something one of the CREATE Consortium’s members, Community Links, has been blogging about recently.

Reading Joe Murphy’s How politics turned its back on the dispossessed, was particularly interesting given the conversation I had just had with the Institute of Fiscal Studies’ Mike Brewer. We were discussing the difference in attitude that both politicians and the public have towards benefits payments and tax credits. Both are tax payer’s money and yet benefits are seen as a drain on the public purse, something to be minimised at all costs, while tax credits are seen as a positive intervention.

It left me wondering from a campaigning point of view what we could do to change this attitude. It goes to the heart of why there is a need for a Community Allowance. If you are on Job Seekers Allowance and try to work for under 16 hours a week you have penny for penny taken away; the earnings disregard still being only £5 a week – less than an hours work on the minimum wage, unchanged since 1988! Yet if you take a job of 16 hours, tax credits protect your income and you are better off in work.

What kind of message does this send to people who want to get themselves out of poverty by taking some part time work? Why did the Government decide that 16 hours is good but 8 hours is bad? It’s an illogical distinction, only made logical by the pervsersity of the difference between the benefits system and tax credits. It has to change.

Interestingly, I am noticing that there seems to be a growing understanding of the necessity of this change, across the political spectrum. This marked change in attitude has come about in the last two years through a wealth of campaigning about the earnings disregard and influential reports such as the Centre for Social Justices’ Dynamic Benefits.

On Saturday I was on a panel with Tim Loughton MP (of Tower Block of Commons fame)  Shadow Minister for Children, at the Conservative Party Spring Forum. He seemed to get it. So did Terry Rooney MP, Chair of the DWP Select Committee, who I met yesterday after I’d been to the DWP.

The question is, what are politicians going to do about it? In a new era of austerity and public spending cuts, how do we tackle poverty? We think the Community Allowance is part of the answer to that question. For a change in the benefits regulations you get a win-win-win: for the person on benefits, earning a bit of money and gaining real work experience, for the community having socially valuable work done locally and for the tax payer every £1 spent on a Community Allowance would create £10.20 worth of social value.

We’re still waiting to hear from DWP about whether we can pilot the Community Allowance. The pace of the discussions in response to our Right to Bid proposal originally submitted in January 2009 is making us question the depth and sincerity of their commitment to pilot it in the 2008 White Paper. We’ll be blogging soon about what we’re thinking of doing next and how you can get involved.

Guest Blog – Sir Trevor Chinn: The benefits of work

The absolute route out of poverty is a decent job. All our efforts and mechanisms should be encouraging people in this direction.

There are wonderful stories of people taking poor jobs, even to their own financial disadvantage, because they believe in the dignity of work or as an example to their children.  Most poor people, living on benefits, need real encouragement and help to move in this direction.  The benefits system does not necessarily encourage them.  There exists an historic and collective memory about losing benefits and about over-payments which frighten people from taking work.

The Community Allowance will enable people to ease their way into work, to get used to the idea of working, and the psychological and financial improvements that go with it.

I have recently chaired a Taskforce for the Government on the Take up of Benefits.  I learned of the extraordinary complexity of the benefit system which is of course targeted at the most deprived and least educationally advantaged segments of our society.  Unfortunately not only is it complex but elements of the system produce traps for those enjoying certain benefits but wanting to take employment. A lack of understanding of Working Tax Credit adds to the misconceptions. Further- more an over-emphasis on benefit fraud frightens away many who don’t understand the system (of a 2% total of official error, customer effort and fraud, only 0.6% is fraud). To sum up, the Taskforce Report’s headline was that if everyone took up the benefits to which they are entitled, a further 400,000 children would be taken out of poverty.

It is easy to under-estimate the benefits of work.  Work is a habit which needs to be developed and encouraged.  The advantages of work undertaken within the Community Allowance framework is that it eases that process.  Taking on part-time work is a first step that can lead to full time employment.  The extra income will bring benefits that can lead to a desire to achieve a full time wage. The extra money will lessen family poverty.  There is also the benefit to the Community of the work being done which will improve the environment for all those living there and the worker having a sense of helping others.  The income derived will be spent locally thus also improving the financial well-being of the community.

It is a win/win/win.  The greatest benefits are psychological – for the person undertaking work and experiencing a sense of personal value – for his or her family, benefiting from the experience of someone without work, under-taking work – for the community, seeing someone unemployed doing work which benefits those around them.  We are seeing large scale unemployment in certain areas of the country and especially London.  The communities experiencing high unemployment can be ones where no-one in a family has worked for three generations; can be individuals experiencing long-term unemployment; can be young people unable to find work because of the recession; can be ethnic minorities disadvantaged by language, education or discrimination.  Every time we help someone into the work process we are making a huge difference to their lives and their well-being. The Community Allowance can be an important process in that direction.

Sir Trevor Chinn, Businessman and Philanthropist