Young Adults Hit Hardest by Benefit Sanctions

September 11, 2014     Leave a Comment

A new report published by the Joseph Rowntree Foundation today focuses on conditional welfare arrangements, which require people to behave in a certain way to access welfare goods. Sanctions within the benefit system seek to incentivise work-seeking behaviour on the part of claimants, with the intention of tackling ‘welfare dependence’ by increasing the rate and speed of job entry.

Much recent controversy has surrounded the rapid escalation in the use of sanctions under Job Seekers Allowance (JSA)  and Employment and Support Allowance (ESA). Monthly JSA sanction rates have risen from 2 to 2.5 per cent of claimants in 2000-2006 to 6 per cent by late 2013, and now stand over 7% (see Figure 1). While the number of ESA claimants affected by sanctions is small by comparison, a rapid increase in sanctioning of claimants in the ‘work related activity group’ is now also evident. According to Dr David Webster, in 2013/14 there were just short of 1 million sanctions under ESA and JSA, the highest figure since JSA was introduced in 1996 by a considerable margin.

Monthly Referral and Sanction rates 2000-2013 – % of all JSA claimants

Monthly Referral and Sanction rates 2000-2013 – % of all JSA claimants

Commentators from a range of perspectives have highlighted the negative consequences of benefit sanctions, including causing hardship, and even in some cases destitution.  While international evidence indicates that sanctions (especially severe sanctions) substantially raise exits from benefits, and may also increase short-term job entry, longer-term outcomes for earnings, job quality and employment retention appear unfavourable (see a review of the relevant evidence here [insert link to round-up]).

The disproportionate impact of sanctions on vulnerable groups (lone parents, disabled people, homeless people) has increasingly been recognised, including in the recently published independent review of sanctions applied to JSA claimants through mandatory back to work schemes, undertaken by Matthew Oakley on behalf of the Department for Work and Pensions (DWP). In its response to the review, the Government outlined its intention to finding better ways to work with vulnerable claimants. The Government have also recently introduced ‘easements’ of work requirements for some recently homeless JSA claimants, as long as they take reasonable steps to find accommodation.

What has gained less mainstream political attention is the fact that under-25s face a substantially higher risk of being sanctioned than older adults, compared to around 5.5% of all claimants (see Figure 2).

Monthly adverse decisions as % of all JSA claimants

Monthly adverse decisions as % of all JSA claimants

The reasons for this heightened risk of sanctioning for younger people are not entirely clear, though it is interesting to note that international evidence, particularly from the US, shows that young people elsewhere are similarly at risk. There are several factors that could be working alone or in combination to explain this:

  1. younger claimants have a more relaxed attitude to sanctioning as they are more able than older groups to rely on help (financial or in kind) from their families;
  2. younger claimants are more likely to have chaotic or insecure lifestyles that make compliance with behavioural conditions more difficult;
  3. younger claimants are less experienced in navigating the behavioural requirements within the welfare system and are therefore more likely to fall foul of these conditions;
  4. younger claimants face direct or indirect discrimination within the welfare system and are thus more likely to be sanctioned than other groups, even if they are equally ‘compliant’.

Whatever the explanation for the disproportionate impact of sanctions on under 25s, it clearly gives cause for concern in a context where this group face significant challenges in other areas, with high rates of youth unemployment, real declines in earning (see also here) and high rents meaning that many young people are unable to leave the family home and those that do face high rates of poverty. Until recently mainstream political debates about ‘intergenerational justice’ have tended to focus on restricted access to home ownership, higher university tuition fees and unpaid internships (for example see here and here). Less attention has been paid to the difficulties faced by the poorest young people.

While it has long been the case that single under 25s have received less generous benefits than older age groups, the strongly disproportionate impact of sanctions on this age group could be seen as a prelude to the gradual removal from the benefit system of all but the most obviously vulnerable young people (such as care leavers). Last year, the Prime Minister suggested that if a majority Conservative Government is elected in May 2015, it would seek to prevent under 25s from claiming housing or unemployment–related benefits under an “earn or learn” policy. This commitment has been formalised by the Chancellor of the Exchequer, who has indicated that a majority Conservative Government would seek to make a further £12bn cuts to welfare spending in 2016/17, with the removal of Housing Benefit eligibility from under 25s a key suggested means of achieving this. While the proposal sparked some controversy, Labour has also announced intentions to introduce restrictions on young people’s benefit entitlements if they win at the next election (see also here).

Thus the higher risk of sanctioning young adults face within the current benefits system may well be a harbinger of a much wider erosion of young people’s welfare entitlements. This suggests a need to urgently revisit the question of how (poor) young people’s transition to adulthood can best be supported, but also about the status of (poor) young people as citizens.

Beth Watts and Suzanne Fitzpatrick, September 2014

To download the full report visit the Joseph Rowntree Foundation

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