As part of the governments attempts to cut public welfare spending the long-term jobless are to be targeted with extended financial penalties for failing to take or seek new employment opportunities.
This policy is nothing new, there are already financial penalties for those claiming Jobseeker’s Allowance (JSA) who avoid taking job opportunities. The government now plans to extend these penalties further in an attempt to force the long-term unemployed into work.
Financial Penalties for Job Avoidance
Penalties were established by the previous Labour government to try to reduce the number of long-term benefit claimants. The current penalty consists of loss of JSA benefit for up to six months. Figures show that the current average period of time for loss of benefits is just over 4 months.
Those individuals who do lose their JSA entitlement of £64.50 per week are able to apply for a hardship fund but the monthly benefit is significantly less than full JSA benefit. For a first offender the hardship fund entitlement would be £51.60, falling to £38.70 for subsequent offences.
This means that individuals who persistently fail to take on new job offers or put in insufficient effort to gain a job could lose around £110 per month in financial JSA penalties. The penalty does not apply to single parents with young children.
Under the previous government many commentators suggested that penalties were not issued far enough. In 2009-10 only 3 per cent of the 5 million JSA claimants had sanctions imposed.
The New Plans for Extended Penalties
The penalties imposed by the last Labour government will remain in place under the new coalition plan but the extent of the penalties will be extended. Rather than have benefits removed for up to 6 months the new plans could impose penalties of up to three years.
There is also speculation that the Department for Work and Pensions (DWP) will require claimants to repay any benefit paid out from the hardship fund, except for those with children.
With the coalition government planning to toe an extremely hard-line with claiming JSA there is likely to be extreme pressure for claimants to take the first job that comes along, even if an individuals skills or experience far exceed what is necessary. The risk of losing the unemployment benefit may prove too strong to hold out for a suitable job.