Conditionality and sanctions are an important part of the welfare system, motivating claimants to engage with the support on offer to look for work while ensuring the system is fair to the taxpayer.
Sanctions must be proportionate, particularly for the most vulnerable. The level of a sanction depends on the severity of the claimant’s failure to comply with their work-related requirements. Sanctions escalate for subsequent failures, carrying greater penalties. Under current policy, a claimant on Universal Credit or Jobseeker’s Allowance may receive a three-year sanction the third or subsequent time they have failed to comply with a work-related requirement.
Three-year sanctions are rarely used, but I believe that they are counter-productive and ultimately undermine our goal of supporting people into work.
I have reviewed my Department’s internal data, which shows that a six-month sanction already provides a significant incentive for claimants to engage with the labour market regime. I agree with the Work and Pensions Select Committee that a three-year sanction is unnecessarily long and I feel that the additional incentive provided by a three-year sanction can be outweighed by the unintended impacts to the claimant due to the additional duration. For these reasons, I have now decided to remove three year sanctions and reduce the maximum sanction length to six months by the end of the year.
It is important that sanctions remain proportionate to ensure they promote the best outcomes. For this reason, the Department is currently carrying out a further evaluation into the effectiveness of UC sanctions at supporting claimants to search for work. I will consider what other improvements can be made following this and inform the House in due course.
This statement has also been made in the House of Lords