Yahoo Finance 'Punitive' universal credit sanctions regime pushing Britons into hardship
Campaigners have urged the government to bring "human" reforms to a crackdown on universal credit (UC) as figures suggest claimants are being sanctioned at pre-pandemic levels.
When UC claimants are sanctioned, the Department for Work and Pensions (DWP) temporarily cuts their payments, leaving people without any income. This is referred to as a "labour market sanction".
The punitive measure is often applied to those who are considered to have failed to meet the conditions put on their claims. This includes things such as missing a job centre appointment or turning down an interview for a job the DWP believes they are fit for.
Recent data shows 46,000 people relying on social security were cut off in November 2021.
The process of receiving a sanction is a two-stage process which can result in a loss of payment of up to £10.60 ($14) a week for up to 6 months, with more severe cuts lasting up to three years abolished in 2019.
As the cost of living is set to rise significantly this year, the Institute for Public Policy Research (IPPR) warned that hundreds of thousands of already-struggling families could be pushed into destitution.
UK chancellor Rishi Sunak resisted calls to increase benefits in line with the cost of living in his latest Spring Statement in March, as Bank of England economists warned inflation could hit above 8% this month.
Sunak's decision to lift social security payments by 3.1%, based on inflation recorded last September, coupled with increasing sanctions will push more vulnerable people into poverty, the IPPR said.
Henry Parkes, senior economist at IPPR, said: "Alongside desperately needed action to increase the value of universal credit to keep up with the rising cost of living, we also need urgent action to ensure our social security system offers genuine security where people fall back on it.
"This should include urgent reform of the punitive sanctions regime, and a wholesale review of how the system can treat every claimant with dignity and respect."
The think tank said that the five-week wait for claims to be approved "causes hardship" as not all claimants are aware that they can ask their work coach for an advance if they can explain why they need it.
Read more: UK services firms hike prices at record pace
There is usually a five-week waiting period from when a claim for UC is made and the claimant commitment signed to when the first payment comes through.
The IPPR said that awareness of alternative payment arrangements were low, with respondents saying that it would have been helpful if direct and more frequent payments were offered so they can manage their money more easily.
The group called on the DWP to formally evaluate whether the alleged benefits potentially brought about by a sanctions regime, such as increased adherence to work search and work-related activity, are worth the costs to the individuals, the DWP and UK society as a whole.
A separate analysis warned that the number of English households in "fuel stress" will double from 2.5 million to 5 million as a result of the price cap increase from Friday, a report suggests.
The rise in the energy price cap is set to add an extra £58 a month to the average energy bill from 1 April.
It comes as Bank of England governor Andrew Bailey warned that UK real incomes face a "historic" energy shock due to the Ukraine conflict.
Read more: Energy price hike: 5 million English households to feel pinch from rising bills
UK inflation hit a 30-year high of 6.2% in February, its highest level since March 1992, and up from 5.5% in January.
Meanwhile, the Office for Budget Responsibility (OBR) warned last month that UK living standards are set for the biggest drop on record as higher inflation will cut household disposable incomes by 2.2% on a person-by-person basis in 2022-2023.
The OBR predicts inflation will hit a 40-year high to 8.7%, with energy bills poised to rise £830 a year from October, contributing to the biggest fall in living standards since at least the 1950s.
