Sanctions

Welfare is designed to help people in genuine need, but with help comes an obligation to follow the rules. Sanctions are imposed on people when they don't meet their obligations.

Why are we making changes to the way we sanction people?

Sanctions can be applied to people with work obligations if they fail to comply, for example, they fail to attend an interview for a job.

People on Unemployment Benefit face full-time work obligations. Sole parents on Domestic Purposes Benefit may face part-time work obligations depending on the age of their children, and Sickness Beneficiaries may face part-time work obligations depending on their capacity to work. Partners of beneficiaries face full-time or part-time work obligations depending on the ages of any children they have in their care.

Invalid's Beneficiaries, Widow's Beneficiaries, and people receiving Domestic Purposes Benefit - Care of Sick and Infirm and Domestic Purposes Benefit - Women Alone, do not face work obligations.

Under the current rules, work-tested beneficiaries have 100% of their benefit suspended the first time they fail their work obligations - for example, if they do not accept a suitable job offer. The same penalty is applied if they fail their obligations a second time. This does not make sense.

There should be a greater penalty for a second failure and there is a risk that the 100 per cent rule for first failure can lead to fewer sanctions being used. We are introducing a 50 per cent reduction for the first failure. We expect this to mean that sanctions are more effective and used more often.

There will continue to be a safety net for sole parents and couples with dependent children. These groups will always keep 50 per cent of their benefit and all of their supplementary assistance. This avoids undue hardship for children whose parents fail to comply with their obligations.

Sanctions send a clear signal that people receiving financial assistance from the Government while not working are expected to actively seek work or take measures towards getting a job.

What's new for people on work-tested benefits?

From 27 September 2010 people on a work tested benefit will face a new sanctions regime. This includes:

• a 50 per cent reduction in their benefit payment for a first failure of the work test (currently these people face a 100 per cent suspension)
• a 100 per cent suspension for a second failure, as is currently the case, and
• a 100 per cent cancellation for a third, as is currently the case
• sole parents and couples with dependent children will face a maximum 50 per cent reduction, suspension, or cancellation of their main benefit, as is currently the case.

The impact of the sanction regime on Accommodation Supplement, Temporary Additional Support or Special Benefit includes:

• no reduction in these types of supplementary assistance for a first failure
• the supplementary assistance is stopped for any subsequent failure, as is currently the case
• people who have dependent children will continue to receive their full supplementary assistance, as is currently the case
• Disability Allowance and Child Disability Allowance are not affected by sanctions.
• In order to re-comply, people will have to carry out the same activity as the failed activity where possible or a substantially similar one. For example, if someone fails to turn up for a scheduled interview, they will have to attend another interview before they have their benefit re-instated.
• People who have good and sufficient reason for failing to meet their work obligations will not be sanctioned.

Important facts and statistics about sanctions

• During 2009 there were 28,000 people who had sanctions imposed. The majority were for a first failure of the work test.
• The majority of the sanctions imposed were for beneficiaries on Unemployment Benefit where they failed to participate in employment related activities, such as Employment Workshops, or they failed to show up for appointments with case managers to discuss job search and job opportunities.
• Approximately 50 per cent of all beneficiaries who were sanctioned were aged between 18 and 24 years.
• Single beneficiaries with no children are more likely to be sanctioned than couples with children.