Work and Pensions Secretary Iain Duncan Smith has confirmed that part-time workers could face benefit sanctions under Universal Credit.
Iain Duncan Smith told the Work and Pensions Select Committee that trials were being carried out in parts of the North-West of England, on removing benefits from part-time workers who refuse to take on extra hours.
“In work conditionality” within the Universal Credit system could encourage part-time workers and the low-paid to seek additional hours, said Mr Duncan Smith.
However, Labour MP Debbie Abrahams said people were dying as a result of the having their benefits docked, a claim dismissed by Mr Duncan Smith.
Mr Duncan Smith told Debbie Abrahams that the benefit sanctions regime was “helping people focus” on finding work or additional hours, adding “a job doesn’t stay static at 16 hours – you want it to develop”.
Ms Abrahams asked the Work and Pensions Secretary: “Can you confirm that there is an intention to introduce in-work conditionality with Universal Credit and, if so, what sanctions could be applied, and under what conditions to the 3.5 million people in work on low pay and in receipt of tax credits?”
Iain Duncan Smith replied: “That is being investigated, as to whether we can now work to in-work sanctions – in other words, conditionality – so people get an opportunity to move up the hours if they can, and if they don’t wish to do that, we will see whether or not that system of conditionality works. We are trialling that.”
Ms Abrahams also accused Duncan Smith of a cover-up after he said no money had been lost during the botched introduction of Universal Credit. The DWP has already been forced to write-off £40 million in failed IT software, with an additional £91 million predicted to be lost over the next few years.
Universal Credit is replacing a number of existing benefits, including Housing benefit and Income Based Jobseeker’s Allowance, and rolling them into one single monthly payment. However, the government’s flagship welfare reform has been beset with delays and costly IT failures.
Up to a million households were originally expected to be in receipt of the new benefit by the end of 2014. But DWP figures show that less than 15,000 households or individuals were on Universal Credit by the end of September – mostly single people. The national rollout is scheduled to be completed by the end of 2018.
Mr Duncan Smith said trials of Universal Credit in the North-West of England had resulted in claimants finding work more quickly or taking on extra hours, leading to “early savings to the Exchequer”.
He added that businesses were more willing to take on people claiming Universal Credit than Jobseeker’s Allowance claimants, because those people could accept additional hours while keeping more of their benefit.
“Normally in a business, a job doesn’t stay static at 16 hours – you want it to develop”, he said.
“Businesses know that many people will not work more than 16 hours because they don’t think it is viable for them to do so because of all the withdrawals.
“What we are beginning to experience in areas of the North-West is they can now work to progress that individual and set training programmes around them, so it is worth investing in that individual to develop their own skills and their own productivity.
“In the North-West, many businesses are now asking to have people on Universal Credit to come and take interviews, because they know they can develop them all the way through.”