Government to take £40 from everyone who loses their job

25th May 2014

From this Autumn anyone who loses their job will receive £40 less as a result of government plans to make people wait for longer for any job support, according to a consultation published today (Friday) by the Social Security Advisory Committee (SSAC) – an official body that advises the Department of Work and Pensions on benefits issues.

The TUC believes that the new policy will make newly unemployed people easy prey for loan sharks, with even the government admitting that the change may increase reliance on short-term loans.

The government plans to make all new claimants for Jobseeker's Allowance (JSA) or Employment Support Allowance (ESA) wait seven days before they are eligible for help (at the moment they have to wait three days). The committee's consultation reveals that, according to the government's own assessment, JSA claimants will lose £40 on average, while disabled people claiming ESA will lose £50.

The government’s impact assessment of the change, published by the SSAC as part of its consultation, shows that over 1.3 million people a year will be affected.

The government also believes that disabled people will be disadvantaged by the new policy and that under Universal Credit, "the potential hardship for claimants is much greater."

TUC General Secretary Frances O’Grady said: "Forcing people to wait for job support will not help anyone find work. Instead it will make them easy prey for loan sharks. This has nothing to do with making work pay. It is simply a mean attack on the welfare safety net and could affect any one of us.

"It won’t matter how long anyone has had a job or how much they have contributed to the system, they will all suffer the same penalty. The vast majority of people who lose a job thankfully find another one within a few months, but this is when they need help to tide them over between jobs. That is why we have a national insurance system to which we contribute when we are in work – a system that is now under attack."

Consultation

Government proposal to extend benefit waiting days: consultation announced

SSAC has today launched a public consultation on the Government’s intention to extend the number of days a claimant must wait before they are entitled to receive certain benefits from three to seven.

It is estimated that those making a claim for Jobseeker’s Allowance (JSA) or Employment Support Allowance (ESA) will lose, on average, £40 or £50 respectively.

Announcing the consultation, Paul Gray (the Committee’s Chair) commented: “This proposal has history. An identical change was put forward by the Government in 1998 but subsequently dropped. Then, as now, an understandable desire to
ensure limited public resources are used most effectively was the main driver for the proposal. However, as benefits are now being paid fortnightly in arrears, it is important that we understand the full impact of this change – particularly on the most vulnerable. We are keen to hear from anyone who is able to provide information about the consequences of this change".

The Department for Work and Pensions estimates that, as a result of this proposal, the average loss of benefit at the start of each award will be £40 for JSA claimants and £50 for ESA claimants. The Government intends that the savings generated will fund other initiatives designed to help people find work.

The change is intended to commence in October.

The evidence received by SSAC will help inform its report which will be submitted to
the Rt Hon Iain Duncan Smith MP, the Secretary of State for Work and Pensions, in
the summer. Responses should be submitted to the Committee’s Secretary by 13
June:

The Committee Secretary
Social Security Advisory Committee
5th Floor
Caxton House
Tothill Street
London
SW1H 9NA

Alternatively they can be emailed to ssac[AT]dwp.gsi.gov.uk