Nearly a quarter of Jobseeker’s Allowance claimants received at least one sanction between 2010 and 2015, according to a report from the National Audit Office.
The NAO says benefits sanctions, which the Government claims encourage people to look for work, can lead to lower wages and increase the number of people moving off benefits into inactivity. It recommends that the DWP should do more to understand these sanctions outcomes.
A benefit sanction is a penalty imposed on a claimant meaning a loss of income when someone does not meet conditions like attending jobcentre appointments.
The report recommends that the Department for Work & Pensions carries out a wide-ranging review of benefit sanctions, particularly in light of the introduction of Universal Credit. The DWP has commissioned independent reviews and taken steps to improve processes but rejected previous calls for a wider review.
The NAO says that the previous government increased the scope and severity of sanctions in 2012 and estimates the Department withheld £132 million from claimants due to sanctions in 2015 and paid them £35 million in hardship payments. It says the overall impact of sanctions on wider public spending is unknown.
The report says the monthly sanction referral rate rose to 11% in March 2011 then fell to 3% in December 2015. The NAO says it is likely that management focus and local work coach discretion have had a substantial influence on whether or not people are sanctioned.
The report also says that the DWP is missing its target timescales for sanction decisions relating to Universal Credit with 42% of decisions about Universal Credit sanctions in August taking longer than 28 working days, despite it hitting targets for other benefits.
Amyas Morse, head of the National Audit Office, said: “We acknowledge the department’s effort to reduce its error rate on sanctions, but we think there is more to do in terms of reducing them further, and in reducing the notable differences in sanctions applications between comparable localities.”