Callous switch of disability benefit definition

One of the hidden and apparently subtle changes to the 1% uprating of benefits for the next three years is the definition of Employment Support Allowance (ESA).

The Government has stated that all disability related benefits are safe from the 1% uprating of benefits. However, look through the detail and you see that this is simply not the case.

Disabled People Against Cuts for The Atos Game...
Disabled People Against Cuts for The Atos Games Demo Birmingham (Photo credit: dis_ppl_protest)

Employment Support Allowance is the disability benefit that replaces the old Incapacity Benefit. Within this is the Work Related Activity Group which includes disabled people who are expected to go back to work. (Support group, people not expected to work, continues to get inflation uprating)

The Government itself in its own analysis recognises that all people by definition who receive ESA have an impairment. So… the big question is, is ESA now an employment benefit in line with Jobseeker’s Allowance or is it a benefit for disabled people to help them while they look for work?

Disability Rights UK provide a damning analysis of this change – LINK

On top of this, the Government has also introduced a 12 month time-limiting of Employment Support Allowance. Disabled people on contributory Employment Support Allowance (includes people who have contributed taxes) and find themselves out of work will lose this benefit if they haven’t found a job within 12 months.  This shows total lack of consideration to the effects of disability discrimination and the fact that those who have newly acquired an impairment will spend several of those first few months just adjusting their lives.

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Guest Blogpost from Richard Lynch: Employment rights roundup

National Minimum Wage rates are to be increased for adult workers and apprentices from 1 October 2012 but current rates are to remain frozen for young workers. The adult rate will be increased by a miserly 11p to £6.19 an hour and the apprentice rate will be increased by an even more miserly 5p to £2.65 an hour. Rates for young workers will remain unchanged, at £4.98 an hour for 18-20 year olds and £3.68 an hour for 16-17 year olds. This means that all workers on the minimum wage will suffer a pay cut in real terms and it is disappointing that the Low Pay Commission (which has union as well as business representation) should have unanimously recommended the new rates. Still, realising that they will never be required to work for such a pittance, must have made the decision easier for Committee members.

State benefit rate changes from 6 April 2012 include: Jobseekers Allowance – up £2.80 a week to £56.25 for under-25s and up £3.50 a week to £71 for over-25s; Statutory Maternity and Paternity Pay – up £6.72 a week to £135.45; Statutory Sick Pay – Up £4.25 a week to £85.85. However Child Tax Credit, which had been available to parents earning up to £41,000 a year, will now be restricted to parents earning up to £26,000 (one child), £32,000 (two children) and £38,000 (three children). Working Tax Credit is also being restricted and couples with children will now have to work 24, rather than 16 hours a week to qualify.

Unfair dismissal protection could be weakened for up to 2.7 million employees following the decision to double (to two years) the qualifying period for making unfair dismissal claims to Employment Tribunals, from 6 April 2012. Even though workers in employment at that date will still be able to make claims after one year’s service, there will be a disproportionate effect on some groups, according to the TUC. These will include women working part time, employees from black and minority ethnic communities and young workers, whose length of service tends to be shorter than for the majority of employees. The coalition argues that watering down unfair dismissal protection will help boost recruitment but the TUC, rightly in our view, believes it will encourage a ‘hire and fire’ culture which will lead to increasing numbers being shown the door.  However, it shouldn’t be forgotten that short-service workers who are dismissed will sometimes be able to make ET claims on issues such as discrimination. A union member I have been representing was recently dismissed after complaining that the manager was being racist towards her. Unable to claim unfair dismissal because of short service, the member made a claim of race discrimination and victimisation (suffering a detriment as a result of complaining about discrimination). That resulted in a decent out of court settlement, despite the fact that an unfair dismissal claim could not be made.

Moving to part time work after maternity is not a legal right in the UK, although there is a right to request it and employers are supposed to give serious consideration to such requests. It is therefore encouraging to note that HSBC has announced that it will now guarantee a part-time role at current title and salary grade, if requested, to all staff returning from maternity or paternity leave. This is believed to be the first time that such a large company has offered this guarantee and it is hoped that it will increase pressure on others to do likewise. HSBC also offers 14 weeks’ maternity leave on full pay (as opposed to the statutory six weeks at 90% of pay) and up to 12 days leave for fertility treatment a year.

Parental leave rights should have been improved from 8 March 2012 but the coalition has postponed the improvement. The current rule is that employees with at least a year’s service can take up to 13 weeks’ unpaid leave (in one week units)  for each child, provided the child is under age 5, under 18 if disabled or within five years of placement if adopted. There had been EU agreement that this would rise to 18 weeks but this will not now happen until 2013.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Paying the price for recession and stagnation

It is now four years since the worst global recession for over 70 years began to impact on UK jobs – and working people are still paying a high price for it and for the stagnation which has followed it. During those four years:

  • Unemployment increased by over a million, from 1.61 million to 2.67 million, and is still increasing.
  • 2.68 million people, 10% of those employed at the start of the recession, were made redundant.
  • Underemployment doubled, with the number of people in part-time jobs because they couldn’t find full-time employment rising from 670,000 to a record 1.34 million.
  • Unemployed people made 14 million claims and repeat claims for Jobseeker’s Allowance and received JSA payments which were worth a mere 10% of average full-time earnings.

But it was not just the unemployed and underemployed who lost out, as a recent report from the Chartered Institute of Personnel and Development showed:

  • Two thirds of those who returned to employment after being made redundant found that their pay, on average, was 28% lower than before, and lower still for those who couldn’t find work on the same hours as before.
  • Those who managed to keep their jobs suffered as well because the recession and unemployment resulted in lower pay increases or none at all, and left the average worker £3,000 a year worse off than if pay had increased at pre-recession levels.
  • The cost to employers of making 2.68 million people redundant varied from sector to sector but is estimated to have cost a total of £28.6 billion.
  • And the cost to the economy, in terms of lost output, is estimated to have been at least £87 billion (6% of GDP) and possibly as high as £135 billion (10% of GDP).

All of this shows that it is not just the unemployed who have been paying a high price for the recession in jobs but people in work, many employers and the economy as well. And unless action is taken to get the economy growing again, something which did not feature in the recent budget, we will continue to pay a high price for probably years to come.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Mandatory ‘work for dole’ schemes have not gone away

The coalition’s ‘work for dole’ policy suffered a setback at the end of February when they were forced to drop benefit sanctions against young people on the Work Experience scheme. Unemployed 16-24 year olds will still be able to volunteer for placements on this scheme but, crucially, they will be able to leave it without having their Jobseeker’s Allowance cut, as had been happening previously. Despite this victory, however, there are still several other schemes where it is mandatory for the unemployed (and disabled) to work for their benefits and who will lose their benefits unless they do so.

Work Experience is the coalition’s entry-level scheme for introducing the young unemployed to the world of work (if not to the world of payment for work). It is run by Jobcentre Plus and applies to 16-24 year old JSA claimants who have been unemployed for between three and nine months. Jobcentre Plus advisers arrange the work placements, often in high street stores or supermarkets, and can authorise limited funding to help with travel or childcare. Apart from this, the only ‘pay’ is the claimant’s Jobseeker’s Allowance of £53.45 a week, or £1.78 an hour for a 30 hour week.

The Work Programme applies to JSA claimants aged 18-24 who have been unemployed for nine months or longer and to claimants aged 25 and over who have been unemployed for a year or more. It can also apply to long-term sick and disabled people who are recipients of Employment and Support Allowance (ESA), but who are viewed as having some capacity for work or who are expected to be fit for work within three months.

Participation in the Work Programme is mandatory for the above claimants and involves being referred by Jobcentre Plus to an outside ‘provider’ who is paid to help claimants get into work. The referral period lasts for two years and during that period involvement in work-related activity (which includes actual work) is mandatory.

Claimants who are required to participate in the Work Programme but fail to do so ‘without good cause’ will incur a benefit penalty. For JSA recipients, this involves a loss of benefit for two weeks for an initial failure, but this can rise to four and 26 weeks for repeated failures. For ESA recipients, the penalty is a benefit reduction of 50% of the value of the ‘work-related activity’ component of ESA for the first four weeks of not taking part (£13.37 a week at 2011/12 rates), followed by a reduction of 100% of the value for each subsequent week (£26.75 a week at 2011/12 rates). This means a loss of up to 28% of benefit for those aged 25 and over and of up to 33% for those aged under 25. Decisions on ‘good cause’ and sanctions will be made by Department of Work and Pensions (DWP) decision makers, rather than by Work Programme providers, and can be appealed.

Mandatory Work Activity is a compulsory scheme aimed at people ‘who have little or no understanding of what behaviours are required to obtain and keep work’ or, in other words, who are not considered to be doing enough to find and keep work. It can apply to anybody who has been unemployed for three months or more but the DWP has admitted that it will mainly affect claimants in the 25-49 age bracket and ethnic minority and disabled claimants.

The scheme gives Jobcentre Plus managers and advisers the authority to instruct selected claimants to participate in work placements for up to 30 hours a week for four weeks. Mandatory Work Activity is delivered by contracted specialist back-to-work providers and can include unpaid work in charities, cleaning companies, government offices and high street chains. Claimants who fail to participate, fail to complete a four week placement or lose a place due to ‘misconduct’ will be sanctioned (lose benefits) for 13 weeks. A second failure will lead to a six month sanction and a third failure could lead to a three year sanction, if welfare reform proposals currently making their way through Parliament are enacted.

When the DWP launched this scheme, they predicted that 10,000 people a year would be referred to it but over 24,000 were referred in its first six months.

The Community Action Programme is a scheme for claimants who have been out of work for two years or longer and which can involve them in having to work for their benefits for 30 hours a week for six months. Limited funding should be available for travel and childcare costs and participants are also offered help with job searching.

The DWP guidance note states that the scheme placements ‘must deliver a contribution to the local community’ and this can mean having to work in charities or other not for profit organisations working in the community. However placements can also be in private companies if some link or benefit to local communities can be shown.

Involvement in the CAP is mandatory and the same draconian benefit sanctions apply to it as apply to the Mandatory Work Activity scheme.

JobCentre Plus - frontage
JobCentre Plus - frontage (Photo credit: lydiashiningbrightly)

The coalition is planning to pump a massive £5 billion into the above schemes but is hard to see how effective they can be in an economy where unemployment is rising and an average of over five people are chasing every job vacancy. It is also hard to see how effective they can be when there is generally no requirement to provide work training, no limit on the number of placements in particular companies or workplaces and no real monitoring to ensure that employers do not abuse the scheme for their own benefit.

As the TUC’s Brendan Barber said, in relation to the young unemployed: ‘Work experience can be useful and helpful for many young people but it needs to be designed to help the young person, not to provide free labour for employers or to displace paid staff.’ It is also hard to see how schemes can be successful if other action is not being taken to kick-start the economy and get it growing again. As the Right to Work Campaign said: ‘The solution to the jobs crisis is to invest in jobs and training, reinstate the Education Maintenance Allowance and scrap tuition fees, so that instead of rotting on the dole queue the million young unemployed can get into employment or education.’

The jury is therefore still out on how effective these schemes will be and, whilst the coalition expects them to help 40% of unemployed participants into work, early indications suggest that the success rate is closer to 20%, and the National Audit Office suggests that 26% is a more likely outcome. And, of course, some participants who find work will have done so under their own steam, rather than as a result of what the schemes have done for them.

Yet there is one area where the schemes have already proven themselves a roaring success and that is in the amount of public money they have pumped into A4e, Avanta, G4S, Igneus, Serco, Working Links and all the other companies which have been taken on to provide back-to-work support to the job seekers referred to them. For example Igneus, an Australian company run by Theresa Reid (wife of ex Aussie PM Kevin Rudd) is already believed to have signed up to contracts worth £727 million. And Emma Harrison’s A4e (which is currently under investigation over alleged fraudulent activities) is believed to have signed up to contracts worth £438 million, which helps explain how Ms Harrison was able to pay herself £8.6 million in dividends in 2010.

The Work Experience and ‘work for dole’ schemes may or may not prove beneficial to jobseekers but there is already no doubt that they will prove a bonanza for the large number of private sector providers contracted to deliver them.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Unemployment figures are still dreadful

The latest Labour Market Statistics, which mainly cover the three month period to end December 2011, provide more bad news on jobs and suggest that there is worse to come.

Overall unemployment increased by 48,000 to 2.67 million over the quarter, giving an unemployment rate of 8.4%. The figure for the number unemployed was 179,000 higher than a year earlier and included 860,000 who have been out of work for over 12 months. The number unemployed for two years or more was 423,000 over the same period.

Male unemployment increased by 16,000 to 1.55 million and female unemployment increased by 32,000 to 1.23 million. Youth unemployment increased by 22,000 to 1.04 million, giving an unemployment rate for 16-24 year olds of 22.2%.

unemployment
unemployment (Photo credit: Sean MacEntee)

The number of people working part-time because they could not find a full-time job increased by 83,000 to 1.35 million over the quarter, the highest figure since comparable records began 20 years ago.

The number of ‘economically inactive’ people fell by 78,000 to 9.29 million, giving an economic inactivity rate of 23.1%. (Economically inactive people are 16-64 year olds who are not working but who are not included in the unemployment figures because they had not been looking for work over the previous four weeks and were not available to start work within the following two weeks. They include the long-term sick, home makers, early retirees and those who have simply given up trying to find work.)

The number of Jobseeker’s Allowance claimants increased by 6,900 in January 2012 to 1.6 million, giving a claimant count of 5%.

The number of job vacancies increased by 11,000 to 476,000 in the three months to October 2011, but this still left an average of over 5.6 unemployment people chasing every vacancy.

According to the Financial Times, most economists expect unemployment to rise further over the coming months, with many predicting a peak of 2.8 or 2.9 million.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blogpost from Richard Lynch: Job destruction shows no sign of easing

Unemployment is now higher than it was at the worst point of the recession and odds are shortening that it will match Thatcher’s three million in the next year. The latest figures, from the January Labour Market Statistics, are for the three months to the end of November 2011 and show the following:

 

Overall unemployment increased by 118,000 (1,300 a day) to 2.68 million, giving an unemployment rate of 8.4% – the highest since John Major was Prime Minister 17 years ago.

The number unemployed for over a year was 857,000 and the number unemployed for over two years was 424,000.

 

Youth unemployment continued to rise, with an increase of 52,000 to 1.04 million, making the unemployed rate for 16-24 year olds 22.3%.

 

The number of unemployed people claiming Jobseeker’s Allowance rose, although by a more modest 1,200, to 1.6 million, giving a claimant count of 5%.

 

The inactivity rate (16-64 year olds who are not working but are not included in the unemployment figures) fell slightly to 23.1% but that still leaves 9.29 million people, including home makers, long term sick, early retirees and those who have simply given up trying to find work, in this category.

 

The number of people in part time employment rose to 7.86 million, and the number working part–time because they couldn’t find a full-time job rose to 1.31 million, the highest figure for 17 years.

The number of self-employed people also rose, to a record 4.14 million, as more people are forced to go self-employed after failing to find a job or because employers are increasingly changing employees’ contracts to self-employed, so they can get out of paying the minimum wage, statutory holidays, sick pay and NI contributions.

The word “rose” features a lot in this article but there’s nothing rosy about the picture it paints on unemployment and under-employment in Britain today. And all the signs are that things are going to get a lot worse.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

Guest Blog Post: Richard Lynch on the worst unemployment for 17 years

The announcement, earlier in the winter, that 80,000 people had applied for the 18,000 temporary Christmas jobs advertised by Royal Mail, showed how bad unemployment has become under the coalition – and the latest Labour Market Statistics have confirmed it. These showed, amongst other things, that there are now more people out of work than at any time since 1994, when John Major was Prime Minister, and that youth unemployment is now higher than at any time since the 1980s, when Thatcher was in power. And all the indications are that it is going to get worse.

According to the statistics (which mainly cover the quarter to end September 2011):

  • Overall unemployment increased by 129,000 to 2.62 million, or 8.3% of the economically active population, the highest figure for 17 years.
  • The number of people unemployed for over a year increased by 31,000 to 868,000 and the number unemployed for over two years increased by 13,000 to 422,000.
  • Unemployment amongst 16-24 year olds increased by 67,000 to 1.02 million, giving a youth unemployment rate of 21.9%. This is the highest youth unemployment has been since 1992 when current records began, but previous records suggest that the figures haven’t been this high since the mid 1980s.
  • The number of economically inactive people (not included in the unemployment statistics) increased by 64,000 to 9.36 million, or 23.3% of 16-64 year olds.
  • The number of people claiming Jobseeker’s Allowance (JSA) increased by 5,300 to 1.6 million, giving a claimant count of 5%.
  • The number of job vacancies increased by 7,000 to 462,000, leaving 5.67 unemployed people chasing every vacancy. Haringey in north London (where the summer riots began) is the hardest place in Britain to find a job, with 22.6 dole claimants chasing every vacancy. Lewisham in south London is the second hardest place to find a job, with 21.9 claimants chasing every vacancy.

The coalition is blaming everybody but themselves for this disaster and is shedding bucket loads of crocodile tears for unemployed youth in particular. Their Work Experience Programme is supposed to help young people into work by providing unpaid work experience in supermarkets and other big businesses to young JSA claimants. However, it has recently emerged that anybody accepting an unpaid placement on this scheme will have to continue working for eight weeks, for their JSA payment only, unless they opt out of the programme in the first week. And if they do leave, they can have their Jobseeker’s Allowance cut. So much for slavery being abolished!

*Update: October’s statistics have been published since the above article was written. These show that unemployment has risen again, by 128,000 to 2.64 million.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

GUEST BLOG POST FROM RICHARD LYNCH ON UNEMPLOYMENT

Unemployment goes from bad to worse

Unemployment in Britain is now at its worst for 17 years, youth unemployment is at its highest since records began and 10% of Londoners are out of work. These are just some of the unacceptable features of the October Labour Market Statistics and all the indications are that things are going to get worse rather than better over the coming period.

The statistics show that:

  • Overall unemployment increased by 114,000 to 2.57 million (8.1% of the economically active population) in the three months to end August. This is the highest unemployment Britain has seen since October 1994, when the last Tory government was in power.
  • Unemployment amongst Jobseeker’s Allowance claimants increased (for the seventh month in a row) by 17,500 to 1.6 million, giving a claimant count of 5%.
  • Unemployment amongst 16-24 year olds increased by 74,000 to 991,000, giving a youth unemployment rate of 21.3% – the highest figures since comparable records began in 1992.

Other groups who were also badly hit included workers aged 65 and over whose numbers fell by 74,000, the biggest fall in workers of that age group since records began in 1992. (This was largely due to employers pushing out older workers before the October abolition of the 65 default retirement age.) Public sector workers were also hard hit, with employment in that sector falling by 111,000 to 6.04 million. Part-time workers were hard hit as well, with the number of such workers falling by 175,000 to 7.7million.

In addition to this, the number of economically inactive people (not included in the unemployment figures) increased by 26,000 to 9.35 million, giving an inactivity rate of 23.3%. These figures, which this newsletter has not highlighted before, include 2.32 million looking after homes and families, 2.28 million students, 2.16 million long-term sick, 1.57 million retired people below the age of 65 and others who are temporarily sick or who have simply given up trying to find work.

The number of job vacancies in the economy increased by 1,000 to 462,000 but this still leaves an average of 5.56 unemployed people chasing every job.

The Chartered Institute of Personnel and Development, by no means a left-wing or anti-business organisation, described the latest figures as ‘truly horrific’ and pointed out that one in three unemployed people have now been out of work for over a year. It also pointed out the damage being done to the economy by the destruction of almost a quarter of a million public sector jobs in the coalition’s first year in office. The Institute made what was for them a remarkably radical (and sensible) call for the coalition to temporarily halt further public sector job cuts, which they described as an ‘own goal’ at a time of high and rising unemployment and economic stagnation.

Richard Lynch is a Dudden Hill resident. He is a retired Unite the Union official and currently conducts voluntary work on employment rights for the Brent Community Law Centre. He also acts as an accompanying representative for the GMB union.

A worrying trend in Brent

I have come across a worrying fact through the Partnersip and Place Overview and Scrutiny Committee, of which I am a member. Since January 2009, the amount of women seeking JobSeeker’s Allowance (JSA) in Brent has doubled.

More work needs to be done to help people find sustainable employment. For this, we need investment and to encourage economic growth. Not slash and burn and risk the economic recovery by trying to cut the deficit to fast.