Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Number of people hit with benefit sanctions doubles

Pensions



Reasons for someone having their benefits reduced include not attending a work-related interview, failing to start a new role, or refusing a job offer

The number of people having their benefits sanctioned has more than doubled compared to before the pandemic. Department for Work and Pensions (DWP) figures show 78,672 people on Universal Credit (UC) across Britain were carrying a sanction in February.

That was 3.9% of claimants who could have them applied, and well up from 31,129 (2.4%) in the same month of 2020, pre-pandemic.

The data could include some sanctions that go on to be overturned and repaid, although any such number is likely to be small as figures suggest relatively few are challenged.

Reasons for someone having their benefits reduced include not attending a work-related interview, failing to start a new role, or refusing a job offer. The length and severity of the punishment depends on the reason for it being imposed and whether someone has been penalised before.

The cuts were largely halted in the early stages of the pandemic as job centres shut their doors and the Government focused on dealing with soaring demand from new claimants. However, the number of people across Britain seeing their UC claim reduced started rising again last summer and has now hit record levels.

Ministers recently announced new rules for some jobseekers on UC meaning they will have to search for jobs outside their chosen field from the fourth week of their claim, instead of after three months, and can be punished for failing to do so.

The changes come as labour market shortages cause problems for various industries such as the aviation sector, which has struggled to meet demand from travellers as Covid restrictions ease.

The Office for National Statistics also recently revealed there were more job vacancies than unemployed people in the UK for the first time on record earlier this year.

But Caroline Selman, benefit sanctions researcher at the Public Law Project, said the penalties could be ‘disastrous’ for people’s mental health.

She added: Second, even though only a small proportion of sanctions are challenged, according to the latest available figures there is a high success rate when they are.

This suggests many wrongly made UC sanctions go uncorrected. This leaves vulnerable people unfairly out of pocket. When someone is sanctioned they can lose up to 100% of their standard allowance, potentially indefinitely. If you are already on or below the poverty line, this can be devastating, she said.

A DWP spokesperson said: We understand that people are struggling with rising prices which is why we have acted to protect the 8 million most vulnerable British families through at least £1,200 ($1,503.54) of direct payments this year. Sanction levels are proportionate to our larger pandemic caseload and people are only sanctioned if they fail, without good reason, to meet the conditions they agreed to.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.



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