In a move dubbed the most extensive welfare shake-up in a decade, Chancellor Jeremy Hunt has confirmed a series of reforms targeting unemployed benefits claimants who refuse to actively seek employment.

The changes, set to be implemented as part of the government’s commitment to rebalance the social contract in favour of taxpayers, include stripping individuals of additional benefits perks if they fail to engage in job-hunting efforts within a specified timeframe.

Under the new policy, unemployed individuals relying on state handouts must actively pursue employment opportunities. Failure to do so will result in the loss of rights to free prescriptions and discounted bus travel after six months of non-compliance.

The reforms also introduce a mandatory job placement or “intensive activity” for those who have not secured employment after 18 months.

A “very big change”

Chancellor Jeremy Hunt emphasised the significance of this shift, describing it as a “very big change in the social contract” aimed at favouring taxpayers who contribute to the welfare system. To support the transition back into the workforce, the government plans to allocate an additional £2.5 billion to various support schemes over the next five years.

Work and Pensions Secretary Mel Stride highlighted that the reforms should be viewed as a “huge investment” in employment rather than a cost-cutting measure. However, exemptions will be made for individuals facing domestic abuse or those deemed especially vulnerable.

The overhaul extends to claimants on the basic rate of Universal Credit who, despite being fit to work, refuse engagement for six months. Their claims will be closed, leading to the forfeiture of additional benefits such as free NHS prescriptions, dental care, legal aid, and transportation discounts.

300,000 unemployed for over a year

The government has not provided an estimate for the number of claimants that may be affected. Still, recent data reveals that 300,000 people were unemployed for over a year in the three months leading to July.

In addition to these changes, the government plans to digitise the system for tracking claimants’ attendance at job fairs and interviews to streamline the application of sanctions for non-compliance.

While the government asserts these reforms as crucial for economic growth, critics argue that they represent a failing approach that does not adequately address the root of the unemployment issue. The Labour Party’s Shadow Work and Pensions Secretary, Liz Kendall, commented, “A healthy nation is critical to a healthy economy. But look beneath the bonnet of today’s announcement and you will see more of the same: a failing approach that doesn’t even scratch the surface of the problem.”

The government plans to further unveil reforms to the fit note system next week, with a focus on “improved triaging and signposting.” Additionally, there is speculation about a potential cut to the welfare budget if benefits increases are linked to October’s inflation figure rather than the higher September rate.

 

 

 

 

Amelia Brand is the Editor for HRreview. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.