Benefits sanctions are adding to bleak prospects for young people

11th Sep 2014

Sanctions are having unintended consequences and may increase the risk of young people living in poverty, says Beth Watts.

The rapid escalation in the use of sanctions under Job Seekers Allowance (JSA) and Employment and Support Allowance (ESA) has been surrounded by controversy recently.

Monthly JSA sanction rates have risen from 2 per cent to 2.5 per cent of claimants from 2000 to 2006, to 6 per cent by late 2013, and now stand over 7 per cent. While the number of ESA claimants affected by sanctions is small by comparison, a rapid increase in sanctioning of those claimants in the ‘work-related activity group’ is now also evident.

Negative consequences of benefit sanctions include significant hardship, and in some cases, destitution. While international evidence shows that sanctions – especially severe sanctions – substantially raise exits from benefits, and may also increase short-term job entry, longer-term outcomes for earnings, job quality and employment retention appear unfavourable, as a new report for JRF shows.

The disproportionate impact of sanctions on vulnerable groups (lone parents, disabled people, homeless people) has increasingly been recognised. The Government recently outlined its intention to find better ways to work with these claimants and introduced ‘easements’ of work requirements for some homeless JSA recipients. The Lib Dems have suggested they will introduce a final warning ‘yellow card’ before sanctions are imposed.

What has gained less mainstream political attention is the fact that under-25s face a substantially higher risk of being sanctioned than older adults, with 8 per cent of this age group now affected per month, compared to around 5.5 per cent of all claimants.

The reasons for this are not entirely clear. It may be that younger claimants have a more relaxed attitude to sanctioning, as they are more able than older claimants to rely on family support. Younger claimants may also tend to have more chaotic lifestyles that make meeting behavioural conditions difficult. It is also possible that this group faces direct or indirect discrimination within the benefit system, leaving them vulnerable to sanctioning even if they are equally ‘compliant’.

Whatever the explanation, the disproportionate impact of sanctions on under-25s clearly gives cause for concern, especially when this group faces significant challenges in other areas, with high rates of youth unemployment, real declines in earning and high rents.

This heightened risk of sanctioning may also be seen as a prelude to the gradual removal of benefit entitlement from all but the most obviously vulnerable young people. Last year, the Prime Minister suggested that if a majority Conservative Government is elected in May 2015, it would seek to prevent under-25s from claiming housing or unemployment–related benefits under an “earn or learn” policy. Labour has also announced plans to introduce restrictions on young people’s entitlements if they win the next election.

These developments suggest a need to urgently revisit the question of how young people in poverty's transitions into adulthood can be best supported.