Out-of-work benefits

The real value of out-of-work benefits for families with children rose sharply between 1998/99 and 2003/04 then continued to rise more slowly until 2013/14.

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Link to source: Institute for Fiscal Studies

Changes to in-work and out-of-work benefits and tax credits have been an important factor in falls in poverty among some groups of working-age people with children over the last 20 years.  

The real value of out-of-work benefits for families with children rose sharply between 1998/99 and 2003/04 and continued to rise more slowly until 2013/14, meaning that the value of these benefits increased by more than inflation. This contributed to the fall in child poverty over that period. Since then, their real value has decreased slightly. From 2013 the majority of working-age benefits and tax credits were restricted to rises of 1% a year, before being frozen in 2016.

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Link to source: Institute for Fiscal Studies

Between 1994/95 and 1998/99 benefits fell in relation to average income. They then rose until 2012/13 before falling back. The rising value of out-of-work benefits for families with children contributed to poverty reductions and helped to protect them from the effects of the Great Recession. However, falls in recent years are contributing to rising poverty.

For working-age adults without children, the value of out-of-work benefits has generally kept up with changes in prices, but has steadily declined comparison with average incomes, meaning that those dependent on them have faced an increased risk of poverty

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Link to source: Income-related benefits

From 2009/10 to 2015/16 there was a greater uptake of Income Support and Employment and Support Allowance (ESA) and Housing Benefit than Jobseeker’s Allowance (JSA) and Pension Credit among those entitled to claim these benefits. For example, around one out of every two families who were entitled to JSA in 2015/16 claimed it, while roughly four out of five families who were entitled to Income Support, ESA and Housing Benefit in 2015/16 claimed these benefits.

The benefit take-up rates have remained largely stable since 2009/10 for most of these benefits. However, one exception is JSA where the proportion of eligible families claiming JSA has fallen from 69% in 2009/10 to 56% in 2015/16.

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Link to source: Benefit sanctions statistics

More than one million Jobseeker’s Allowance, Employment and Support Allowance, Universal Credit and Income Support claimants have to show that they are complying with conditions of benefit receipt. If claimants are found to have breached these conditions they can be sanctioned, meaning that their benefits are reduced or suspended.

The numbers of people experiencing sanctions has varied greatly over time. The numbers were fairly stable until 2009 when there was a very large increase, nearly trebling to reach a high point of nearly 80,000 in late 2013.  This was not simply because more people claimed the benefit – the percentage of claimants being sanctioned rose from 2% in 2000 to more than 3% in 2007, dropped back in 2009 and then rose to more than 5% in 2014, before falling back to 3% in 2015.  After this the numbers dropped sharply, returning to their 2005 levels. In 2016 there was another sharp increase with numbers reaching just under 30,000 people, more than 3% of claimants.