Universal Credit: why are sanction rates higher?
Sanction rates are higher under Universal Credit, the Government's flagship welfare reform, than under the benefits it is replacing. In December 2017 around 0.3% of JSA claimants were currently under a sanction compared to 8.2% of Universal Credit claimants required to search for work though, in the case of UC, this rate has since fallen to 5.3% as of May. This higher rate of sanctioning, the DWP argues and our new analysis corroborates, is due to the way DWP deals with claimants who miss a work-search interview without good reason under Universal Credit compared to under JSA (one of UC's predecessors). Despite this analysis, however, there are still a number of questions relating to sanctions under Universal Credit that we cannot yet answer.
Sanctions are more prevalent under UC than JSA. In December 2017 around 0.3% of JSA claimants were currently experiencing a sanction compared to 8.2% of UC claimants required to search for work (though note this rate fell to 5.3% in May 2018; equivalent data is not yet available for JSA).
DWP argues this higher rate of sanctioning is because when claimants miss an advisor interview under UC they are sanctioned, whereas under JSA their benefit is simply stopped.
To test this statement we can analyse UC live service sanctions by reason. Between November 2017 and April 2018 around 87% of UC live service claimants sanctioned were so due to failing an interview requirement. In comparison, under JSA 28% of sanctions were due to failing to attend or participate in an advisor interview.
If we ignore sanctions under JSA and UC due to failing to comply with an interview, sanction rates under the two benefits look much more similar.
It’s worth noting, however, that this requires us to ignore the vast majority of UC sanctions. We cannot say whether these trends are true of the UC full services also, for which sanction decisions data is not available. Neither do we know what the impact of this higher rate of sanctioning is on claimants or their ability to find employment.