Oldham Liberal Democrats opposed to Waiting Day Changes that hurt Claimants

The Leader of the Opposition and of the Liberal Democrat Group on Oldham Council, Cllr Howard Sykes, has expressed his opposition and that of colleagues to changes proposed by Tory Secretary of State for Work and Pensions Ian Duncan-Smith that benefit claimants should wait seven days for benefits rather than three at present.

The changes if implemented will mean that from October 2014 new claimants for Job Seekers’ Allowance (JSA) and Employment Support Allowance (ESA) to wait seven days rather than three days before being paid any benefit.

A similar proposal to save money was also made by the then Labour Government in 1998, but following representations the proposal was withdrawn.

Cllr Sykes has written to the Secretary of the Social Security Advisory Committee, an important parliamentary body that advises the Government on social security matters.

The committee has been asked to conduct a public consultation on the proposed waiting days’ amendment, with a closing date for responses of Friday 13th June, prior to making a recommendation to the Secretary of State as to how to proceed.

In his letter, Cllr Sykes expresses his hope that our representations in this instance will help lead the committee to recommend to the Secretary of State that this proposed amendment also be abandoned.

The Liberal Democrat Group is concerned that JSA claimants will lose £40 on average, while disabled people claiming ESA will lose £50.

The Government’s own estimates indicate that 1.3 million people a year will lose out.

Claimants leaving work through dismissal or made redundant after short periods of employment will receive no statutory compensation from their employer on the termination of their contract; they may therefore have no immediate sources of ready cash to meet day to day needs.

In Oldham, a significant number of claimants already report that delays in processing their claim for benefit place them in financial hardship.

The Liberal Democrats are concerned that this change in policy may oblige newly-unemployed people to turn to ‘loan sharks’ or short-term sub-prime lenders to borrow money to survive, paying exorbitant rates of interest, or to food banks in order to eat.

The Liberal Democrats are convinced that this change will in no way assist unemployed people to find employment; on the contrary evidence suggests that where unemployed people have no income for immediate needs they focus on securing that income rather than on job-seeking.

As Cllr Sykes also believes the new measure will be counterproductive:

“This change will make it less likely that jobseekers will accept offers of short-term employment as they may be penalised twice when they sign back on”.

Nor does it reward those who as employees make National Insurance contributions.

Cllr Sykes added:

“The change is grossly unfair on new claimants making a claim on the basis of National Insurance contributions. These claimants are only entitled to benefit for a maximum of six months and are thereafter disbarred from receiving benefits because of savings or spousal earnings.

This change will eat into this entitlement by a further four days, providing yet more evidence that National Insurance is in fact a tax in all but name rather than a real passport to benefit entitlement”.

Copy of Cllr Sykes’ response below:

Sent: 12 June 2014 09:50
To: ssac@dwp.gsi.gov.uk
Cc: Howard Sykes
Subject: FW: FAO Ms Denise Whitehead, The Committee Secretary Re: Consultation on the Social Security (Waiting Days) Amendment Regulations 2014

Dear Mrs Whitehead

I am writing to you as Leader of the Opposition and of the Liberal Democrat Group on Oldham Council.

The Liberal Democrat Group notes with great concern the recent proposal by the Secretary of State for Work and Pensions, The Rt. Hon Ian Duncan Smith MP, to require new claimants for Job Seekers’ Allowance (JSA) and Employment Support Allowance (ESA) to wait seven days rather than three days before being paid any benefit from October 2014.

We note that a similar proposal was made by the then Labour Government in 1998 in order to save money, but following representations the proposal was withdrawn.
We hope that our representations in this instance will help lead the committee to recommend to the Secretary of State that this proposed amendment also be abandoned.

The Liberal Democrat Group is concerned that JSA claimants will lose £40 on average, while disabled people claiming ESA will lose £50.

The Government’s own estimates indicate that 1.3 million people a year will lose out.

Claimants leaving work through dismissal or made redundant after short periods of employment will receive no statutory compensation from their employer on the termination of their contract; they may therefore have no immediate sources of ready cash to meet day to day needs.

In Oldham, a significant number of claimants already report that delays in processing their claim for benefit place them in financial hardship. By obliging new claimants to wait longer, this policy has the potential to make newly unemployed people turn to ‘loan sharks’ or short-term sub-prime lenders to borrow money to survive, paying exorbitant rates of interest, or to food banks in order to eat.

The Secretary of State’s proposed amendment will in no way assist unemployed people to find employment; on the contrary evidence from a number of sources indicates that where unemployed people have no income for immediate needs they focus on securing that income rather than on job-seeking.

This change also has the potential to deter jobseekers from accepting offers of short-term employment for who is going to take short-term employment contracts if they are obliged to serve another 7-day waiting period on resubmitting their claim (‘signing back on’)?

Furthermore the change is grossly unfair on new claimants making a claim on the basis of National Insurance contributions. These claimants are only entitled to benefit for a maximum of six months and are thereafter disbarred from receiving benefits because of savings or spousal earnings.

This change will eat into this entitlement by a further four days, providing yet more evidence that National Insurance is in fact a tax in all but name rather than a real passport to benefit entitlement.

I trust that the Committee will take the Oldham Liberal Democrat Group’s views into account when making its recommendations to the Secretary of State, and in due course we look forward to hearing further from you about your deliberations.
Yours sincerely

Councillor Howard Sykes

Leader of the Opposition
Leader of the Liberal Democrat Group Oldham Council
Member for Shaw Ward
Member for East Ward Shaw & Crompton Parish Council
Home: 5 Ballard Way, Shaw, Oldham OL2 8DU
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E: howard.sykes@oldham.gov.uk
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Twitter: @Howard_Sykes