Fears Universal Credit to be scrapped for millions in Autumn Statement | Personal Finance | Finance

Benefit claimants who “refuse” to engage with their Jobcentre or take on work offered to them will face losing financial support, under new plans which are due to be announced in the Autumn Statement next week.

The crackdown forms part of Chancellor Jeremy Hunt’s “back to work plan”, with £2.5billion worth of funding over five years to tackle the nation’s decline in workforce participation since the pandemic.

But the charity Mind says the new rules will push more people away from work as it has a devastating impact on their mental health.

Under a plan that will need parliamentary approval, those who are just in receipt of the standard Universal Credit allowance will have their claims closed if they refuse work and engagement with the Jobcentre after six months. Sanctions may also result in access to additional benefits, such as free prescriptions and legal aid, revoked.

Mandatory work placement trials will be rolled out if a claimant is still not in work after 12 months, to “improve” their employability prospects. Ministers are also planning to trial reforms to the fit note process to make it “easier and quicker” for people to get specialised work and health support.

Plans set out also include expanding key health and employment programmes to help those with mental health conditions stay in or find work, such as further investment in therapy.

Vicki Nash, associate director for policy and campaigns at mental health charity Mind, said: “Poverty and mental health problems form a vicious cycle that needs to be tackled by every part of Government working together. [The] announcements look like they have come from departments working on different planets.

“We welcome the UK Government making real investment into empowering more people with mental health problems to find work in a way that supports them to get better. And with close to two million people on waiting lists for mental health treatment, investing in talking therapies is the right move.”

However, Ms Nash noted: “The increase in the use of sanctions is deeply worrying though – evidence has repeatedly shown they don’t work and make people’s mental health worse. Changes to sick notes will also make it tougher to be signed off from work and could mean people don’t get the time they need to recover.

“The investment announced shows that the Government knows the answer to tackling the number of people struggling with their mental health is to increase, not decrease support. Yet the support being offered doesn’t match the scale of the need and is undermined by a raft of other decisions announced.

“And if expected changes to work capability assessments are confirmed in next week’s Autumn Statement, we will see more people pushed further from work because of their mental health.”

Ben Harrison, director of the work foundation at Lancaster University added: ““At a time of record sickness levels and persistent worker shortages, the Government should be focused on tackling the drivers of ill health, while supporting those with long-term conditions who want work to find a job that is right for them.

“Pushing people into ‘any job’ will not alleviate worker shortages that some sectors are facing. It is vital the Government’s offer provides adequate support some of the most vulnerable people in society into good quality, secure and long-term employment.

“The offer must focus on tailored support for jobseekers with different needs, and a renewed drive to work with employers to increase the quality of jobs on offer. Instead, threatening to revoke access to elements of NHS provision such as free prescriptions would represent a dangerous precedent and risk heightening the anxiety those who are unable to work due to ill health already feel.

“The Government’s previous proposals to push people into ‘any job’ have not resulted in long-term results – and the DWP’s own evidence from 2020 suggests sanctions are not effective and slow people’s progress back into work.”

According to the Treasury, the number of people not seeking work has sharply risen since the pandemic, which is having a negative impact on the economy.

It said there is now a record 2.6 million people inactive in the UK due to long-term sickness or disability, with mental health, musculoskeletal conditions and heart disease being some of the main causes.

Meanwhile, 300,000 people have been registered as unemployed for over a year in the three months to July.

The reforms aim to see no claimant reach 18 months of unemployment in receipt of their full benefits if they have not taken “every reasonable step” to comply with Jobcentre support.

Jeremy Hunt, Chancellor of the Exchequer, commented: “We’re serious about growing our economy and that means we must address the rise in people who aren’t looking for work – especially because we know so many of them want to and with almost a million vacancies in the jobs market the opportunities are there.

“These changes mean there’s help and support for everyone – but for those who refuse it, there are consequences too. Anyone choosing to coast on the hard work of taxpayers will lose their benefits.”

Mel Stride, secretary of state for work and pensions, said: “We are rolling out the next generation of welfare reforms to help more people start, stay and succeed in work. We know the positive impact work can have, not just on our finances, but our health and well-being too.

“So we are expanding the voluntary support for people with health conditions and disabilities, including our flagship Universal Support programme.

“But our message is clear: if you are fit, if you refuse to work, if you are taking taxpayers for a ride – we will take your benefits away.”

The Chancellor will announce the Autumn Statement on Wednesday, November 22.