Over a million workers could face benefit cuts

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benefit cuts

benefit cutsAs many as 1.2 million working adults could lose some of their benefits if they do not comply with new state requirements to be introduced next year.

Until now benefit sanctions have only applied largely to those out of work. However, under the changes, claimants who earn under certain amount of money each week will have to work longer hours, find an additional job or seek higher wages.

Based on figures supplied by the Department for Work and Pensions (DWP), the Resolution Foundation thinktank estimates about 700,000 single people will be affected, as well as 500,000 who are living as part of a couple.

Conditions

The new sanctions regime is an unprecedented by-product of the Government's decision to introduce universal credit, merging most existing means-tested benefits and tax credits together into a single system.

Conditions will be set on payments to many working claimants who earn less than the weekly equivalent of the minimum wage - £212.80p for a single person.

There are currently 1.4 million people working part-time because they are unable to find full-time work - compared to 500,000 in 2004.

Claimants will be expected to meet a new, higher conditionality earnings threshold, equivalent to 35 hour week at national minimum rates through a combination of measures. This can be achieved by increasing their hours or their hourly wage with their current employer,finding one or more additional jobs alongside their existing employment or finding a new job with a higher income.

The overriding aim is to increase the incentives to work but in reality it means that people will lose money if they don't find extra work, even if there is none available where they live.

Unchartered territory

With double the number of claimants expected to be subjected to potential sanctions, the Resolution Foundation questioned whether the DWP jobcentre advisers have the capacity to cope.

It also expressed concern that little has been said about how a fair, consistent and adequately resourced conditionality system for working claimants will be implemented.

There is a little over a year until the sanctions are implemented, so it is important to figure out a plan of action if you are one of the people set to be affected.

Training and learning new skills could help you get a job with a better income, while finding additional employment which allows you to work from home could help you achieve the new earnings threshold.

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