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What’s become of ‘Freud’s law’?

The March/April 2014 issue of Adviser magazine, published by Citizens Advice, highlights the problem of benefit sanctions and a 64 per cent increase in their use between July and September 2013. Here, the Benefits Legal Group highlights how the law on sanctioning is not being followed.

The rise in sanctions detailed by Citizens Advice (CAB) shows that the Department of Work and Pensions (DWP) is ignoring welfare minister Lord Freud’s important statement on how the law is meant to operate.

Sanctions – the background

A growing range of sanctions has been used to cut the benefits of Jobseekers’ Allowance (JSA) claimants since 2009. Sanctions are, effectively, administrative punishments applied to unemployed people for failures and omissions when searching for a job.

Former Army Sergeant Mr S was claiming JSA after being made redundant. He was wrongly sanctioned in May 2009 for not signing on at the same Job Centre that had ordered him to attend a course that ran at the same time.

His appeal hearing on 1 September 2009 before the Lower Tier Tribunal sitting at Cambridge lasted just over 10 minutes, so glaring was the DWP’s error. But it took five months to correct it, during which time further mistakes were made with his benefits claims. Correcting these and fully restoring all the benefits Mr S was entitled to, took 10 months. He received £75 in compensation. Numerous other claimants have found themselves in similar positions in the last five years.

From 2012, sanctions can be imposed for any period between a week and three years, during which time JSA and other benefits are stopped. Unfortunately, they have proved to be a very blunt instrument. They have also been badly administered: the system has punished many people who should not have been sanctioned. Sanctions also cause havoc with the payment of other benefits. Typically, when JSA is cut off, an alert is sent to computer systems administering other benefits claims, which are also being terminated. For example, a Housing Benefit (HB) claim should not be affected by JSA sanctioning, but frequently when a job seeker’s claim has been sanctioned, local authorities stop HB as well.

Freud’s Law – disregarded

These problems and the case of Mr S were brought to the attention of welfare minister Lord Freud in 2011. In response, he stated the Government’s intentions in respect of welfare decisions and how the rules were to be followed:

Decision-makers will be required to follow guidance when applying the law to the facts of the case where they consider a decision about a claim, sanctions for non-compliance with work-related requirements, a civil penalty or the recovery of overpayment. We spoke about the Wednesbury [1] principles at our seminar; decision-makers will have to consider all relevant matters raised by the claimant within a particular time period, including information about a claimant’s health condition and financial circumstances. I accept that there is room for improvement here, and we will make that improvement.’ (Hansard, 25 January 2012, Col 1061)

Effectively, Lord Freud set out the legal principles for the lawful imposition of sanctions on benefits, whereby financial and other circumstances have to be considered. (This could be called’ Freud’s Law’.) The system has been very slow to follow Lord Freud’s direction – and the rise in sanctions over the last two years shows it must be being ignored altogether.

As the Adviser article confirms, more people are having their benefits hit by sanctions – many of them unlawfully imposed in breach of the principles set out in Hansard. In a CAB survey, 40 per cent of claimants sanctioned had not received a letter from the job centre informing them of the sanction, 23 per cent did not know why they had been sanctioned and 63 per cent had been left with no income. Anyone affected in such a way would have grounds to appeal to the Social Security Lower Tier Tribunal on the basis that the sanction was unreasonable, unlawful and in breach of the principles stated by Lord Freud.

Problems are particularly acute with people who have been made redundant or fallen ill suddenly (not to mention those leaving hospital or an institution) and are unfamiliar with the modern intricacies of claiming benefits. These people need help – and it explains the rise in the numbers of people having to seek help from food banks.

Overturning a sanction can take months to go through the Tribunal system; the payments of rents, mortgages and essential family bills all get compromised when this happens.

Impact on the Work Programme

Ironically, the imposition of sanctions also hits the Government’s own Work Programme (WP). Outsourced providers complain that claimants fall off schemes and do not attend when required. However, if their benefits have been cut off by sanction, the same claimants cannot travel to Work Programme placements or communicate when they have run out of money and have no means of topping up their phones.

As claimants cannot attend interviews or participate, the WP provider then does not get paid as the claimant does not get a job. The end result is the whole programme fails, apart from the fact that people are not counted as officially unemployed when they
are subject to a sanction. Could the reason for allowing sanctions to be applied so recklessly be that it disguises the number of people listed as unemployed?

The Benefits Legal Group is developing an application pack to help people who have been wrongly sanctioned to get through the administrative processes and to speed up the resolution of such cases.

The following letter can be used as an interim appeal letter to a job centre within one month of being sanctioned. (To find your local JobCentre Plus, visit http://bit.ly/1hhsCOB and enter your postcode.)

Download a pro-forma letter to appeal a benefits sanction.

It is also a good idea to send a copy of the letter to your Member of Parliament and ask him/her to find out why the principles laid down by Lord Freud are not being followed. (To find out who your MP is, visit http://www.theyworkforyou.com/, enter your postcode in the box ‘Your representative’ and you will find the name. Send the letter to your MP, The House of Commons, Westminster, London SW1A 0AA.)

And please contact us to let us know how you got on!


1 Principles on the lawful use of discretionary powers laid down in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223 [Back]

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What’s become of ‘Freud’s law’?