By Maeve McGoldrick
Last last year we launched a campaign for government to increase the £5 earnings cap for people moving off benefits into work. It means that people getting part-time jobs as a first step back into work often end up worse off than had they stayed on benefits – a huge barrier to finding work, say the jobseekers we support every day.
Our campaign was backed by a huge number of grassroots charities working with unemployed people, as well as big names like Oxfam and the TUC. And it was nice to add another name to the list of people calling for the same this week, when Policy Exchange released a report calling for the earnings disregard to be raised to £92 (more generous than our £50 ask, but we won’t quibble about that).
Since we launched the campaign, government announced a ‘better off in work credit’ ensuring that someone taking a job over 16 hours a week is at least £40 better off than had they stayed on benefits (even though DWP’s own analysis of the pilot project concluded it wasn’t very successful). Crucially however, this doesn’t hold for people working less than 16 hours a week.
Meanwhile we have met with Jim Knight MP, Minister for Welfare Reform, who expressed an interest in the idea of increasing earnings disregards, and asked us and a coalition member OSW to put together a proposal for raising the Earnings disregard to £50 for people on Jobseekers Allowance. We looked at what the qualifying period should be: 6 months, 9 months or 12 months? And if there should be a time limit on this. Aware that there is great resistance in the Treasury it is unlikely that we will get an increase for all Jobseekers Claimants immediately, however by asking for it for the most vulnerable people – those further away from the labour market – we hope that it will be a gradual process to changing the rules around a disregard that has not changed in over twenty years! We really welcome Policy Exchange’s report as it raises the debate on the need for change, however, if we get it then the devil will be in the detail.