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RESEARCH INTO GOVERNMENT'S WORK INCENTIVE MEASURES

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A major research study, commissioned by the DSS, explores the barriers to people trying to move off Income Support ...
A major research study, commissioned by the DSS, explores the barriers to people trying to move off Income Support and looks at ways of making the transition into work easier.

The report - 'Moving off Income Support: Barriers and Bridges' - by the Centre for Research in Social Policy (CRSP) at Loughborough University, is published today.

Commenting on the research and the action taken in response to its findings, Roger Evans, parliamentary under-secretary of state for social security, said:

'We asked CRSP to find out what people saw as barriers to moving out of unemployment. This shows our commitment to address the real problems of benefit dependency and to take positive steps to tackle them. Drawing on this research we have introduced a range of work incentive measures designed to resolve many of the difficulties that people reported.

'For example, the research fieldwork carried out in 1994 showed that nearly half of those who had left Income Support had, before leaving, experienced concerns about their in-work income being sufficient. To combat this we have boosted in- work income.

'In July 1995 we introduced an extra credit for people working 30 hours a week or more and receiving Family Credit and Disability Working Allowance. 345,000 people a year are now better off by over £10 a week on top of their existing benefit.

'For working people without dependent children we are, from October 1996, piloting Earnings Top-up - an in-work benefit similar to Family Credit. Earnings Top-up is expected to help 20,000 people in eight geographical areas.

'Although during the research period some 40% of people reported financial difficulties following the move off benefit the measures we have subsequently introduced will increase income on moving into work. Some of this difficulty was caused by the wait for in-work benefits and we can help by speeding up their payment. We aim to do so. We now pay 90% of all new claims to Family Credit from employed people in five days - previously it was 12 days. This is a big step forward.

'To help with concerns people had about paying for their housing costs during the transition into work we introduced the housing benefits extended payment scheme in April 1996. This will help up to 350,000 people a year who have been out of work for six months or more, when they start work. And those people claiming the extended payments of housing benefit will find that any continuing claim for in-work housing benefit will also be paid more quickly.

'To help further with the immediate costs of moving from benefit into work the Back to Work Bonus, from October 1996, will give cash help of up to £1,000 on return to work. Up to 150,000 people a year, who have been out of work for 3 months or more and worked part-time while on benefit, will receive the bonus.

'In October 1994 we introduced a child care disregard in the in-work benefits. By providing a substantial contribution towards childcare costs this tackles an important barrier reportedby lone parents. From April 1996 the disregard was increased to £60 a week.

'We shall continue to consider the issues raised by the report. The measures we have introduced amount to a comprehensive programme of action to overcome the perceived barriers to work.

'They build on the success of Family Credit and Disability Working Allowance, and complement the forthcoming implementation of the Jobseeker's Allowance in October.'

The research also showed that:

-- a quarter of unemployed people left Income Support within three months of receiving their first benefit payment, mostly by finding a job. However, half of people who claimed Income Support because of unemployment were likely to stay on benefit for at least a year

-- people generally want to work and show flexibility in the type of job and wage levels they seek. Half of those looking for full-time work were prepared to work part-time if necessary and three-fifths were willing to accept temporary jobs

-- many people said they felt trapped on benefit mainly because of a perceived lack of job opportunities. But it also results from other concerns, such as finding affordable child care, whether in-work income will be adequate to cover needs, and making ends meet whilst waiting for their first pay packet.

-- Moving off Income Support: Barriers and Bridges by Andrew Shaw, Robert Walker, Karl Ashworth, Stephen Jenkins and Sue Middleton is published in the DSS Research Series (Report No.53). It is available from HMSO, ISBN 0 11 762394 6, price £26.

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