Welfare Reform Bill

As the state pension age starts to equalise from 60 to 65 in April 2010 to 2020, some people who are out of work will need to claim or remain on a working-age benefit, instead of claiming the pension credit guarantee. We need to ensure that our back-to-work help operates equally and fairly for all ages. At this juncture, I will revert to some statistics because there are assertions that employers are not so willing to employ older people or that for older people employment is more challenging than for other groups. The employment rate for people aged 50 to state pension age has increased in recent years. The employment rate for men of that age is now higher than at any other point since the mid-1980s—higher than the employment peak of 1990. Currently—I suspect that these figures are a little out of date but they are illustrative—the employment rate for people aged 50 to state pension age is 71.9 per cent overall, with 72.9 per cent for men and 70.5 per cent for women. The employment rate for people aged 25 to 49 is 81 per cent. Of course, around 1.3 million people are working past state pension age. Helping older people to remain in work is good for individuals because it increases their income and enables them to make better provision for their retirement. It is good for employers, who can benefit from the skills and experience they can bring to their business. It is good for the economy because it increases productivity and tax receipts from increased numbers in employment. Let me explain how each of the amendments could unfairly restrict the back-to-work help that is available to older people. The amendment to Clause 1 would mean that customers aged 50 and over could not be required to participate in "work for your benefit". I can see no circumstances in which that would be desirable. As many of us in this Room know, being over 50 is not a bar to enjoying the full benefits of a working life. Indeed, as our population ages, we should expect more and more older people to be in work, and we need to do everything we can to help them do so. "Work for your benefit" is a programme designed to help people into work; therefore I cannot see why we would want to deny this group the support that it offers. The entire direction of welfare reform is to base the support that individuals receive on their personal circumstances, to work with each person and determine what support they need, and not to make broad assumptions about their capabilities or barriers to work based only on their age or any other shared characteristic. The amendment would seriously undermine that approach. That is not in the interests of either the individual or a wider society facing the challenges of an ageing population. The amendment to Clause 8 would exclude ESA customers who are over 50 from the specific work-related activity requirement, which is a key plank of the progression-to-work model proposed by Professor Gregg. Evidence suggests that conditionality, coupled with support, is effective in moving people closer to work. Pathways to Work increases the chance of a new customer being in employment after 18 months by around 25 per cent and saves the taxpayer £1.50 for every pound invested. In introducing progression to work, we want to build on the success of pathways in order to help more customers to move closer to work. Within these pathfinders, we will therefore be introducing the requirement for customers to undertake at least one activity between work-focused interviews to support their own route back to work. I am sure that noble Lords will agree that many ESA customers over 50 will have a great deal to contribute to the labour market, and it is wrong to expect that people will not work again just because they have reached a certain age. I am also sure that many customers in this group would like to find work. It is generally recognised that being out of work and on benefit is bad for health and well-being. ESA customers who are over 50 are not excluded from the current pathways system. It would be wrong to exclude them from the conditionality underpinning progression to work and the benefits that this may provide in helping them move closer to work. Clause 2 will apply to claimants receiving income support and to the partners of claimants of other working-age benefits. However, the partner of a recipient of a working-age benefit may themselves be over pension age. In that case, we would not wish them to be subject to this clause. That is why the new Section 2D(2)(a) of the Social Security Administration Act inserted by this clause imposes these requirements only on those partners who are "under pensionable age". The amendment would ensure that these requirements would apply only to partners of benefit recipients who are under the age of 50. That would create a different approach between claimants and their partners. The conditionality regimes for those claiming working-age benefits apply for as long as they continue to receive the benefit to which those conditions attach; that is, until they reach pensionable age. There is no evidence that would support the imposition of a different age limit for claimants and their partners and such an approach would be confusing to families and add complexity to the benefit system. The amendment to Clause 26 would exempt customers who are 50 or over from the new benefit sanction that we are introducing for failure to attend mandatory appointments within the JSA regime. The new sanction will help to enforce a key element of the JSA regime—attending mandatory appointments. These appointments act as a gateway to the support on offer to help customers back to work. They also act as a crucial checkpoint in ensuring that customers are actively seeking and available for work—the fundamental conditions of receiving jobseeker’s allowance. The over-50s are fully integrated within the JSA regime. They benefit from back-to-work support alongside younger jobseekers and receive targeted help through the New Deal 50-plus, which provides job search assistance, training opportunities and work placements. As the over-50s receive the same level of employment support as other jobseekers it is only right that they are also subject to the same sanctions when they fail to comply. Indeed, evidence suggests that conditionality, coupled with support, is effective in moving people closer to work. We can see no case for making an arbitrary distinction at the age of 50 or any other point during a person's working age. All jobseekers should be treated equally; it would be unfair on younger jobseekers if older customers were exempted from the sanction. Clause 28, as it stands, will ensure that not only people up to the age of 59 as currently, but also those aged 60 and over up to pensionable age, will get the additional help offered by work-focused interviews when claiming income support or incapacity benefit. Everyone up to pensionable age should be able to expect to get the additional back-to-work support offered by work-focused interviews. The noble Countess recommended a programme of research. I am pleased to say that we already have an extensive programme of published and planned research and analysis covering the employment position of people aged 50 and over. We are committed to increasing the employment of people aged 50 and over and this research and analysis is important in informing our future progress. The evidence for pathways was mentioned, specifically that it does not work for people over 50. As the noble Countess said, it is true that the evidence shows that pathways for existing and new repeat customers is more effective for customers under 50 than over, but that is likely to be because many customers over 50 are longer-term benefit claimants who are making repeat claims and therefore have specific barriers to work that are connected with having claimed benefit for some time. That will not be the case for new ESA customers, who will be subject to the conditionality under the progression-to-work system. New ESA customers who are over 50 will have particular barriers to work, but we are confident that with the support of their personal advisers, they will be able to overcome these barriers and will be able to do a great deal to support their own route back to work. We will pilot a regime to test what support will be most effective for longer-term benefit claimants who are over 50. I was asked what safeguards will be built into the progression-to-work system to protect the needs of people over 50? When agreeing work-related activity or issuing customers with a direction to undertake specific work-related activities, personal advisers must have regard to what would be reasonable in the customer’s circumstances. That would include taking into consideration any relevant factors connected with the customer’s age. If the customer feels that the requirement on him is unreasonable, he will be able to request that it is reconsidered under the provisions for reconsideration of an action plan. That is Section 14(4) of the Welfare Reform Act 2007. If the customer fails to undertake the activity, he will be asked whether he can show good cause for that before a sanction is considered. We are setting out good-cause considerations in regulations. Evidence of good cause may include demonstrating that the conclusions from the work-focused health-related assessment or work-focused interview, which led to a direction, had not been or were no longer appropriate or relevant to the claimant’s circumstances. If the claimant is sanctioned for failing to undertake the activity, he will be able to appeal the decision to sanction. We are committed to increasing employment opportunities for older workers. Our programme of research is designed to help us to build further on our support and to share good practice across providers of our back-to-work support. The noble Baroness, Lady Afshar, asked about older workers who cannot speak English. That is a very important point. I would like to write to her in some detail about what should be available at Jobcentre Plus. Certainly there is support for translation and the right to have someone attend an interview with you. With the information I have available, I do not think I can do justice to the support that should be available. In those circumstances, we always need to seek to ensure that it is delivered in a manner in which it is meant to be delivered. My noble friend Lady Turner referred to the default retirement age, a debate which runs on. She will be aware that we are committed to review that in 2011. One can see the benefits of it being extinguished. Many employers do not operate it anyway, in particular, I am pleased to say, the DWP. The noble Baroness, Lady Howe, made the key point that we all have to work longer. On pensions, we have debated what has happened to longevity and to the demographics. There are fewer people around to support the state pension system in comparison with the number of pensioners. Working longer to avoid poverty in older age is one way through that. The noble Lord, Lord Skelmersdale, referred to age discrimination. It is absolutely right that we should do everything that we can to challenge discrimination on any grounds and certainly on the ground of age. We believe that it is important that older workers get the help and support that they need to enable them to return to work. I hope that, having heard the explanation, the noble Countess will feel able to withdraw her amendment. Another key point is the training given to Jobcentre Plus advisers. That issue will run through many of the debates in Committee and perhaps we shall have an opportunity to focus on that in more detail later. It is certainly an important point.