Claiming but Connected to Work

Rapid Findings #1 (June 2020)

26th June 2020 – Full report ‘Claiming but Connected to Workreleased here, accompanied by a blog post on the LSE Politics & Policy blog.

Key findings

This report presents the first findings from the Welfare at a (Social) Distance project, a major national research project investigating the benefits system during the COVID-19 pandemic, funded by the Economic and Social Research Council as part of UK Research and Innovation’s rapid response to COVID-19. It draws upon a new survey of 2,364 new Universal Credit (UC)/Jobseekers’ Allowance (JSA) claimants (carried out between 25th May and 3rd June) to look at how far benefit claimants are connected to the world of work, helping to better understand the emerging picture from recent UK labour market statistics.

Most new UC claimants who had a job before the crisis still had this job. Of those new UC claimants who were working before the COVID-19 pandemic, 29% had lost their job, but over two-thirds (70%) were still attached to their prior job. They were split between those working the same/more hours (19%), those working fewer hours with less pay (14%), those who did not work because they were furloughed or had no shifts/clients (29%), and those not working because of sickness or other reasons (7%). Overall, over half of new UC claimants currently have a job (56%). However, it is important to note that substantial minorities of claimants who have a job but are not currently working are not sure if they will return to it after lockdown ends.

The headline figures of the number of UC applications since lockdown do not provide an accurate picture of the number of people claiming unemployment related benefits – and despite its considerable value, nor does the Office for National Statistics (ONS)’s ‘claimant count’. This is partly because it is based on administrative categories which change as DWP policies change, but it is primarily because it includes those who are not currently working but nevertheless have a job to return to, who are not currently ‘unemployed’ as most people would understand it (even if many of these people may become unemployed). We estimate that 750,000 new UC/JSA claimants are currently unemployed (that is, they do not have a job, and do not have disability/caring-related barriers to work) – a very large rise, but lower than the ONS estimate of 1,400,000.

Many new UC claimants were self-employed before the crisis – 33% were self-employed, and over 50% of those in couples claimed partly because they or their partner were self-employed and could not get enough work. Among claimants who were self-employed in February, nearly half (45%) have already received a payment from the Government’s Self-Employment Income Support Scheme (SEISS). (People responded to our survey shortly after SEISS went live on 13-19th May). SEISS payments will reduce people’s UC payments, but the effect of these payments on UC is highly complex and may be felt for several months.

Despite the suspension of job-search requirements and an extraordinary drop in job vacancies, the majority of workless new UC/JSA claimants (59%) are looking for work. They need help in doing so, with a majority (67%) of new UC/JSA claimants saying that they needed employment support such as helping them to think about what jobs they could do or improving their skills/getting training.

You can download the full report here.