What can the UK learn from Germany’s welfare sanctions reforms?
1 in 3 people Citizens Advice helped with Universal Credit sanctions this year needed a food bank referral. Sanctions are financial penalties given to people if they don’t meet the conditions of their benefits, including searching for a job. Too often these sanctions are causing people to struggle financially, forcing them to turn to crisis support.
The UK government is increasing conditionality in Universal Credit, which will expose more people to sanctions. This includes plans for more work coach discretion for some disabled claimants. This means that work coaches will have more say over the conditions which people get benefits. This could cause more people to be at risk of sanctions. But other countries take different approaches. In contrast to the UK, Germany has recently reduced the severity of its benefits sanctions
Germany’s sanctions are less harsh than the UK’s
In the UK, Universal Credit sanctions include the complete suspension of benefits for a period of up to 6 months. For example, not keeping to a work availability requirement by not taking up an offer of paid work can result in a higher level sanction. This can lead to up to all of someone’s benefits being cut for 6 months.
Losing benefits because of sanctions can have disastrous consequences. It means people who are already struggling to make ends meet must now find a way to cover their essential costs with even less income.
The severity of sanctions and their effects on the people we see is highlighted in our report The Sanctions Spiral. We found that 94% of people who received sanctions had to make sacrifices, borrow money, seek crisis support, and/or go without necessities.
In Germany, more focus is placed on offering guidance and support as opposed to imposing sanctions as forms of punishment. Since January 2023, Germany has only allowed sanctions to be applied for up to 3 months at a maximum of 30% of total benefit payments, significantly less than the UK.
Unlike the UK, Germany doesn’t reduce benefits if doing so would cause extraordinary hardship. This should mean fewer people turn to crisis support as a result of being sanctioned.
The German sanctions system allows for more leniency
Our research found that people claiming Universal Credit are often not given the opportunity to defend their actions before being sanctioned. Work coaches take a “guilty until proven innocent” approach, meaning people aren’t given the opportunity to defend themselves before they’re sanctioned. This can mean people are sanctioned unfairly, like if they were unwell and missed an appointment.
The German system also focuses on giving people the chance to present relevant evidence before taking any action. The system’s aim is to avoid unfair penalties by taking into account the particular circumstances of each person. Before sanctions are applied, any potential sanctions are communicated to that person in writing. They have the right to a hearing where they can present their case. The government considers the person’s arguments and supporting evidence before deciding whether to impose a sanction. If a sanction is imposed and the person objects, the ruling may be challenged. This system allows for more checks and balances than the UK’s approach.
Also, if someone shows that they’re serious about following the rules of their benefits after a sanction, the sanction can be ended early. This gives people a chance to change their behaviour. This policy aims to make sanctions fairer, while taking into account any reasons for not following rules. But it’s important to remember that the outcomes of specific cases might be different in practice.
What can the UK learn from Germany?
Sanctions are supposed to encourage people to look for work. But our research shows that severe penalties tend to make people’s problems worse rather than making it easier for them to find work again. Germany’s approach, which favours encouragement over criticism, shows the potential for a more empathetic system.
Rethinking sanctions and refocusing on empowerment may improve the future of those who are in need of help. By drawing ideas from Germany, the UK has the chance to revamp its welfare system and create a more inclusive path to employment.
