Unemployed claimants will face a strict ‘three strike’ policy which will see their benefits stripped for up to three years if they refuse the opportunity to work.
“Choosing not to work, if you can work, is no longer an option.” Iain Duncan Smith, Work and Pensions secretary.
The £65 a week allowance will be removed for three months on a first offence, six months for the second, and three years on the third breach.
Mr Duncan Smith said the government – which “is unashamedly pro-work”- would impose a single universal credit to replace benefits. It would also introduce sanctions on those who refuse work.
“Choosing not to work, if you can work, is no longer an option,” he said.
Mr Duncan Smith told the House of Commons: “That will be a selective process, very much targeted on those who need to do it, not for everybody.
“This is our contract: we make work pay and support you through the Work Programme to find a job.
“But in return, if we do that, we also expect co-operation from those who are seeking work.
“That is why we are developing a regime of sanctions for those who refuse to play by the rules as well as targeted work activity for those who need to get used to the habits of work.”
He told MPs the “simpler benefits system” will ensure “work always pays more” than being on benefit.
“By reducing complexity we will reduce the opportunities for fraud and error which currently cost the taxpayer £5 billion a year.”
Shadow work and pensions secretary Douglas Alexander welcomed the aims of the plan, but questioned whether Chancellor George Osborne supported the reforms.
Mr Alexander said: “He can count on Labour support when he is pursuing laudable aims even when it appears he cannot count on the support of his own Chancellor.”
While Mr Duncan Smith pledged to continue providing extra support to those with disabilities, he said the reforms were necessary to ensure unemployment “isn’t seen as a doorway to hopelessness and despair”.
“Tackling poverty is about more than giving money away. The universal credit will see 350, 000 children and 500,000 working age adults lifted out of poverty.”
Deputy Prime Minister Nick Clegg said the reforms were focused on “helping people into work”.
Mr Clegg said the new measures would ensure no one would be penalised for working: “Too often under the current rules, work doesn’t pay.
“In some cases, getting a job means losing 90 per cent of benefits, so is it any wonder people choose not to find work,” he said.
“This is the deal. Break that deal and they’ll lose their unemployment benefit. Break it three times and they’ll lose it for three years.” David Cameron
The measures are expected to come into force by 2013 in an effort to cut the bill for Job Seekers Allowance, which is claimed by 1.5 million people.
The prime Minister said the changes would create “clear responsibilities and clear incentives for those on benefit to take steps towards getting back to work wherever it’s feasible for them to do so”.
Job advisers already have the power to remove JSA for up to 26 weeks from people who fail to take up offers of employment, but the sanction is very rarely applied.
Government sources said the benefit would be forfeited in all but exceptional cases, where compelling reasons are provided for failing to take up work.
Those who have their welfare benefits stripped will be able to apply for a hardship allowance, worth 60 – 70 per cent of the JSA benefit.
Mr Cameron, attending a G20 summit in Seoul, said: “We’re doing more than any other Government to help people get back to work. That’s our part of the deal. Now those on benefit need to do their bit.
“If people are asked to do community work, they’ll be expected to turn up.
“If people are asked to apply for a job by an employment adviser, they’ll be expected to put themselves forward.
“If people can work and they are offered work, they’ll be expected to take it.
“This is the deal. Break that deal and they’ll lose their unemployment benefit. Break it three times and they’ll lose it for three years.
“The message is clear. If you can work, then a life of benefits will no longer be an option.”
It follows Mr Duncan Smith’s announcement last week of new mandatory community work placements, which will force claimants to do 30 hours a week of work such as litter-picking or cleaning graffiti for four weeks.
The disability charity Scope’s chief executive has largely welcomed plans to simplify the welfare system, but has warned that disabled job seekers will continue to struggle.
“What about those disabled people who do play by the government’s rules? Who try repeatedly to get work but are not successful? The sanctions the government is going to introduce will effectively penalise them, pushing them further into poverty, further away from work and ultimately creating more dependency on the state,” Scope CEO Richard Hawkes said.
“The fact remains that disabled people who are able to work, want to work – are still unlikely to find work because there are so few jobs available.
“Despite a progressive vision, this white paper does not address the state of the employment market today, nor take into consideration the reality of people’s lives.”