Helping Employees with the Transition to Work

Ways and Means – in the House of Commons at 3:31 pm on 29th November 1994.

Alert me about debates like this

But it has to be worth people's while to take jobs. I also intend to introduce new measures to ensure that people are not deterred by genuine, short-term financial problems when they try to move from unemployment into work.
Anyone moving from benefit into a low-paid job is likely to be better off, but it may not seem like it to the man or woman concerned. The first thing that happens when a person takes a new job is that income support disappears, and with it all help with the cost of housing and their council tax. In due course, the person in the new job may be entitled to family credit and housing benefit. But at the moment it can be hard to find out how much that will be, or when it will come.
In the meantime, the person concerned has all the expenses of getting to work — buying clothes or tools, travelling to work, and so on. Time and time again, I have had people tell me that this is a major deterrent to taking a job and that they really cannot afford to take a job because of these gaps in the system. I have a number of measures to help.
I propose to speed up the payment of family credit, so that anyone who takes a job can be sure of getting the benefit to which they are entitled, and getting it quickly.
I propose to enable people who take a job to go on getting the same help with their rent and council tax as they had on income support, for their first four weeks in the new job. I propose to speed up the payment thereafter of housing benefit, so they can be quite sure where they stand at the end of the four weeks.
I propose to exempt from tax the back-to-work bonus which my right honourable Friend the Secretary of State for Social Security announced in October. That will give people who have been unemployed, but have managed to do a bit of part-time work while receiving their benefit, a lump sum when they leave benefit and take a job.
I also propose to expand the number of grants available to people who take jobs, to cover their start-up costs. These are known as jobfinder's grants. I propose to make available around 25,000 grants of an average of £200 for those who have been unemployed for more than two years.