Job Start Payment: evaluation

Executive Summary

Background

The Social Security (Scotland) Act 2018 introduced a range of new benefits devolved to Scotland. An Order under section 63 of the Scotland Act 1998 gave the Scottish Government further powers to arrange assistance under section 2 of the Employment and Training Act 1973. Job Start Payment was introduced using these powers. It is a one-off payment of £267.65, or £428.25 for those with children, to help young people on low incomes meet the initial costs of starting a new job following a sustained period of unemployment.

Social Security Scotland began taking applications for Job Start Payment in August 2020. This report presents an evaluation of the benefit which is based on progress towards its immediate and short-term policy outcomes. However, it also considers progress towards Job Start Payments' medium-term outcomes, and its contribution to the Scottish Government's strategic aims (e.g. increased youth employment). The policy outcomes of Job Start Payment relate to the benefit's impact on people who receive the payments (hereafter referred to as 'recipients'), but the evaluation also considers the experience of Job Start Payment applicants in general.

The evaluation of Job Start Payment is largely based on findings from qualitative research that was commissioned and undertaken by Diffley Partnership, attached in full at Annex B. The qualitative research involved interviews with:

• Young people (i.e. Job Start Payment recipients, unsuccessful applicants, and non-applicants)
• Stakeholders who support unemployed young people; and
• Social Security Scotland staff who process Job Start Payment applications.

It also draws on information about applications, payments, and recipients which Social Security Scotland collects in the process of delivering benefits.

Promotion of Job Start Payment

The findings suggest that signposting by organisations (e.g. the Job Centre, employers, or employability and third sector groups) is one of the main ways recipients find out about Job Start Payment, and that people are less likely to find out about the benefit via media advertising. However, they also indicate that overall awareness of the benefit is low amongst young people. Additionally, employability and third sector stakeholders feel that there is a lack of awareness and knowledge of Job Start Payment within their organisations and professional networks. Some also feel they need better promotional materials about the benefit in order to signpost young people effectively.

Clarity of Job Start Payment and its eligibility criteria

Most young people understand that Job Start Payment is supposed to help with the costs of starting a new job. The qualitative findings suggest that most recipients spend at least part of the money on related items such as travel passes or work clothes. However, stakeholders feel that the eligibility criteria of Job Start Payment are unclear, and could be confusing to young people.

Stakeholders also report concerns about two main eligibility rules for Job Start Payment - i.e. that applicants must have been out of paid work and receiving an income-related benefit for at least 6 months at the point of job offer. They feel these rules could be unfair in some cases, because:

• Young people are often encouraged to undertake short, paid work placements which can break up otherwise long periods of unemployment, making them ineligible for the Job Start Payment – despite these placements (with agreement from the Job Centre) not impacting other benefits such as Universal Credit.

• Due to employability initiatives for school leavers, few are classed as 'unemployed' – meaning that 16-17 year olds are therefore unlikely to have claimed income-related benefits for 6 months or more. However, stakeholders express the view that these young people would still need financial assistance when starting a new job.

Applying for Job Start Payment

Application denial rates

Young people and stakeholders report that the Job Start Payment application form is straightforward to complete. However, 53% of Job Start Payment applications have been denied (rising to 79% for 16-17 year olds) which is higher than denial rates for other low income benefits administered by Social Security Scotland. The most common reasons for applications being denied were that they failed to meet one or both of the following eligibility criteria: (a) being in receipt of a qualifying benefit for at least 6 months prior to the job offer, and (b) being out of work for at least 6 months prior to the job offer.

Findings from the qualitative research provide more insight into application denial rates. As mentioned above, stakeholders report concerns that the main eligibility criteria could be unfair on some claimants, specifically (a) young people who are encouraged to take up short work placements which interrupt long periods of unemployment, and (b) 16 and 17 year olds, who they say are particularly unlikely to have been on qualifying benefits for 6 months. Testimony from Social Security Scotland staff confirmed that these factors can be linked with application denials.

The findings also indicate that factors relating to the provision of application supporting evidence could be contributing to denials.^[1] Testimony from young people shows that obtaining supporting evidence (e.g. from employers, or social services in the case of care leavers) can be challenging and stressful. Indeed, one unsuccessful applicant - who was potentially eligible for Job Start Payment - said they failed to get this information from their employer, and therefore had their application denied.

Additionally, Social Security Scotland staff say it can be challenging to contact applicants for supporting evidence. They report having to approach young people by telephone or letter, but feel that other methods such as email or text would be more effective. Staff also express the view that the level of supporting evidence required is excessive for a one-off payment. They highlight a number of factors which mean they cannot validate claims, and which can lead to application denials:

• When applicants submit supporting evidence (e.g. job contracts) which do not contain all of the required information, such as the date of job offer.

• When applicants provide a date of job offer on their application form which does not match exactly with the date of job offer which is stated in supporting documents. This can be because (a) the applicant has put the job start date on the form by mistake, or (b) the job offer date was given verbally and in writing on separate days.

Finally, stakeholders who support unemployed young people feel the information provided to Job Start Payment applicants (e.g. on eligibility criteria and the supporting evidence required for applications) is not clear, and could be leading to ineligible claims. This is supported by testimony from an unsuccessful applicant, who did not feel the guidance to care leavers was clear enough. Conversely, another unsuccessful applicant reported that they knew they were ineligible, but made a claim in the hope that their ineligibility would be overlooked.

Application processing times

Official Statistics show that application processing times have generally increased since Job Start Payment was introduced. Processing times include time spent waiting to receive copies of documents or evidence requested from applicants.The qualitative findings show that some recipients do not receive the payment at the point of need (i.e. before they receive their first pay check) due to the length of time they have to wait for an application decision. Waiting a long time for an application decision can cause stress and financial difficulties for applicants.

Take-up of Job Start Payment

A diverse range of young people from all areas of Scotland have claimed Job Start Payment. However, the Scottish Government has not yet published a take-up rate estimate for the benefit - one is due to be published later this year. As such, it is not currently clear what proportion of eligible young people have claimed (or have not claimed) the benefit. However, the evaluation highlights factors which could impact whether eligible young people are taking-up Job Start Payment. The findings suggest that:

• Young people do not report any stigma applying for the benefit, and would recommend it to others. However, they do report feelings of anxiety asking employers for supporting evidence, and stakeholders feel this may put some young people off applying altogether.
• Awareness of the Job Start Payment appears to be generally low amongst young people and stakeholders (e.g. employability and third sector organisations) who signpost them to the benefit, meaning some eligible people may not apply.
• Some eligible applicants could have had their claims denied because they were unable to provide the required supporting evidence.

The impact of Job Start Payment

Progress towards short-term policy outcomes

There is a consensus amongst young people and stakeholders that Job Start Payment is needed due to challenges people face meeting the up-front costs of a new job. Recipients welcome the payment, describing it in terms such as 'fair', 'helpful', and 'amazing'. They use it for a range of work-related expenses, such as clothes, travel passes, equipment, and childcare - which some feel they could not have afforded without the benefit. Recipients also report that Job Start Payment helped boost their confidence (e.g. in cases where they bought smart work clothes with the money) and reduced the stress they felt about the costs of starting a new job. Some also say that being able to choose how they spent the payment made them feel good about themselves.

Despite the generally positive impact of Job Start Payment on recipients, the findings indicate that – due to the high cost of childcare - parents can be left with substantial expenses which are not covered by the payment. Additionally, some young people do not receive the money before their first pay check due to lengthy application processing times, which can cause stress and financial difficulties.

Contribution to medium-term policy outcomes

A full assessment of progress towards Job Start Payment's medium-term outcomes would require: (a) more time to have passed since the benefit was implemented, and (b) access to more robust quantitative data. Medium-term outcomes will also be affected by other contributing factors, such as wider social security benefits and other government interventions designed to support young people entering employment.

However, based on the qualitative findings, it is possible to say the following:

• Young people report a range of benefits as a result of having a job, albeit they do not link these directly with the payment. For example, having an expanded social network due to bonding with work colleagues, and having an improved lifestyle compared to when they received benefits. Some feel these benefits positively impact their personal wellbeing.
• There is only limited evidence that Job Start Payment helps young people to sustain employment. However, most recipients who took part in the research were still working at the time of interview. Two of these recipients felt they would not have kept their job without the benefit.
• There is only limited evidence that Job Start Payment has led to improved health and wellbeing for recipients' families. However, some use the payment in ways that would benefit family members – e.g. as a contribution towards household bills or food costs.

Conclusion and policy implications

The evaluation shows that Job Start Payment has largely achieved its short-term policy outcomes, and there has been a small amount of progress towards its medium-term policy outcomes. As a result, it may also to have contributed positively to the Scottish Government's strategic aims relating to young people's participation in the labour market.^[2] However, the evaluation also highlights substantial issues with Job Start Payment. These issues and their implications are as following:

1. The findings indicate that young people are more likely to hear about Job Start Payment via stakeholder organisations than media advertising. However, overall awareness of the benefit appears to be low amongst young people. Additionally, stakeholders sense there is a general lack of awareness of the benefit within their organisations and professional networks. Both of these factors could mean that some eligible young people do not find out about Job Start Payment. As such, it may be helpful to increase awareness of Job Start Payment amongst eligible young people. This could be done via further promotional work and engagement with stakeholder organisations, to ensure that more young people are being signposted to the benefit.

2. Stakeholders feel the Job Start Payment eligibility criteria are unclear, and could be a reason for ineligible claims. It is also possible that young people apply despite knowing they are ineligible for the benefit, hoping their ineligibility will be overlooked (albeit there is only limited evidence for this happening). As such, it may be helpful to clarify eligibility rules, and take further steps to reduce applications from ineligible applicants.

3. Stakeholders also raise concerns about eligibility rules. For example, they report that young people who have been unemployed for long periods are often encouraged to take up short, paid placements which can make them ineligible for the benefit – but do not affect their other benefits. Additionally, they highlight that 16-17 year olds are particualrly unlikely to be on a qualifying benefit, but (in their view) still need assistance with the costs when starting a new job. As such, revisions to Job Start Payment eligibility rules could make the benefit available to more young people who need financial support when entering employment.

4. Applicants and Social Security Scotland staff experience issues around application supporting evidence. Applicants say getting evidence is challenging and stressful, and stakeholders feel the need to approach employers for evidence could put young people off applying for Job Start Payment altogether. Staff have to apply rigid procedures when processing evidence, which could lead to eligible applicants being denied. They also report difficulties contacting applicants via telephone or letter to obtain the necessary documents, and feel other methods (e.g. email and text) would be more effective. As such, reviewing and changing procedures around the provision of supporting evidence could lead to fewer application denials, and increase take-up of the Job Start Payment.^[3]

5. Application processing times have generally increased since the benefit was introduced. This can cause stress and financial difficulties in cases where applicants have to wait longer for a decision on their claim, and do not receive the payment at the point of need (i.e. before their first pay check). As such, it may be helpful to review the application decision-making process to see if it can be expedited.

6. The evaluation shows that parents can face high childcare costs when starting a new job. This means that, despite receiving a higher rate of Job Start Payment, they can still be left with substantial expenses to cover before their first pay check. As such, it may be helpful to review the rate of payment awarded to parents.

7. While the evaluation indicates that some progress has been made on the medium-term outcomes associated with Job Start Payment, it is not possible with the information available to provide a full assessment across these areas. As such, more data should be sought and made available for future evaluations of the benefit.