Scheme will give claimants 14 days to explain infringements before benefits are docked after MPs criticise system as overly punitive

An early warning system for benefit claimants facing sanctions is to be trialled in response to claims that an excessively punitive and bureaucratic system is driving some claimants deeper into poverty.

The work and pensions secretary, Iain Duncan Smith, has announced that claimants will be given a “yellow card” 14 days before their benefits are reduced. The warning allows them time to give a good reason for failing to meet the commitments they must make in return for getting benefits. Under current rules, sanctions are applied immediately.

Duncan Smith said the approach would be introduced on a trial basis, a relatively small commitment, next year.

“During this time, claimants will have another opportunity to provide further evidence to explain their non-compliance,” he said in a letter to the work and pensions select committee.

“We will then review this information before deciding whether a sanction remains appropriate. We expect that this will strike the right balance between enforcing the claimant commitment and fairness.”

The move comes after years of criticism and mounting evidence that claimants are winning appeals against Department for Work and Pensions (DWP) decision-makers, making the system more cumbersome and expensive.

In 2014, the DWP released figures showing that 58% of people seeking to overturn sanctions were successful – up from 20% before 2010.

In March, the work and pensions committee called for an independent inquiry into how the sanctions operated, the second in a year, and Duncan Smith’s announcement on Thursday is a formal response to a select committee report rushed out before the general election in May. The report said the sanctions regime appeared to be “purely punitive”.

In a written statement to parliament, the DWP has also announced changes to the way jobseeker’s allowance sanction notifications are sent out and an extension of “at risk” groups to cover homeless people and those with mental health conditions. People in these groups have greater access to hardship payments and will be able to appeal a decision more quickly.

Explaining the proposed early warning system, the DWP said: “At present people are notified of a sanction and it is imposed immediately afterwards. In some cases, claimants go on to challenge the decision and the sanction may be overturned. We will trial arrangements whereby claimants are given a warning of our intention to sanction and a 14-day period to provide evidence of good reason before the decision to sanction is made.”

But the DWP refused to accept the work and pensions select committee’s call for a full independent review of the workings of the sanctions system.

The department also rejected a request to set out the number of people who have died whilse subject to a sanction, saying that to do so might breach the DWP’s duty of confidentiality by identifying individuals. It also rejected the idea of setting up a new independent complaints procedure in the event of a death, saying that there were already means by which such complaints could be handled.

The government in its response said ministers would not impose additional requirements to work extra hours on universal credit claimants who are in work, at least until the current pilot schemes had been evaluated.

Kirsty McHugh, chief executive of the Employment Related Services Association, said: “We welcome the recognition by the secretary of state that the sanctions system is in need of reform, but are concerned that the changes today don’t go far enough.

“For some jobseekers, receiving a sanction can act as a ‘wake-up’ call. However, for the majority, the sanction system is more likely to hinder the journey to employment. Jobseekers move into work quickest when they feel positive about work and thus sanctions should only be used as a last resort.”