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Tory ministers have ditched a scheme designed to stop people wrongly losing their benefits - claiming it's not worth the "extra time and cost".

The yellow card system gave people a warning before their Jobseekers' Allowance was 'sanctioned' after MPs warned the system caused "severe financial hardship".

But the Department for Work and Pensions (DWP) is dropping the idea after a short trial involving just 6,500 claimants.

Ministers claimed the trial "appeared to make little difference to the outcomes of claimants".

They are now going back to the drawing board to create an alternative system - almost two years after the scheme was trialled.

(Image: Getty Images)

Labour MP Frank Field previously blasted ministers for dragging their feet - saying the delay drove people to foodbanks.

Today the Commons Work and Pensions Committee chairman said: "Data.. suggested the scheme was protecting hundreds of people from being wrongly sanctioned.

"Applied to the country as a whole, that layer of protection could have covered many thousands of very vulnerable people."

He demanded ministers come up with a new scheme quickly to stop people being "left destitute", adding: "Justice demands that measures like these are tested as soon as possible."

(Image: Daily Mirror)

The yellow card trial, between April and September 2016, meant claimants who faced a benefit sanction were instead given a 'sanction warning letter'.

This gave them an extra 14 days to submit evidence of a "good reason" for why they should not have their benefits docked.

The DWP, however, said only 13% of those who received a warning letter replied to it within the two-week period.

And in half of those cases the evidence did not contain a "good reason" for the sanction to be cancelled, so it was applied anyway.

Around 8,700 jobseekers' allowance claimants are sanctioned per month for offences like arriving late to an appointment due to traffic. Sanctions last an average of 28 days but 5% last more than 14 weeks.

Campaigners fear the sanction rate will soar under Universal Credit, the all-in-one benefit which is replacing jobseekers' allowance.

(Image: Get Reading)

Some 4.7% of Universal Credit claimants were sanctioned in November 2017 - compared to just 0.4% of jobseekers' allowance claimants.

They are also sanctioned for longer, with 15% of UC claimants who are sanctioned losing their benefits for 14 weeks or more.

Work and Pensions Minister Alok Sharma said: "Given the additional burden placed on the Departmental resources and marginal gains achieved, the trial did not appear to be an effective use of the Department’s resource.

"We do not consider that the benefits of the approach are sufficient to justify the extra time and cost it adds to the process.

"We are now exploring the feasibility of an alternative process to give claimants written warnings, instead of a sanction, for a first sanctionable failure to attend a Work-Search Review.

"The aim will be to conduct a small-scale proof of concept to obtain qualitative feedback from staff on this new process, followed by any subsequent tests.

"More details will be made available once we have progressed with the design work."