PolicyLens

Methodology note

Tighten benefit job-offer rules: calculation note

Assumptions behind the Tighten benefit job-offer rules scenario. Implementation detail is incomplete, so uncertainty is explicit.

View main policy page: Tighten benefit job-offer rules

Central fiscal result

-GBP 5.0bn - Net fiscal impact in 2027-28

Low case: -GBP 15.0bn. High case: +GBP 5.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Two refused job offers lead to benefit withdrawal.
  • Applies only to claimants judged fit for work.
  • Reform's two-million returner claim is not assumed centrally.
  • Child and disability protections are unspecified.

Affected population

  • Affected units are working-age benefit claimants and households.
  • Central exposure is below the two-million political claim.
  • Employers may see more low-wage applicants.
  • Local labour markets face uneven effects.

Gross impact

  • Central saving assumes fewer claims and some employment.
  • Tax gains are modest because many jobs are low-paid.
  • Hardship and appeal costs reduce net savings.
  • High case allows savings to disappear.

Fiscal build-up, central case

  • Benefit payments reduced: -GBP 7.5bn
  • Extra income-tax and NI receipts: -GBP 1.0bn
  • Employment support and appeals: +GBP 1.5bn
  • Hardship and local-service costs: +GBP 2.0bn

Central net impact: -GBP 5.0bn in 2027-28.

Behaviour and pass-through

  • Low case assumes stronger genuine employment gains and lower repeat claims.
  • Central case assumes many exits do not become stable work.
  • High case assumes appeals, hardship and poor matches offset savings.
  • GDP gains are not counted without evidence of sustained earnings.

Phasing

  • 2026-27: +GBP 0.0bn. Preparation or partial implementation.
  • 2027-28: -GBP 5.0bn. Main scenario year.
  • 2028-29: -GBP 6.0bn. Behaviour and pass-through develop.
  • 2029-30: -GBP 6.0bn. Steady-state uncertainty persists.

Main source groups

  • S1: Reform Contract defines the two-strike rule and two-million claim.
  • S2: IFS warns welfare savings lack implementation detail.
  • S3: DWP sanctions data would be needed for affected caseloads.
  • S4: Labour-market evidence cautions against mechanical work-entry assumptions.
  • S5: Health and disability exemptions remain unspecified.
  • S6: Unemployment-insurance and labour-market-programme studies inform job-search assumptions.