Local Authority Experience with Implementation of the 300-Hour Rule

by Kræn Blume Jensen and Helle Bendix Lauritzen

Working paper available in Danish

Summary

At the request of the National Directorate of Labour, the Danish Institute of Governmental Research (AKF) has carried out a study on local authorities’ experience with implementing the "300-hour rule", which was introduced on 1 April 2006.From its inception the 300-hour rule has been the subject of much debate, particularly among politicians, case officers and organisations. It has also occupied a large amount of space in the media. Much of the discussion was based on conjectures and expectations, and there was especially much concern that very many families – not least those with children – would lose a significant proportion of their livelihood. There was also concern amongst local authorities about how the administration of the rule would turn out, given that implementation was to coincide both with the reorganisation of local government and with the establishment of the new job centres.The 300-hour rule was part of the major legislative package "A New Chance for All". Its purpose was to ensure that long-term benefit recipients should have their cases examined and that special efforts in relation to that group should be intensified. The rule consisted in a requirement that married couples in which both husband and wife were receiving cash benefits would have to demonstrate a minimum of 300 hours’ employment within the last two years. Failure to do so would result in one of the two being deemed non-employed and the consequent withdrawal of his or her cash benefits. The 300-hour rule was therefore seen as controversial from the start, as it was widely considered to break with previous practice in the benefits area. However, there were also both politicians and case officers who could see something positive in the rule.Now that some time has passed, it has become possible to obtain a better understanding of the rule and its implications, including the number of people affected by it. Under the general title "Local Authority Experience with Implementation of the 300-Hour Rule", the present report contributes to this understanding by examining the following questions, focusing on the implications the rule has had for local authorities:

What has been the local authorities’ practice with regard to implementation of the 300-hour rule?
What actions have been initiated? Have special initiatives been introduced in relation to the benefit recipients affected, and if so, what effect have they had?
What has been the reaction of the families affected, and what have the local authorities since done for these families?

Local authority implementation of the 300-hour rule

The 300-hour rule was introduced on 1 April 2006 with the effect that benefit recipients could lose their entitlement to cash benefits from 1 April 2007. A warning that he or she is at risk of losing the right to cash benefits because of the 300-hour rule must be given to the recipient six months before the cessation date (the date at which the right to cash benefits is withdrawn). This resulted in a clash between the implementation of the 300-hour rule and the local government reorganisation of 1 January 2007.Recipients who faced possible loss of cash benefits on 1 April 2007 (after the local authority mergers) were required to be warned by 1 October 2006 (before the mergers). This clash of timing represented a challenge for the local authorities because they had differing practices for issuing the warnings, and the consequence was that quite many really only came “up to speed” in relation to the 300-hour rule after 1 January 2007.Additionally, implementation of the 300-hour rule clashed with the establishment of the new job centres, which also took place on 1 January 2007. At local authority level, the establishment of the new job centres meant that payment of benefits was separated by legislation from employment-oriented measures, responsibility for which now lay with the job centres. This was problematical for the handling of the 300-hour rule, which called for close collaboration between the benefits offices and the job centres which had just been separated. The study found that a consequence of this was that the division of responsibilities between the job centres and the benefits offices in relation to the 300-hour rule was often not clearly defined.

Interpretation of the legislation was not without difficulties

Nor had it been straightforward for local authorities to identify those benefit recipients who had to be warned according to the 300-hour rule. Part of the reason for this was that the legislation was not unambiguous on how the term “married couple receiving cash benefits” should be defined. It was not clear whether both husband and wife had to be receiving cash benefits, or whether couples where only the husband or the wife was receiving cash benefits also came within the definition. The National Social Appeals Board has since ruled that the term should be understood to mean couples where both husband and wife are receiving cash benefits. This definition was not the same as that which the National Directorate of Labour, followed by many local authorities, had been using. As a result, a number of those whose cash benefits were withdrawn in the course of 2007 must now have their case reviewed. At the same time, a number of local authorities had difficulty determining in what circumstances recipients came outside the scope of the 300-hour rule. An example is provided by the rules on participation in vocational training, which were explained in a Ministry of Employment circular of 2007.

These problems with interpretation of the legislation led to wide variation in the way local authorities warned benefit recipients. Some sent letters of warning to all who might be at risk of coming under the 300-hour rule, without excluding those to whom it would almost certainly not apply, for example, those whose husband or wife was on disability pension. They did this to be “on the safe side” in relation to the legislation, but with the result that quite many recipients received unnecessary warnings and were subjected to unnecessary worry in consequence. Other local authorities performed a rough filtering before sending out warning letters, with the result that fewer benefit recipients received unnecessary warnings, while a third group carried out a more thorough filtering, thereby only sending warnings to those who really had to have them.

Division of responsibilities and lack of IT support

In the great majority of local authorities, the division of responsibilities has been such that the benefits office sent out the warnings, while the job centre was responsible for the subsequent action. When recipients are sent a warning letter, it is crucial that the job centre is informed, so that the case officer there can intensify the efforts made to help those affected. The study found that collaboration between the job centres and the benefits offices was often problematical and lacked IT tools to support communication and the division of responsibilities and duties between the two services.In a number of local authorities this had resulted in the administrative practice involving, for example, a copy of the warning letter being physically passed from a case officer at the benefits office to a counterpart at the job centre. This kind of practice in some cases acted as a delaying factor in the intensified effort to assist affected benefit recipients. That presented a challenge, since six months to the cessation of cash benefits is a relatively short time for an intensified effort considering that the target group consisted of people who had been on cash benefits for often quite long periods.

Administrative practice at the job centres

In 61 per cent of the local authorities that responded to the questionnaire, typically the management laid down practice for the implementation of new legislation, often in collaboration with specialist consultants. These are case officers who have been given a reduced workload so that they can devote part of their time to specialising in a limited field. To release resources in order to have specialist consultants is an expression of prioritising of the job centre’s resources and can help to facilitate implementation and administration of new legislation, as expertise is concentrated in a small number of persons.

Some of the local authorities that participated in the interview study had specialist consultants who had specialised in the 300-hour rule, and this was felt to have made working with the 300-hour rule less problematical than it would otherwise have been. In this connection the local authorities pointed out that it was important to involve the specialist consultants at a very early stage of the implementation process.Some of the local authorities that participated in the interview study had decided that all persons affected by the 300-hour rule should be transferred to a single case officer, who was thus responsible for all the persons in the local authority district who came under the rule. The result was to build up, through that case officer, an expertise on the effort to help the group of citizens finding themselves in the special situation of having to find work quickly in order not to lose their entitlement to cash benefits. It also made it possible to establish a more targeted information flow, as in this way not all case officers need to know everything about everything. However, another consequence was to put the local authority in a situation where the effort in relation to this target group becomes rather dependent on one person, and therefore vulnerable to personnel turnover.

In eight of the local authorities where practice for the implementation of new legislation was typically laid down by management, this task was entrusted in the case of the 300-hour rule to a working group consisting of management and case officers. In the study this was taken as evidence that practice with regard to complicated legislation involving more than one service within the one local authority benefits from being laid down by working groups involving different levels within the services.

Many job centres produce procedure descriptions when laying down practice for the implementation of new legislation. The study found that this had been done with the implementation of the 300-hour rule, and that the procedure descriptions had been a useful aid, not least because there were no IT tools to support administration of the rule. The procedure descriptions had also made it easier for new employees to familiarise themselves with the local authority’s practice in relation to the 300-hour rule.

Local authority practice regarding the effort to assist the affected benefit recipients, and the recipients' reaction

The 300-hour rule has intensified efforts to assist those who have been receiving cash benefits for a long period and for whom the efforts previously made have not led to sufficient permanent employment. When they receive the letter of warning, the benefit recipients are already in the course of a programme of regular three-monthly personal interviews. The study found that some of the local authorities intensified this programme by advancing the next interview date (one in five did so) and also increasing the frequency of the interviews (this measure had been adopted by half the local authorities).

Intensifying the effort to assist cash benefit recipients who have received a warning letter had created the impression in some local authorities that this was being done at the expense of other groups, and that the intensified efforts had not been backed by increased resources. However, far from all the local authorities shared this view. Nevertheless, it gives reason to reflect on what effect the 300-hour rule will have on the prioritising of local authorities’ efforts in the long term.

A number of local authorities also commented in connection with the intensified effort that the 300-hour rule had acted as a spur to the job centres and case officers and an encouragement to get to grips with the “tougher” cases, where the path to permanent employment can indeed be very long. However, others were of the opinion that other elements in the "New Chance for All" package had already put enough focus on this group of cash benefit recipients, and that the 300-hour rule did not therefore in itself contribute to increased effort.

The effort and its purpose

The first element in the effort is the warning sent to affected benefit recipients. Many local authorities were at first surprised that few of the recipients reacted to the letter of warning. The local authorities’ own explanation of this lack of reaction was that the recipients often did not understand the letter, which in the majority of districts was written in Danish, and that if they did understand the content of the letter, they took it as an empty threat. They had often been told that if they did not do this or do that they would lose their cash benefits, but the threats had never been carried out. In other words, they understood neither that the 300-hour rule was in earnest, nor what its consequences would be.

The aim of the effort after the issue of the warning letters was to establish whether the benefit recipients concerned had any work potential – and if they did, to initiate an employment-targeted programme. Those that did not have a work potential should instead be assessed with a view to eligibility for a “flexjob” (subsidised job for persons with reduced fitness for work and special needs), rehabilitation or disability pension.

About half the local authorities that participated in the questionnaire study had initiated special programmes that can broadly be divided into two categories, namely job-oriented programmes and assessment programmes.

The job-oriented programmes are aimed at benefit recipients who have an employment potential, but are prevented from obtaining permanent employment by language or cultural barriers, for example. The 300-hour rule can act as a spur to these benefit recipients, indicating that this time the warning is in earnest and their cash benefits really are at stake. The local authorities reported that the efforts in relation to this group were often concerned with changing attitudes by means of motivational interviews focused on what it means to have a working life. According to the local authorities, many of the affected benefit recipients had been unemployed for many years, and the idea of getting up in the morning and holding down a job could be quite alien to them. Also, many had not had a job for cultural reasons. In many cases this had been by their own choice, but for some immigrant women it had not been in accordance with their own wishes. For them, the 300-hour rule was an argument that they could bring to bear on their husbands. For the purpose of job-oriented programmes, a number of the local authorities that participated in the study brought in external partners with practical experience of working with these groups.

The assessment programmes are aimed particularly at those benefit recipients in "match category 4" who "are fours on a good day and fives on a bad day," as one local authority put it.¹ These recipients find themselves in a grey area, as they do not function well enough to manage an ordinary job but on the other hand cannot prove a permanently reduced fitness for work. The effort in relation to this group is to assess and identify those who, realistically speaking, will not become able to manage a normal job, and initiate an assessment for disability pension. Some of the local authorities that participated in the interview study had no offers specially aimed at this group, and wished to have more flexibility to experiment in their advice and guidance activities and to give dispensations from the 300-hour rule. The complexity within this group also prompted some local authorities to argue that it would have been more natural to exempt match category 4 from the 300-hour rule, just as match category 5 has been exempted. However, not all the local authorities shared this view.

In some local authorities. the assessment programmes involved a "health assessment team", as many cash benefit recipients in match category 4 suffer from various health problems ranging from bad back to mental problems such as, for example, trauma caused by war experiences. The idea of having a specific health assessment team is to identify patterns of ill health and treatment options with a view to thereby determining work potential. This has proved to be very relevant in relation to this target group.

Effort following the withdrawal of cash benefits

When a recipient loses entitlement to cash benefits because of the 300-hour rule, the job centres are not required to perform any follow-up. However, nearly 60 per cent of the local authorities that participated in the questionnaire study stated that they did nevertheless follow up on recipients who lost the right to cash benefits.

In many local authorities, though, there was no actual follow-up programme, but a situation which they described as "the door not being shut" if the affected persons applied. A few local authorities had initiated actual follow-up programmes, and some of these programmes even contained definite elements of outreach. At the same time, many local authorities had become aware of the funding possibilities introduced on 1 March 2007 under the Act on Active Measures to Promote Employment, aimed at helping non-employed dependents, e.g. full-time housewives, into employment.

However, a number of the local authorities had the impression that many of the cash benefit recipients were not interested in a follow-up programme; at the same time, many local authorities did not feel they had the capacity to initiate a coherent follow-up programme. A considerable number of the local authorities had the impression that there was no need for a follow-up programme, as many of the persons affected were finding employment. However, not all the local authorities shared this view.

Five "match categories" are used to express the degree of match of an unemployed person’s qualifications to the requirements of the labour market.—Tr.

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