Disability Benefits and Spending
What is Disability?
People with physical and mental disabilities are sometimes significantly hampered in fully participating in all aspects of society because of social and physical barriers to the full enjoyment of their rights.
Frequently, disabilities make people unable to undertake full-time or even any paid employment. Disabilities can also create special needs, so the state has long made special provisions for supporting people with disabilities.
People with disabilities are eligible for a range of state benefits. Each is stringently tested.
Incapacity Benefit is a contributory benefit, payable to employed people with disabilities who are unable to work, and whose entitlement to statutory (or other) sick pay has expired. There are short-term and long-term varieties of Incapacity Benefit.
People aged between 16 and 65 who are not eligible for Incapacity Benefit, because of their National Insurance records, could claim Severe Disablement Allowance.
However, no new SDA claims have been allowed from April 2001. The claims of those already receiving SDA will be reviewed to see if they are entitled to Employment and Support Allowance. Claims will not be reviewed, however, if a person reaches pension age before 6 April 2014.
Attendance Allowance is payable to people aged over 65 who need help with personal care because of illness or disability. To qualify, a claimant must show that they have already needed help for the last six months.
Disability Living Allowance is payable to people aged under 65 with disabilities, who have personal care needs or difficulties with mobility.
Working disabled people are also eligible for the disability element of the Working Tax Credit. This tops-up employees' incomes where their disability puts them at a disadvantage in getting a job. This scheme follows on from Disabled Person's Tax Credit, which in turn replaced the Disability Working Allowance. This is administered by the Inland Revenue, rather than the Department for Work and Pensions.
In addition, some disabled people are eligible for publicly-provided equipment to assist them in their day-to-day lives. This is provided by NHS Trusts and local authority social services departments. Types of equipment provided can include wheelchairs, hearing aids, prosthetics and modifications and specialist equipment in disabled people's homes.
From 27 October 2008, Employment and Support Allowance (ESA) replaced Incapacity Benefit and Income Support paid on incapacity grounds for new customers. And as from October 2010 people who are still receiving older style incapacity benefits will be re-assessed and moved to ESA or other benefits. This exercise will run until 2014.
The principle of Employment and Support Allowance is that everyone should have the opportunity to work and that people with an illness or disability should get the support they need to engage in appropriate work, if they are able.
Central to Employment and Support Allowance are the new medical assessments which examine what people can do, rather than what they can't, and identify what personal support they might need.
Most people claiming Employment and Support Allowance will be expected to take appropriate steps to help prepare for work, including attending a series of work-focused interviews with a personal adviser.
Under Employment and Support Allowance people with an illness or disability that means they are unable to undertake any form of work-related activity will get increased financial support and will not be expected to prepare for a return to work.
The Work Capability Assessment (WCA) was introduced in October 2008 to assess entitlement to Employment and Support Allowance. Under the Welfare Reform Act the Secretary of State is required to lay an independent report before Parliament each year for the first five years of operation.
Professor Malcolm Harrington was appointed to carry out both the first and the second independent reviews published in November 2010 and November 2011 respectively. Professor Harrington set out a series of recommendations in his reviews and his suggestions were welcomed and endorsed by the Government.
The Chancellor George Osborne, in his first Budget, outlined plans for a radical reform of the welfare system. This included the introduction of a medical assessment for Disability Living Allowance from 2013 which would apply to new and existing claimants. This he claimed would be "a simpler process than the complex forms" currently in use.
The Government has since announced that it proposes to replace Disability Living Allowance (DLA) with a new benefit from 2013, the Personal Independence Payment , for eligible working age people aged 16 to 64. It is intended that the PIP will focus support on those who "experience the greatest challenges to remaining independent and leading full, active and independent lives".
During the 1980s, it was claimed by some that the system of Incapacity Benefit was used by the Government as a means of making unemployment figures look better. People who were unable to find work were inappropriately put on to Incapacity Benefit.
The number of people receiving Incapacity Benefit or Severe Disablement Allowance increased by 46 per cent between 1981 and 2002, to reach about 1.9 million. During this period there was also an increase in the proportion of people who were receiving both benefits on a long-term basis.
In 2000-2001, the Government took action to reform the system. One proposal put forward was to make Incapacity Benefit claimants reassert their entitlement every three years. Although the Prime Minister adjudged the reforms "entirely sensible and justified", many disability groups felt the measures were insensitive and showed a lack of respect for disabled people's rights.
The Government's preference for more eligibility and means-testing as a method of targeting benefits and reducing fraud has also attracted criticism from disability groups.
Disabilities have never been the responsibility of a single Department of State or agency, because of their wide-ranging effects on people's lives from childhood through to old age. As such, services have frequently had different focuses, have been difficult to access and have varied in quality across the country.
Indeed, a report by the Audit Commission entitled 'Fully Equipped', found serious failings in provision of disability equipment. In a follow-up report the Commission reported that "although £220 million in additional funding was made available in the aftermath of the report, little has actually reached frontline equipment services".
More recently, the Welfare Reform Act, which received Royal Assent in March 2012, attracted widespread criticism during its troubled passage through Parliament, with the changes relating to disability benefits being particularly controversial.
Disability Alliance (now Disability Rights UK) stated that it was "very concerned" the timetable allowed for the passage of the Bill could "prevent adequate analysis of the potential impact of plans to be undertaken" and warned that it may take legal action against the DWP over some of the proposed changes.
The charity's legal advisors, Unity Law, had examined the Government's plans and believed there was "a very credible case."
Of particular concern was the proposal to abolish Disability Living Allowance (DLA) and introduce the Personal Independence Payment (PIP) – a concern shared by very many other organisations and individuals.
The Government launched a consultation on the proposed change which ran from 6 December 2010 to 18 February 2011. In its response to the consultation, published on 4 April 2011, the Government said it was "clear from the responses received that some reform of DLA was welcomed" and that "most organisations agreed that DLA needed modernising".
The Government acknowledged that people were "anxious to understand how these reforms will be carried out" and pledged to "continue to place disabled people at the heart of these reforms by involving them and their organisations in the design and testing of the new system."
However, an extremely critical report published in January 2012, claimed that the Government's response to the DLA consultation "presented a highly misleading view of the responses it received."
The 'Responsible Reform' (aka Spartacus) report was written, researched, funded and supported entirely by sick and disabled people, their friends and carers and attracted massive support via social media from activists and celebrities.
The report gathered together existing information and analysed over 500 group responses to the Government's Response to Disability Living Allowance reform – obtained under a Freedom of Information request - and found that:
74% of respondents were against the proposals for PIP;
19% had mixed views; and
Only 7% supported it fully.
The consultation process did not meet the Government’s own Code of Practice on consultation. It was two weeks shorter than recommended and took place over the Christmas holidays.
The Welfare Reform Bill was presented to Parliament two days before the consultation ended, meaning that responses could not be taken into account when drafting legislation for PIP.
The report concluded that: "With reference to the specific questions asked in the Consultation on DLA reform, we find that there is overwhelming opposition to most of the Government’s suggestions for reform. Opposition is so clear in many cases, that we believe that the Government must pause this reform until it can be reconsidered."
Nevertheless, the Government remains adamant that the change must go ahead, as DLA has been in place for almost 20 years and "no longer properly takes into account the needs of all disabled people."
According to the Government, the cost of DLA has risen by a third over the last nine years and the changes will ensure the new benefit "remains affordable in the future."
We are replacing DLA with PIP and introducing a new face to face assessment and regular reviews - something missing under the current system.
The proportion of people who will receive both components at the highest rate will go up in PIP compared to DLA (20% compared to 16%), as will the proportion of people who receive at least one component at the highest rate (56% compared to 55%).
We continue to spend over £40bn a year on disabled people and their services, including £12.6bn a year on DLA – about the same as the entire Transport budget (£13bn).
Overall the number claiming DLA has grown by more than two million since it was introduced in 1992 – from 1.1 to 3.2 million (around 2 million are people aged 16-64).
Source: DWP – March 2012
"Through greater use of evidence and re-assessment the intention is that the new benefit will enable a more accurate assessment of an individual’s entitlement to make sure support is reaching those who need it most."
DWP, defending the change from DLA to PIP - 2012
"For many years Welfare Reform has not served sick and disabled people well. For this group, above any other, social security is not an abstract term. It is often, literally, the security to live in society with the same inherent freedoms that anyone might enjoy."
Introduction to Responsible Reform report - January 2012