Disability Benefits and Spending

This issue brief relates to a developing news event. For full details of the 2008 Budget visit our in-depth Budget section.

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.


Background

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, may claim Severe Disablement Allowance.

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 employee's incomes where their disability put 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.


Controversies

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 onto 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 Benefits 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 in 2000, titled 'Fully Equipped', found serious failings in provision of disability equipment. In a follow-up report in 2002, 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".


Statistics

In 2001/02 it is estimated that 3.6 million long-term sick and/or disabled people in Great Britain received either disability living allowance (DLA) or attendance allowance (AA), more than double the number who received these benefits or their equivalents in 1991/92

In February 2002, 2.3 million people were receiving DLA and 1.3 million were receiving AA.

In 2001, eight per cent of all adults said they had a permanent difficulty with mobility

Statistics: (Source: Office for National Statistics)


Quotes

"The Government is determined to increase opportunities for people with disabilities to lead independent and fulfilling lives. Fairness for disabled people requires an end to discrimination in the workplace and beyond. The Government is committed to extending rights and opportunities for disabled people."

Gordon Brown, Pre-Budget Report 2003

"I am very disappointed that the service, overall, has not improved since we last looked at it two years ago. This raises serious questions about whether we need to develop more radical approaches to the way these services are provided which may, among other options, involve the use of the public private partnerships and an extension of direct payment schemes."

Sir Andrew Foster, Controller of the Audit Commission, 2002