SUMMARY
1. The Government pledged in its manifesto to lay the foundations
for a modern welfare state. The Welfare Reform programme is designed
to address this commitment. Disability Living Allowance (DLA)
is, of course, part of this programme.
2. An objective for the reform programme is to encourage
sick and disabled people to play a full part in society and to
help them support themselves wherever that is possible. This means
getting the right support to people who want to work and getting
the right mix of cash and services to people who cannot work to
enable them to live independently and with dignity. The focus
must shift to include people's capacity and abilities, not just
their incapacity and disability.
3. Whilst it is too early to speculate on the outcome of
the reform, the Green Paper makes clear the Government's commitment
to the principle of providing help with the extra costs arising
from disability and to maintain DLA and Attendance Allowance (AA)
as universal, national benefits for those who meet the entitlement
conditions. The Government also made clear that the reform is
not cuts driven and that for those severely disabled people with
the greatest needs the Government will want to spend more. Disabled
people can be assured that the Government has given a firm commitment
to consult fully with them, their organisations and others with
an interest in this important area before any changes are made.
4. As part of this process, reports have recently been published
which highlight various problems in DLA. The report of the independent
DLA Advisory Board, emerging findings from the Disability Survey
and internal research into the decision-making process in DLA
provide the backdrop for discussions and debate with disabled
people and their representatives. A series of seminars will begin
to take this forward.
5. The Benefit Integrity Project (BIP) is entirely separate
from welfare reform. It is about ensuring the correctness of payments
of DLA under the current rules. It is a symptom of the need for
reform rather than part of the reform process itself. DLA is a
complex benefit and there is understandable confusion on the part
of its recipients about whether or when to report changes in circumstances,
particularly if a change has come about gradually or the level
of need has been affected by other circumstances such as the acquisition
of an aid.
6. The BIP came about as a result of evidence suggesting
that awards of DLA are vulnerable to change over time and these
changes are not always recognised or reported. There is no suggestion
that this is due to fraud, it merely illustrates the complex nature
of DLA.
7. With this background it is necessary to ensure we seek
up to date information from recipients in order to check that
help was going to those for whom it was intended. However, it
is important that the exercise is carried out in a sensitive and
careful manner. There have been concerns expressed about the procedures
adopted and Ministers have responded to those concerns. The Secretary
of State announced an extra safeguard on 9 February to ensure
that no benefit was reduced or stopped without first seeking some
additional evidence beyond that provided by the claimant. The
Secretary of State, Ministers and officials continue to discuss
the operation of the BIP with organisations of, and for, disabled
people. The Secretary of State has met the Disability Benefits
Consortium to specifically discuss the BIP and at a meeting on
12 March agreed to take forward consultation on a formal basis.
This included a meeting between the Parliamentary Under Secretary
of State, Baroness Hollis, officials and Disability Benefits Consortium
representatives on 23 March to discuss ways the BIP may be improved.
A number of further changes were agreed at that meeting, including
important administrative measures to improve the literature, training
and statistical analysis of the project in consultation with disability
groups, a fast-tracking of reviews and appeals and an agreement
not to apply the BIP procedures to those people aged 65 or over.
Ministers continue to listen to representations about the BIP
processes and they will closely monitor the situation to ensure
that the BIP is carried out as sensitively as possible.
THE PLACE OF DLA IN THE GOVERNMENT'S STRATEGY
FOR SICK AND DISABLED PEOPLE
WELFARE REFORM
8. The Government is committed to a programme of Welfare
Reform. Sickness, disability and carer benefits form part of this
general welfare reform. The aims of this part of the programme
are to help sick and disabled people to play a full part in society
and to support themselves where they can. The Government wants
to give those who can work the opportunity and support to do so.
Those who cannot work should be helped to live independently in
the community, and provided with a decent income where they cannot
support themselves. In doing this the Government also want to
make the system as clear and straightforward as possible while
still recognising the complexity of individual needs.
BRIEF DESCRIPTION
OF DLA
9. Disability Living Allowance (DLA) is an important central
benefit for disabled people. It was created in April 1992 by merging
and extending two existing benefits, Mobility Allowance (MobA)
and Attendance Allowance (AA). DLA is payable to help disabled
people who are under 65 years old who have care needs or mobility
needs or both. Once awarded it can continue beyond age 65. Attendance
Allowance continues to exist for those people with care needs
(but not mobility needs) who become disabled or claim after their
65 birthday.
10. Part of the reason for introducing DLA was research showing
gaps in the provision of help for certain disabled people under
the previous system. Evaluation of the changes made in 1992 has
shown that the new benefit has succeeded in its aim of getting
help to those who had sufficient disability for their earnings
to be affected whilst not being disabled enough to receive the
old MobA and/or AA.
11. The rationale behind DLA is not widely understood. DLA
is paid to help the disabled person with the extra costs associated
with disability. These are assessed by looking at the disabled
person's care and mobility needs as proxies for extra costs. Research
has shown that there is a strong correlation between care and
mobility needs and extra costs in general.
12. DLA is non contributory, tax free and is not means tested.
DLA can also passport recipients onto other forms of help - for
example, by providing an additional contribution towards extra
costs for those who need help through Income Support. Annex E
on shows the inter-relationship between DLA and other benefits.
Details of DLA's entitlement conditions, forms of medical evidence
and nature and duration of awards is given in annex A.
GROWTH OF
DLA
13. Since its introduction, there has been a considerable
increase in caseload and expenditure on DLA. The number of people
on DLA has almost doubled from just over one million to almost
two million between mid 1992-93 and mid 1997-98 (see annex G,
table G9 and also Graph G12). During the same period DLA benefit
expenditure has gone from £2.2 billion to £5.0 billion
at 1997/98 prices (see annex G table G10 and annex G graph G11).
CHANGES IN
DLA SINCE ITS
INTRODUCTION
14. There have been two recent changes to DLA. Firstly, in
July 1996 the mobility component of DLA was aligned with the care
component and AA by withdrawing payment after 4 weeks in hospital
(12 weeks for children). The mobility component of DLA is primarily
intended to help disabled people to become independently mobile.
Most hospital patients, especially those admitted for acute treatment,
have little scope for mobility and most of their basic needs are
met by the NHS. People who had been in hospital for 12 months
or more at the point of change were transitionally protected and
those with Motability agreements are protected for the full term
of the current agreement.
15. Secondly, since October 1997 a person has until the day
before their 65th birthday to claim DLA. Previously there was
a `year of grace' which allowed claimants until their 66th birthday
to claim. The aim of this measure was to encourage disabled people
to make their DLA claims promptly by providing a clear distinction
between AA and DLA and streamline and simplify administrative
procedures.
FUTURE DEVELOPMENTS
ON DLA
16. The Government has already given a clear undertaking
to consult widely on any proposed changes before they are introduced.
As part of this process, the debate on the long term position
of DLA will be aided by a seminar announced on 26 February by
the Parliamentary Under-Secretary of State, Baroness Hollis. The
seminar has been arranged for 27 March when Baroness Hollis will
meet with representatives of disability and carer groups to discuss
DLA. The Green Paper makes clear the Government's commitment to
the principle of providing help with the extra costs arising from
disability and to maintain DLA and Attendance Allowance (AA) as
universal, national benefits for those who meet the entitlement
conditions. The Government also made clear that the reform is
not cuts driven and that for those severely disabled people with
the greatest needs the Government will want to spend more.
IMPACT OF
THE SOCIAL
SECURITY BILL
ON DLA (SUBJECT
TO PARLIAMENTARY
APPROVAL)
17. The Decision Making and Appeals (DMA) proposals within
the Social Security Modernisation Bill, now before Parliament,
will replace the current system of multiple decision makers with
single status decision makers, all acting on behalf of the Secretary
of State. Multiple component decisions and multiple decision points,
where various elements of decisions carry individual appeal rights,
will be replaced with simpler "outcome-based" decisions
on, for example, benefit or maintenance entitlement, against which
there will be a single and clear right of appeal. A result of
this is that claimants should get a better explanation of the
reasons for the outcome of their claim than they do now. Disability/medical
questions will be decided with expert advice from medical practitioners
and other experts as appropriate.
18. The rules on how and when decisions can be changed will
be simplified, to enable decision makers to take a "second
look" at disputed decisions and correct them at the earliest
opportunity.
19. The proposals for the administration of appeals are not
on the face of the Bill. However, Ministers have agreed, in principle,
to set up a new appeals agency to administer the new appeals system.
Under the new provisions, it is proposed that all appeals will
be decided by one unified tribunal jurisdiction. This will eliminate
the need in some cases for separate hearings by two different
tribunals, eg Disability Appeal Tribunals (DAT) and Social Security
Appeal Tribunals. The panel of persons who will act as tribunal
members will have a variety of expertise, including legal, financial,
medical and a knowledge of disability. The cases will be sifted
and allocated to tribunals with panel members who have the appropriate
expertise. In practice, those cases that are now heard by a DAT
will still be heard by panels that have medical expertise and
experience of the effects of disability.
20. Tribunals will be limited to dealing with the decision
that is in dispute. They will no longer be able to take into account
changes, such as a deterioration in a person's condition, that
has occurred since the original decision was made.
IMPACT (CONTRACTORISATION OF
THE BENEFITS
AGENCY MEDICAL
SERVICE)
21. The IMPACT project has responsibility for the successful
contracting out of the Benefits Agency Medical Services (BAMS),
to the private sector. BAMS currently provides a national service
covering Great Britain, and this has resulted in the contract
being split geographically into three separate contract package
areas. On 20 February 1998, after a successful procurement exercise,
all three geographical contracts were let to Sema Group Limited.
22. There will be a period of transition when Sema will work
alongside both the IMPACT Team and the BAMS organisation. This
will enable Sema to gain valuable first hand experience of the
BAMS organisation and their current working practices. During
the transition period the responsibility for the delivery of the
Medical Service will remain firmly with BAMS, with little or no
change affecting the service during this time. The successful
completion of the transition period could see Sema Group taking
over the running of the BA Medical Services from the Autumn. At
this stage, the service will be run very much along existing lines,
with any changes to current operations, including DLA, likely
to be gradual rather than immediate.
CONCLUSION ON
THE PLACE
OF DLA IN
THE GOVERNMENT'S
STRATEGY FOR
SICK AND
DISABLED PEOPLE
23. The gateways to DLA are being examined as part of the
Government's overall Welfare Reform programme. Disabled people,
the various organisations representing them and others with an
interest will be consulted before any decisions are made. The
Government are determined to ensure that disabled people get the
support they need to lead a full and dignified life free from
discrimination. The Green Paper affirms the Government's commitment
to the principle of providing special allowances to help with
the extra costs of disability and the Government intend to maintain
DLA and AA as universal, national benefits for those who meet
the entitlement conditions. The Government also made clear that
the reform is not cuts driven and that for those severely disabled
people with the greatest needs they will want to spend more.
THE BENEFIT INTEGRITY PROJECT (BIP)
INTRODUCTION
24. Although often linked, the Benefit Integrity Project
(BIP) is entirely separate from Welfare Reform and the future
position of Disability Living Allowance (DLA) in the Government's
strategy for sick and disabled people. BIP is all about ensuring
the correctness of payments made now under current rules. Welfare
Reform is about the long term future of the welfare system. To
help avoid confusion, this memorandum separates the two issues.
THE BENEFIT
REVIEW OF
DLA
25. As one of a series of reviews of benefits designed to
measure the extent of incorrect payments, a Benefit Review of
DLA was carried out in 1996 and the findings were published in
February 1997, following a pilot exercise in 1995.
26. A key finding was that 27 per cent of customers had awards
which were incorrect (including both under and over payments)
at the time of their visit, confirming earlier work in this area.
These errors were due to a variety of causes, including customers
being unclear what changes to report and when, Departmental error
and suspected or confirmed fraud. (A brief synopsis of this review
is given at annex D).
LAUNCH OF
THE BIP
27. Clearly the level of incorrectness indicated by the Benefit
Review and earlier work could not be ignored and so the previous
Government announced the BIP as one part of a package of security
measures in the November 1996 budget.
TERMS OF
REFERENCE
28. The aim of the BIP is to collect up-to-date information
about certain DLA beneficiaries' current care and/or mobility
needs through a programme of visits and postal enquiries. This
information is used to decide if there has been a change in the
current entitlement to DLA. Where necessary, cases are referred
to Adjudication Officers for consideration of a revised entitlement.
The BIP process seeks to ensure that DLA is paid at the correct
rate and to those - and only those—who are legally entitled
to it.
29. Changes have been made as a result of BIP to increase
as well as reduce benefit entitlement. It is important to note
that the BIP is aimed at getting up-to-date information from the
benefit recipients in order to check their entitlement to DLA.
It is not a cuts exercise, nor have any rules been changed; responsibility
for decision making still rests with Adjudication Officers.
SCOPE
30. The focus of the activity was dictated by the findings
of the Benefit Review and earlier work. The Project therefore
concentrates on groups of recipients who were thought to be the
least likely to contact the Department about change. The groups
selected were people with awards of the higher rate of the mobility
component combined with either the highest or the middle rate
of the care component. It is estimated that over 400,000 people
will be asked for up to date information under the BIP. This estimate
includes those customers within the BIP criteria who make a renewal
claim.
31. People with certain disabilities will not be contacted
providing the Benefits Agency is able to identify them from their
records. These are those paid under Special Rules, paraplegics,
quadraplegics, those who are both deaf and blind, double amputees,
and those within the definition of Severe Mental Impairment. Children
(those aged under 16) are also excluded from the BIP.
TIMETABLE
32. Latest estimates are that BIP is expected to run beyond
the 1997-98 and 1998-99 financial years into a third year.
MONITORING AND
EVALUATION OF
THE BIP
33. The BIP is being monitored and evaluated with the aim
of establishing the effectiveness of each part of the BIP process
and identifying areas for improvement throughout the project.
The evaluation will also be used to provide recommendations to
inform future planning for DLA.
34. Ministers and Disability Organisations are given monthly
statistical updates, with copies being placed in the House of
Commons Library.
35. Meetings have been held with Ministers, officials and
disability organisations to discuss project progress, analysis
emerging trends, and highlight concerns. The next meeting is planned
for April.
36. A yearly evaluation will also take place, where past
performance will be analysed, expenditure and savings reports
and future forecasts will be prepared, and recommendations for
improvement will be made.
CONCERN ABOUT
BIP
37. It is clearly important that the exercise is carried
out as sensitively and carefully as possible. Disability groups
have been included in the discussion about the BIP from the early
stages and processes are kept under review. There has been concern
about how the BIP is being delivered and in particular about benefit
being reduced or withdrawn.
38. To address these concerns the Secretary of State announced
on 9 February an extra safeguard to the BIP process. This involves
obtaining additional evidence to that provided by the claimant
in cases where reduction or removal of benefit entitlement is
likely, before reference to the Adjudication Officer for a review.
The type of evidence obtained will vary according to the individual
circumstances of the case. However, it could include such things
as asking the claimant if we can contact their carer, seeking
advice from their doctor, or asking for a medical examination.
39. This should provide greater confidence in the decisions
that are made and should further reassure people who are contacted
as part of this exercise. This extra safeguard will inevitably
slow up the progress of the BIP due to additional evidence gathering.
However, the impact, which is still being considered by the Benefits
Agency, is not expected to be significant.
40. In addition, the Secretary of State, Ministers and officials
continue to discuss the operation of the BIP with organisations
of and for disabled people. The Secretary of State has met the
Disability Benefits Consortium twice and at the meeting on 12
March agreed to take forward consultation on a formal basis. This
included a meeting between the Parliamentary Under Secretary of
State, Baroness Hollis, officials and Disability Benefits Consortium
representatives on 23 March to discuss further measures to improve
the project. A number of important changes were agreed at that
meeting. For example, that people over the age of 65 would no
longer be contacted as part of the exercise; to work, in consultation
with disability groups, to improve the administration (including
the literature, the design of questionnaires, the training of
staff and statistical analysis); to fast-track reviews and appeals
made against decisions following the BIP examination; to continue
consultation with Motability to agree special protection for those
customers who may be affected.
41. Of course, as explained above, the BIP procedures will
continue to be carefully monitored and careful consideration will
be given to representations about things that are perceived to
be going wrong.
EARLY FINDINGS
OF THE
BIP
42. Annex H, table H1 gives a breakdown of the outcome of
cases looked at so far under the BIP. Up to the end of January,
and including renewal cases, almost 55,000 cases had been examined
and more than 12,000 people had had their benefit changed. Almost
1,300 people have seen an increase in their award, while some
4,000 people have moved off benefit altogether. The overall level
of incorrectness found so far is 21 per cent.
43. Excluding renewal cases, over 44,000 cases have been
examined of which nearly 7,000 people have had their benefit changed.
Almost 1,000 people have seen an increase in their award whilst
nearly 2,000 people have moved off benefit altogether. The overall
level of incorrectness, excluding renewal cases, is currently
running at 16 per cent.
44. Neither the 21 per cent or the 16 per cent incorrectness
figures take account of cases which are subsequently changed again
on review or appeal. Annex H, Table H2 gives early results of
appeals and reviews.
45. These figures reinforce the need for the BIP. However,
whilst the BIP has broadly confirmed the level of incorrectness
identified by the DLA Benefit Review, it has not sustained the
suggested level of fraud. Early findings suggest that much incorrectness
is more the result of innocent mistakes by claimants, for example
in not knowing when to report changes, than in deliberate fraud.
CONCLUSION ON
THE BENEFIT
INTEGRITY PROJECT
(BIP)
46. The BIP is not an anti-fraud drive, nor is it a cuts
exercise by another name. It is also entirely separate from Welfare
Reform. It is simply about ensuring the correctness of benefit
paid now under current rules. The Benefit Review of DLA and earlier
work clearly showed a high level of incorrectness which the Government
could not ignore. It is important that the whole exercise is run
in a careful and sensitive way. Those people who are properly
entitled to the rate of DLA they are receiving should not be concerned.
