Examination of witnesses (Questions 152 - 159)
TUESDAY 7 JULY 1998
MS PAULINE
THOMPSON, MBE,
MS MARILYN
HOWARD and MR BRIAN
MCGINNIS
Chairman
152. Good morning, ladies and gentlemen.
May I declare open the public session of evidence on our most
recent tax and benefits inquiry and welcome our guests this morning.
We have Pauline Thompson, Director of the Disablement Income Group;
and we have our friend, Marilyn Howard, back again in a new guise.
We welcome her too. We also have Mr Brian McGinnis, from the Disability
Benefits Consortium. We are concentrating this morning on the
very useful submissions that have been made by the Disability
Benefits Consortium and the Disablement Income Group on the inquiry
into tax and benefits, with particular reference to the new proposed
Disabled Person's Tax Credit that the Chancellor announced recently
in his Budget. I was just saying to the witnesses before we came
in, that on looking at these documents I have realised what a
complicated set of conditions now apply in the area of disability.
I think the Committee could be tempted—although I think
we will resist the temptation - to have a full-blown inquiry into
this. It is, of its own, a subject that merits special attention;
and we did think it was necessary, in the course of our implementation
phase of our tax and benefits report, to look at where the Government
had arrived at in its provisions for this particular aspect of
the reforms which they are bringing forward. We are very grateful
to have your assistance in so doing but it would help us enormously,
Pauline, if I could ask you to say a bit about how far you have
got in knowing what is in the Government's mind, sharing that
with us, and also I will ask Marilyn and Brian to do the same.
Then we have areas of interest to ourselves which we would like
to pursue in the questioning thereafter. This is really an opportunity
for us to try and learn from what you know and maybe a bit of
vice versa. May I ask Pauline on that basis to make a short opening
statement, and see how things go from there.
(Ms Thompson) Thank you, Chairman. In actual fact,
what we know is very limited. Much of what we put in our submission
was based on gut feeling that we had about some of the issues
which needed to be addressed as we move towards the Disabled Person's
Tax Credit. In a way, all we have been able to do is to look at
the strengths and weaknesses of DWA itself and think about how
those might be addressed or carried forward into a new system.
We have not been engaged in any discussions about the new tax
credit. We have not been asked for our views on the way forward,
although I know that discussions are going on obviously with Inland
Revenue and the Department of Social Security now. This perhaps
is one of the most important points that I want to make. This
is a hugely complex area and people who have something to contribute,
some experience in this, really ought to be being consulted by
Inland Revenue and the Department as the plans are taken forward.
This is because we can see issues that need to be dealt with before
there is a transfer. What worries me particularly, Chairman, is
that the staff at Preston might go home on the Friday night, having
been working for the Benefits Agency; and arrive at work on the
Monday morning, working for the Inland Revenue, that being basically
it. There is a transfer over the weekend with all the problems
of the DWA replicated in the new system. Administratively it might
be convenient to do that, but in terms of making progress with
the tax credit, clearly it is not a good idea. May I say something
nice about DWA before we despatch it to history. The concept of
it was really very good. The idea of getting extra help to people
whose disability put them at a disadvantage at work, and meant
at the end of the day inevitably being on low wages, is a very
fine concept indeed. The fact that it has not worked as well as
it should have done has been mainly due to problems of accessibility.
We need to deal with that. We need to make sure that we do not
have the same problems as we move towards a new tax credit, but
as an idea it was excellent and certainly DIG supported it at
the time.
153. Thank you. Marilyn, you have a particular
perspective because you have experience of a whole range of benefit
problems, and you have seen benefits come and go in the past.
How do you think this one is shaping up by way of introducing
a benefit in a successful way?
(Ms Howard) We know very little about the detail.
All we really know is that the benefit tapers will be reduced
from 70 per cent to 55 per cent, so that will mean that people's
benefit tapers off at a more gentle level than DWA. The thresholds
will be higher so people will be able to earn more before their
tax credit is taken away. We do not know very much at all about
the detail, but certainly the tax credit is a good opportunity
to address some of the deficiencies in the Disability Working
Allowance and make it work in the way it was intended—that
is, to help people who are disabled and therefore at a disadvantage
in getting work and staying in work—to enable them to move
from benefit into employment and to stay there if they become
disabled when they are in work. So we see it very much as an opportunity
to make some of the positive changes that need to be made.
154. Brian, what is your perspective?
(Mr McGinnis) I would like to build from the point
that Pauline made about the transfer from Department of Social
Security/Benefits Agency to Inland Revenue. The end product of
this and of other measures is to enable disabled people to stay
in work, to get jobs, and having got them to keep them. It is
always tempting to see this particular bit of the strategy as
the way of doing it, but it is not. In other words, if you are
going to achieve that end result you are going to have to use
a range of measures to do it, including the things we have at
the moment like the income support disregard, the therapeutic
earnings limit, and so on. In this country, and in every country,
there are and always are going to be a range of means of helping
disabled people to move between not being in work and being in
work. That being so, it is not simply a question of saying, "Here
is a solution to that problem. We transfer it from Benefits Agency
to Inland Revenue." It is saying that once it has been transferred,
if that is what has happened, Inland Revenue have to work with
what is happening still in the social security field to achieve
the end result. If they do not do that, you could end up with
something which is worse than we have now. At the moment the problem
is co-operation within a single department. In the future we are
going to have the problem of co-operation between two different
departments. The other thing which Pauline has touched on, and
which runs with that, is that there is a long tradition now in
the Department of the Social Security of working with the voluntary
bodies and the disability field. That is not well established
with Inland Revenue. That has to be fought for.
155. May I make it clear in my own mind.
You agreed, in principle, with the targets that were set for DWA
originally. You think it did have a proper purpose when it was
set up originally but you do not believe that it has fulfilled
its potential, if I understand you rightly, because you think
there are problems about accessibility. What did you mean by that
and how can the new tax credit deal with that properly, do you
think?
(Ms Thompson) The main problem around accessibility
is the qualifying benefits rule, because of the fact that many
people who might otherwise be eligible could not access it through
that route. What is interesting is that 64 per cent of people
claiming Disability Working Allowance, in fact, access it from
Disability Living Allowance; so in terms of people accessing it
from an out-of-work benefit like SDA or IB, obviously it has had
a limited impact. Yet originally the supposition was that the
majority of people would access it from an out-of-work benefit.
The other problem, of course, has been in the treatment of partner's
income or earnings as well which might have prevented someone,
who might have otherwise qualified, from actually achieving any
level of DWA. At one time DIG did describe the means test as pretty
vicious. It was at one time. There have been easements since but
that has been one of the other complicating factors. Both of those
things need to be looked at in the context of the new tax credit
so that it does not suffer from the same problems of inaccessibility.
156. Do you think these are the two things
that have to be concentrated on to try and get the tax credit
more accessible?
(Ms Thompson) I think these are two of the things
we need to concentrate on but there are more issues which we did
raise in our paper.
157. The memorandum that the Disablement
Income Group submitted interested me by saying that single men
have been particularly helped by DWA. Have you any idea why that
should be the case? Is there a reason for that?
(Mr McGinnis) May I join in because I work for
Mencap and the group that has benefited most from DWA are people
with learning disability. The reason is that they do not have
a family to support. They are, by and large, single people, men
or women. The majority of them, despite being adults, live with
their families; so their housing and other expenses are at a fairly
modest level. They tend to be employed in lower paid jobs so where
DWA has worked, it has worked for people who do not have family
responsibilities, who are in low paid jobs and who intend to stay
in low paid jobs at a similar earning level, and who do not have
high outgoings. At that level it has actually been quite effective.
I think it illustrates Pauline's point that it is going to apply
more effectively to a wider range of people, including those already
in jobs, because 90 per cent of people with severe learning disability
are not in employment. It is a disability group within which,
(loosely what is called unemployment), is at its highest level.
158. Do you think that if we deal with these
accessibility problems, that the take-up problem which the DWA
has suffered from, will be sorted out and the tax credit introduced?
Are you confident that this will be the case?
(Mr McGinnis) No, if I may add one thing, before
passing back to Pauline. There are two things. Besides making
it more accessible so that more people are going to be eligible
for it, as opposed to the very high level of people who have applied
but have not been eligible, you also need greater awareness of
it. Part of that awareness is simple publicity. Part is the sheer
complexity of understanding which bit of the benefit system is
going to help you, in your circumstances, into a job or to stay
in the job you have already.
159. I want to move on to look at the take-up
in a little more detail but finally, if I may ask you a general
question about the process that the Benefits Agency have used
for DWA and how that could be potentially improved, or otherwise,
as the case may be, in future. Do you think DWA has been well
administered, in general, by the Benefits Agency, since it was
introduced?
(Ms Howard) One of the difficulties is that because
so few people claim, a number of organisations have very little
practical experience of dealing with people's problems and the
claiming process. However, I think there is a point at principle,
in that claiming should be as easy as possible, forms should be
available in different formats, so that people with visual impairment
or learning disabilities can actually understand what it is they
are claiming for and how they can access a claim. I think some
people have had problems but certainly from DIG's perspective
it has not been a major issue in terms of people phoning up and
saying, "How do I claim this?"
(Ms Thompson) I did look at our Advisory Service
statistics yesterday as I was preparing for this session. Out
of the 1,900 cases that we had to work with last year there were
only six enquiries about Disability Working Allowance. I think
that probably puts it in perspective as far as we are concerned.
Chairman: Absolutely.
Let us pursue this question of take-up. Karen Buck has some questions.
|
