APPENDIX 14
Memorandum submitted by Judy Scott Consultancy
(EDP 21)
INTRODUCTION
The Benefit system contains three significant
barriers to work, for people with disabilities. These are commonly
described in brief summaries. People who are unfamiliar with the
detailed operation of the Benefit system and who are without direct
experience of people with disabilities may not appreciate the
extent of these barriers.
The following analysis attempts to explain how
these barriers work against the aim of employment for all. It
is focused on the needs of people with whom I have worked for
many years who have mental health problems and because of my experience
in assisting them in their endeavors to obtain employment.
My colleagues and my own contributions to the
joint response from IAHSP King's College London, address responses
to the other questions.
Please also see attached the Personal Capability
Assessment, as described by DIAL UK, which is required for reading
this response. [10]
SUMMARY
Q. Do the high numbers claiming incapacity
benefits represent hidden unemployment?
Q. Is the benefits system too complex for
the circumstances faced by people with disabilities? Should it
be reformed to reduce financial disincentives to find work.
Yes. A majority of people with mental health
problems, aspire to work and have the potential to develop the
self-belief and skills necessary to compete in the job market,
but face considerable barriers which are created by the benefit
system. These barriers are compounded by a lack of appropriate
support services and by employers' hostile attitudes. 35% of the
2.7 million incapacity claimants have a mental disorder (mental
disorder includes learning disability). This is the largest group.
The significant benefit barriers are:
1. The incapacity benefit system obliges
claimants to self-define as "incapable of work" and
to guard this status through inactivity, in order to claim an
income of between £76.95 and £85.85 a week as opposed
to £53.95 on Jobseekers Allowance.
People who have low self-confidence in their
ability to compete for and to keep a job will not put their only
income at risk through activities, which may lead to loss of incapacity
status.
2. Most incapacity claimants are limited
to 4 hours paid work a week despite the introduction of more flexible
rules for Permitted work.
Permitted work rules for claimants of incapacity
benefits are intended to allow part-time paid work of just under
16 hours a week. Work of 16 hours is the "jumping off point"
when benefits end and Tax Credits become available. The purpose
of Permitted work is undermined by the earnings disregard, which
is attached to means tested benefits, and operates with different
conditions alongside Permitted work rules. An estimated 80% of
incapacity claimants with mental health problems are in receipt
of a means tested benefit: Income Support and/or Housing Benefits
and are therefore subject to the earnings disregard.
The earnings disregard is £20 a week or £10
for each partner of a couple. Earnings above the disregard are
allowed under Permitted work rules up to £67.50 a week. However
Benefits are reduced penny for penny for earnings over the disregard.
3. There are at least seven major financial
penalties for people who come off benefits (after a claim of one
year or more) to take a job and who then lose the job and have
to make a new claim to benefits. The Linking rules often fail
to provide protection because of: bureaucratic administrative
requirements and lack of adequate guidance; limitations as to
the benefits, which are protected; time limited Linking periods
which do not address the needs of people with life long fluctuating
illness. The penalties present a significant deterrent to trying
employment.
4. A fourth significant barrier, the administration
of Housing Benefit is being addressed. Housing Benefit will, in
future, continue when a claimant moves from benefits into work.
BENEFIT BARRIERS
TO FULL
EMPLOYMENT FOR
PEOPLE WITH
DISABILITIES
Barrier 1.
The incapacity benefit system obliges claimants
to self-define as "incapable of work" and to guard this
status through inactivity, in order to claim an income of between
£76.95 and £85.85 a week as opposed to £53.95 on
Jobseekers Allowance.
People who have low self-confidence in their ability
to compete for and to keep a job will not put their only income
at risk through activities, which may lead to loss of incapacity
status.
1.1 Introduction
1.1.1 The Benefit system for those claiming
incapacity benefits promotes inactivity and social exclusion for
people with mental health problems. The system which is applied
for defining "incapacity for work" impacts on people
with mental health problems to a greater extent than does the
system for people with physical disabilities.
1.1.2 The criteria of "Incapacity for
work" gives access to higher rated benefits:
Incapacity Benefit, Income Support with a Disability
Premium, or Severe Disablement Allowance topped up to Income Support
level.
1.1.3 "Incapacity for work" was
chosen as the qualifying criteria for these three main income
benefits. A sharp and unrealistic division has been created between
those who are deemed to be capable of work and those who are deemed
to be incapable.
1.1.4 There are other options available
for defining entitlements: Disability Living Allowance for instance
has a qualifying criteria that is based on the degree of disability
and the resulting level of mobility and care needs. The level
of income is granted accordingly.
1.1.5 Strong arguments for a radical rethink
of the "incapacity for work" criteria may now be made.
The purpose of defining millions of people as incapable of work
was made by a Government with a very different agenda.
1.2 The Benefit system for incapacity
1.2.1 The criteria "incapacity for
work" is checked and monitored. There are three yearly Medical
Reviews, which are termed "the Personal Capability Assessment"
and there is continued monitoring of the claimant and their daily
activities. The Jobcentre requires the claimant to report all
planned activities to them before starting. Such activities include:
Adult Education classes, further education, training of any kind,
voluntary work, and part-time Permitted work with earnings up
to £10-£20 a week.
1.2.2 Jobcentre staff, it is anecdotally
and frequently reported, [11]advise
the claimant that if they undertake such an activity, they will
put their status of incapacity for work in doubt and will be required
to attend a Personal Capability Assessment.
1.2.3 The staff, in the Jobcentres, are
placed in something of a dilemma. The new culture for Jobcentres
is intended to encourage people towards work however there is
also a longstanding culture of suspicion around the status of
incapacity claimants. [12]Staff
have a duty to follow their regulations which have not been altered
to accommodate the new work agenda. Guidelines for Jobcentre staff
are specific. They are required to call for a Personal Capability
Assessment of a claimant for "incapacity" should the
proposed activity appear to contradict the original criteria for
finding the person incapable of work. The education, training,
voluntary work or part-time paid work will be used as evidence
in the course of the Review and may be used as the reason for
disallowing incapacity benefits.
1.2.4 The medical review process, the "Personal
Capability Assessment", is not understood by claimants with
mental health problems. Mental Health organizations have conducted
surveys and found that the process creates a high level of fear
and anxiety. A typical comment is " the Test feels like a
great big weight hanging over me just waiting to drop".[13]
People with mental health problems avoid where possible any contact
with Social Security officials. Reporting proposed activity such
as education or training is greatly feared.
1.2.5 The Doctors who conduct the Reviews
have had their standard of assessment criticized by the DWP Select
Committee. [14]Mental
health assessments are thought to be particularly unreliable.
1.2.6 Importantly, the criteria used for
the Personal Capability Assessment, for those with mental health
problems, are believed to be incompatible with undertaking beneficial
activities such as study, training, voluntary work or Permitted
work.
1.3 The Personal Capability Assessment, Mental
Health Assessment
1.3.1 10 points are required to qualify
for incapacity benefits.
| Completion of tasks
| |
| Cannot answer the telephone and reliably take a message
| 2 |
Often sits for hours doing nothing
| 2 |
Cannot concentrate to read a magazine article or follow a radio or television programme
| 1 |
Cannot use a telephone book or other directory to find a number
| 1 |
Mental condition prevents him from undertaking leisure activities previously enjoyed
| 1 |
Overlooks of forgets the risk posed by domestic appliances or other common hazards due to poor concentration
| 1 |
Agitation, confusion or forgetfulness has resulted in potentially dangerous accidents in the three months before the day in respect to which it falls to be determined whether he is incapable of work for the purposes of entitlement to any benefit, allowance or advantage
| 1 |
Concentration can only be sustained by prompting
| 1 |
The Personal Capability Assessment, Mental Health Assessment
continued
| Daily living | |
| Needs encouragement to get up and dress |
2 |
Needs alcohol before midday |
2 |
Is frequently distressed at some time of the day due to fluctuation of mood
| 1 |
Does not care about his appearance and living conditions
| 1 |
Sleep problems interfere with his daytime activities
| 1 |
| Coping with pressure |
|
| Mental stress was a factor in making him stop work
| 2 |
Frequently feels scared or panicky for no obvious reason
| 2 |
Avoids carrying out routine activities because he is convinced they will prove too tiring or stressful
| 1 |
Is unable to cope with changes in daily routine
| 1 |
Frequently finds there are so many things to do that he gives up because of fatigue, apathy or disinterest
| 1 |
Is scared or anxious that work would bring back or worsen his illness
| 1 |
| Interaction with other people |
|
| Cannot look after himself without help from others
| 2 |
Gets upset by ordinary events and results in disruptive behavioural problems
| 2 |
Mental problems impair ability to communicate with other people
| 2 |
Gets irritated by things that would not have bothered him before he became ill
| 1 |
Prefers to be left alone for 6 hours or more each day
| 1 |
Is too frightened to go out alone
| 1 |
1.3.2 I The disabilities which are described are of a
severity which would be likely to prevent the person who qualifies
for incapacity benefit from undertaking most activities outside
of dedicated mental health services. It is difficult to see how
a person with mental health problems who qualifies for 10 points
under these descriptors system would be able to do so much as
to attend an evening class, without the presence of a "minder".
1.3.3 The differing criteria and point system for physical
disabilities according to the Personal Capability Assessment,
are attached (as prepared by DIAL UK). In contrast it can be seen
that most descriptors for physical disabilities are not necessarily
incompatible with study, training, voluntary work or Permitted
work, depending on the type of activity and providing the person
has access to aids to offset their disability.
1.3.4 The descriptors for the Personal Capability Assessment
were formed at a time before the current Welfare to Work agenda.
A review of this system would be timely.
The Personal Capability Assessment, Mental Health Assessment
continued
1.4 "Capable of work" does not mean able to get
a job.
1.4.1 Approximately 168,000 claimants are disallowed
and found fit for work each year following a Personal Capability
Assessment. These people do not all obtain employment. DWP research[15]
indicates that 79% cent (across all disability groups) do not
obtain and maintain employment. There is no breakdown of the percentage
of people with mental health problems who are disallowed and subsequently
succeed or not in obtaining work.
1.4.2 People who are found to be "capable of work"
but do not in practice succeed in competing for and obtaining
work, will have been disallowed from the higher rated incapacity
benefits. They lose at least £23 to £32 a week. Some
lose much more.
1.4.3 These claimants are required to apply for Jobseekers
Allowance. This is a very low rated benefit at £53.95 per
week. Because Jobseekers Allowance is a means tested benefit,
some may find that they are not entitled to any benefit at all.
1.4.4 Jobseekers Allowance conditions require the claimant
to demonstrate that they are actively seeking work. People with
a history of mental health problems will certainly face prejudice
and hostility from most prospective employers. The process of
being obliged to apply for employment, when followed by repeated
rejections, is distressing and has a detrimental effect on mental
health.
1.4.5 This process is felt to be a punishment for having
tried to progress towards work. The low income brings immediate
problems with paying bills and day to day living costs. These
difficulties cause high anxiety and the claimant is likely to
relapse. Surprisingly there has been no monitoring or evaluation
of this process on the mental health of such people.
1.5 Impact of the system on motivation to become employed
1.5.1 People with mental health problems exchange stories
about their bad experiences with Social Security. Just one incident
in the locality, where person is disallowed and is required to
claim Jobseekers Allowance will be become the local "knowledge".
Others will base their plans on the experiences of their acquaintance.
Regrettably, there appears to be an absolute lack of trust in
the DWP to provide the Benefits security as promised, in any part
of the UK.
1.5.2 As a result of the fear of losing benefits, people
with a low self- confidence in their ability to work, will often
refuse to undertake any activity which (in their mind) heightens
the risk of being disallowed for incapacity benefits. This is
exactly the type of activity which could allow the development
of self confidence and ability to get and keep a job.
1.5.3 People shy away from mainstream options in education,
voluntary work or High Street part-time jobs, preferring the relative
safety of sheltered workshop situations where there are staff
to act on their behalf should the Jobcentre attempt to stop their
incapacity benefits.
1.5.4 The costs of operating a system where people are
so afraid of demonstrating ability are very high. Many people
are prevented from exploring their potential, from developing
self-belief and skills to compete for employment. They are steered
into inactivity and a lifetime of dependence on the benefit system.
Barrier 2.
Permitted Work is intended to allow incapacity benefit claimants
to work for less than 16 hours and to earn up to £67.50.
In practice an estimated 80% of incapacity claimants are limited
to four hours or two hours work and earnings of just £20
or £10 a week.
2.1. Introduction
2.1.1 Permitted work rules were introduced in April 2002
to replace the cumbersome Therapeutic earnings system with a modern
flexible and swift system, promoting part-time work for those
on incapacity benefits.
2.1.2 Permitted work, higher level or Supported Permitted
work allow claimants of incapacity benefits to undertake part-time
paid work of just under 16 hours a week and to earn up to £67.50
providing certain conditions are maintained. Work of 16 hours
is the "jumping off point" when benefits end and Tax
Credits become available. The earnings level is tied in to the
Minimum Wage rate. When the Minimum wage is up rated so is Permitted
work.
2.1.3 The purpose of Permitted work is undermined by
the earnings disregard, which is attached to means tested benefits.
An estimated 80% of incapacity claimants with mental health problems
are in receipt of a means tested benefit: Income Support and/or
Housing Benefits.
2.1.4 The means tested benefits disregard on earnings
is £20 a week for a single person and £10 for each partner
of a couple. Earnings above the disregard are allowed under Permitted
work rules up to £67.50 a week. However Benefits are reduced
penny for penny for earnings over the disregard.
2.1.5 As the Minimum Wage applies to Permitted work,
80 per cent of incapacity claimants are effectively restricted
to either four hours or two hours paid work a week.
2.1.6 Earnings above the £20 or £10 have to
be declared first to Income Support. The Giro book must be sent
back for a reduction. The rate of reduction is penny for penny
over £20 a week.
2.1.7 If the claimant does not receive Income Support
they must declare earnings over £20 to the local authority
Housing Department. The rate of reduction is 65 pence over £20
for Housing Benefit and 20 pence over £20 for Council Tax
Benefit. Many such Departments have a very high error rate and
slow processing. Notification may lead to the Benefits being stopped
altogether pending a reassessment. If the rent is stopped eviction
notices are now issued within one month. If Council Tax payments
are stopped the debt is referred to the Courts within six weeks.
2.2 Impact of the system on people seeking to try part-time
work during a claim to incapacity benefits
2.2.1 Failure to join up policies within the different
benefit departments of DWP has a considerable impact. Most people
are prevented from trying to sustain work at a rate which is close
to the "jumping off" point of leaving benefits for employment
of 16 hours plus a week with the assistance of Tax Credits. The
development of self-belief in a capacity to keep a job is crucial
to people who are considering employment, and two to four hrs
work is insufficient.
2.2.2 A few people do opt to earn the full £67.50
and to have these earnings over £20 taxed at 100%. These
people experience further problems where they have fluctuating
health problems and they do not earn on a regular weekly basis.
Intermittent earnings require the claimant to continually return
their Giro Book or continually notify Housing Benefits of variations
in their income. The resulting chaos leads to loss of continuity
of Benefit income and of housing tenure, financial stresses and
anxiety.
2.2.3 There is a further damaging effect to the agenda
of full employment. Part-time employment in the High St is rarely
offered for four hours a week or £20. Most mainstream part-time
jobs ask for at least one days' work on a Saturday. People are
thereby constrained to working within sheltered workshops for
the mentally ill. They are prevented from moving out of the disability
setting and into the mainstream.
2.2.4 The purpose of Permitted Work is thus undermined
for most claimants. Therapeutic work was accessed by just 1% to
2% of all claimants before the changes to Permitted work in April
2002. It is to be regretted that despite the welcome improvements
made for Permitted work, the Governments' agenda to progress more
people from incapacity benefits into work will continue to be
wrecked by this lack of joined up planning between Departments.
Barrier 3.
There are at least seven potential financial penalties for
people who come off benefits to take a job and who then lose the
job and have to make a new claim to benefits. The Linking rules
fail to provide protection because of: bureaucratic administrative
requirements; limitations as to the benefits, which are protected;
time limited Linking periods, which do not address the needs of
people with life long fluctuating illness.
3.1 Financial penalties imposed if no Linking rule protection
3.1.1 The incapacity benefit claimant who leaves benefits
for work without the protection of a Benefit Linking Rule, faces
at least seven potential financial penalties should they lose
their job and need to make a new claim to Benefits:
(i) Claimants of Income Support or Incapacity Benefit
after one year of a claim become entitled to higher rated benefits.
If they interrupt their claim with a period in work and then make
a new claim for incapacity benefits they will be paid at the lower
short term rates. Income Support loses £23 a week Disability
Premium. Incapacity Benefit loses £17.40 or £24.40 a
week. There is a one year period required in order to re-qualify
for the higher rates.
(ii) Claimants of Incapacity Benefit who after a year
on the benefit, interrupt their claim with a period in work may
not be able to re-qualify. If they do not work for long enough
or earn enough to obtain the NI Credits required to re-qualify
they will have to claim Income Support instead, losing up to £31.35
a week for the following year. Some will lose a lower sum on a
permanent basis. Those with a partner who is in work may not be
entitled to any benefits at all, as Income Support is means tested
(unlike Incapacity Benefit)
(iii) Claimants of Incapacity Benefit, with a continuous
claim since 1995, receive a benefit, which is non-means tested
and which is not taxable. If their claim is interrupted the benefit
loss is permanent.
(iv) Claimants of Incapacity Benefit may receive an occupational
pension in addition to the benefit providing they have not broken
their claim since the legislation on pensions was introduced.
If they interrupt their claim, they will lose 50 pence of benefits
for every £1 over £85 a week of pension. Loss is permanent.
(v) Claimants of Severe Disablement Allowance will lose
entitlement permanently if they stop their claim. Those with a
partner who is employed, earning at or above the modest level
of Income Support, will lose all benefit entitlement.
(vi) Claimants who have Income Support paying their mortgage
interest will, if they interrupt their claim without the protection
of a Linking rule, find that when they make a new claim to benefits
that mortgage interest will not be payable for 39 weeks (If the
mortgage was taken out since 2 October 1995 or in full for 26
weeks for others). These people are at high risk of losing their
home.
(vii) Housing Benefit claimants, who live in private accommodation,
may lose their entitlement to the full rent if the local reference
rent is lower. (National average shortfall is now £12 a week
which must be paid from Benefit income)
3.2 The three Linking rules and the limitations to benefit
protection
3.2.1 Qualifying requirements for benefit level protection
for all three Linking rules.
Reinstatement of incapacity benefits is not, as often implied
in DWP literature, an automatic right for people who have tried
and failed to sustain employment following a claim to incapacity
benefits. If the work ends a new claim must be made for each benefit
claimed. A Medical Certificate certifying "incapacity for
work" must accompany the new claim. If the GP will not provide
the certificate, because perhaps the claimant has recently worked,
the protection of the Linking rule does not take effect.
3.2.2 The eight week Linking rule
Little or no publicity is provided to claimants on this useful
but limited Linking rule. It is useful because there is no qualifying
period required before the Link may be used, and all benefits
are protected providing the period of employment is shorter than
eight weeks.
3.2.3 The 52 Week Linking rule
(i) All benefits are protected by the 52 Week Linking
rule if it can be used.
(ii) Brief and misleading publicity is available in one
DWP leaflet. [16]Most
Jobcentre staff are unclear how this rule operates. The official
DWP Guide runs to 85 pages because of the complexities designed
into the operation.
(iii) The claimant must qualify to use the 52 Week Linking
rule by the length of their prior claim to incapacity benefits.
196 days of claim are required before the rule can be used. The
52 weeks "hour glass" starts running from the first
day that benefits end. If the first attempt at working should
fail, and the person should have to return to benefits for a while,
this period on benefits is not added to the year of protection.
The 52 Weeks of protection will only apply to those able to maintain
continuous employment.
(iv) There is a bureaucratic process required to register
to use the 52 Week Linking rule and the DWP Leaflet fails to provide
adequate guidance. The claimant must start the employment within
one week of benefits ending. The claimant must inform the Jobcentre
that they have started work, after the job starts and within four
weeks of benefits ending. If the claimant informs the Jobcentre
that they will be starting work the next day, their protection
under the Linking rule is voided. Equally if they inform the Jobcentre
one day late that they have started work the Linking rule will
not apply. There are a number of reports from people who believed
that they were protected by the 52 Week Linking rule but who found
that they were not. Jobcentre failure to maintain their records
was included in the reasons for failure of this protection.
(v) After 52 Weeks of protection the Linking rule ends.
The person who loses their job 52 weeks and one day later does
not have their benefit entitlements protected.
(vi) A further 196 days in receipt of benefits are required
before the Linking rule may be used again.
(vii) DWP Research indicates that for most ex-claimants
of incapacity Benefits, it will prove easier to obtain a job than
to keep the job.
(viii) Mental illnesses such as Schizophrenia and Bi Polar
disorder and some forms of depression frequently reoccur throughout
a lifetime. Opportunities for employment and "windows"
of good mental health do not neatly coincide with qualifying periods
on benefits.
(ix) The bureaucracy and unnecessary regulations attached
to the 52 Week Linking rule undermine the good intentions and
purpose for which it was introduced.
3.2.4 The two year Linking rule (also known as the 104
week Linking rule) attached to a claim for Disabled Persons Tax
Credit
(i) Publicity issued by DWP does not clarify that this
Linking rule does not cover Income Support, and therefore mortgage
interest, nor that it does not cover Housing Benefit. The protection
is therefore not extended to those with housing costs in the private
sector, and those who receive Income Support either as their main
income benefit or as a top up to Severe Disablement Allowance.
(ii) Incapacity Benefit and Severe Disablement Allowance
are protected, for as long as the Tax Credit is granted. If the
Tax Credit ends, because of improved health for instance, or an
increased level of earnings, the two year Linking rule protection
also ends.
3.3 Is it cost effective to penalise disabled people who
may only be able to work intermittently?
Is it just?
3.3.1 Financial savings which are gained by the Exchequer
from the reduction of the benefit entitlements of disabled people
may only be found from those who have tried to work but who have
failed to maintain the employment and have therefore returned
to benefits.
3.3.2 The numbers of people who move from benefits into
employment is governed, to some extent, by their motivation to
try work. If there is an increased risk to their long- term benefit
entitlement, one could assume that motivation may be decreased,
numbers trying work are few and therefore savings are low.
3.3.3 Many disabled people have fluctuating health. They
have periods when they are able to work and periods when this
is not possible. This applies in particular to people with mental
health problems whose future prognosis is usually unpredictable.
3.3.4 The financial costs of penalising disabled people
through a reduction of their benefit income may well be considerably
higher than the supposed savings. If many disabled people could
work as and when health allowed and were truly guaranteed benefits
"security when they need this" the level of unemployment
would certainly decrease.
3.3.5 A Benefit Linking rule which matches the medical
view of the duration of the disabling condition would receive
much support. People with short- term illness would not require
any special conditions. Those with life long conditions would
be guaranteed benefits security.
6 January 2003
10
Not printed. Back
11
By Workshop participants at Conferences throughout UK. Back
12
By Customer Service staff of DWP throughout UK. Back
13
By MIND Survey 2001 Alison Cobb Policy Officer. Back
14
Social Security Select Committee in considering SEMA contract. Back
15
DWP Research Report No 86 Leaving Incapacity Benefit. Back
16
WK1 Oct 2002 Financial Help if you work or are looking for work
Page 17. Back
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