Select Committee on Work and Pensions Written Evidence

Memorandum submitted by Judy Scott Consultants


  I specialise in the incapacity benefit system as it affects people with mental health problems who want to move towards and into work.

  It is known that very many people with mental health problems desperately want to work and to come off benefits—however the reform proposals do not appear to build on this motivation—indeed some aspects of the reform proposals appear to be unjust, and liable to have the opposite effect intended.

  My knowledge and experience of people with mental health problems who want to work was gained in the development and management of a series of employment support schemes for MIND. Subsequently, as an independent consultant, I have specialised in advising on how to negotiate the benefits system for people with mental health problems who want to move towards and into work, and on "involvement", Patient and the Public Participation. In this capacity I have advised national voluntary agencies, Mental Health Trusts, government arms-length agencies, the Social Exclusion Unit and the Department of Health.

  Recent publications include: a research study "Addressing Disincentives to Work associated with the welfare benefits system in the UK and abroad" published by the Social Enterprise Partnership GB in association with King's College London;[7] a benefits guide for mental health professionals who advise their clients on moving towards and into work "the Way to Work", published by the Disability Alliance; and a guide on reconciling the Minimum Wage Act with the benefit system "Paying a Real Wage to people in Work Projects" published by the MCCH Society.


2.1  People with serious mental health problems

  A first onset of a serious mental health problem is often during the late teens or early twenties. Many people don't start to think again about a working life until some years later. By this time the main barriers to work are likely to have become:

    —  A lack of qualifications, skills, work history, work references and lack of self-belief and social skills sufficient to compete for jobs in the open market.

    —  A history of incapacitating relapses, requiring medical intervention, hospital admission or sedating medication, that have devastated self-confidence.

    —  The fear of future relapses, but with the hope of periods of reasonable health between relapses.

    —  Poverty, and chronic anxiety about maintaining a continued income from incapacity benefits.

  People who qualify for incapacity benefits through the medical test (rather than be exempted from testing due to the severity of their condition) must be assessed for their condition by a DWP-appointed Doctor.

2.2  How ill do people have to be to qualify for an incapacity-based benefit?

  The DWP test for entitlement for an incapacity-based benefit is called the Personal Capability Assessment. There are tests for a range of physical conditions and tests for mental health conditions. These can be combined.[8]

  Entitlement to incapacity benefits for mental health is scored on the basis of 25 possible descriptors across 4 groups of conditions.

  The Mental Health Assessment descriptors require a score of 10 points for the person to qualify for incapacity benefits. A maximum of 2 points are available in each group of conditions. The following descriptors, describe some of the mental health conditions to be identified in the assessment process and the points that are allocated to each:

    —  Cannot answer the telephone and reliably take a message 2 points.

    —  Cannot concentrate to read a magazine article or follow a radio programme 1 point.

    —  Overlooks or forgets the risk posed by domestic appliances or other common hazards due to poor concentration 1 point.

    —  Does not care about his appearance and living conditions 1 point.

    —  Avoids carrying out routine activities because he is convinced that they will prove too tiring or stressful 1 point.

    —  Frequently finds that there are so many things to do that he gives up because of fatigue, apathy or disinterest 1 point.

    —  Is scared or anxious that work would bring back or worsen illness 1 point.

    —  Gets upset by ordinary events and results in disruptive behavioural problems 2 points.

    —  Cannot look after himself without help from others 2 points.

    —  Prefers to be left alone for six hours or more each day 1 point.

    —  Is too frightened to go out alone 1 point.

  Entitlement to incapacity benefits for a physical condition is scored on the basis of 89 possible descriptors in 14 groups of conditions.

  The Physical Assessment descriptors require a score of 15 points for entitlement to incapacity benefits. However, unlike the mental health conditions, the full score of 15 points for a single condition is available in each group of conditions.

  Here are some of the physical conditions that are described and the points that are allocated to each.

    —  Cannot walk more than 50 metres without stopping or severe discomfort 15 points.

    —  Cannot walk up and down a flight of 12 stairs 15 points.

    —  Cannot stand for more than 10 minutes before needing to sit down 15 points.

    —  Cannot rise from sitting to standing without holding onto something 7 points.

    —  Cannot tie a bow in laces or string 10 points.

    —  Cannot raise one arm above his head as if to reach for something but can with the other 6 points.

    —  Cannot see well enough to recognise a friend across the room at a distance of at least 5 metres 12 points.

    —  Has an involuntary episode of lost or altered consciousness at least once a month 15 points.

  The descriptors above show that a person who qualifies for incapacity benefit for a mental health condition is very likely to be at far greater disadvantage in the labour market than some people with some physical conditions.


3.1  How can people on incapacity benefits with mental health problems compete for the job vacancies that are available?

  Research has shown that many of the 2.7 million people who claim incapacity benefits tend to have low educational achievements, few qualifications, in addition to poor health and lack of work history or work references, and that there are higher numbers of people claiming incapacity benefits in areas of higher than average unemployment.

  The Government is not planning to increase the number of jobs available in the UK. There are about 628,000 job vacancies, but about 800,000 people who are registered unemployed; there are around 700,000 lone parents some of whom the Government hopes to encourage back to work; and in addition the Government has set a target of 1million incapacity benefit claimants who are to be encouraged to work.

  It is not clear how the Government targets are to be reached without an increase in the number of jobs.

  In these circumstances each person on the new benefits and the old incapacity benefits will find themselves competing for each job vacancy with other candidates who will have better health, and possibly a recent track record in work with references. However, the job vacancies may not be in their town and they may not have the qualifications required for the job.

  People with mental health problems of the severity described by the qualifying criteria in the Personal Capability Assessment are clearly at considerable disadvantage in the job market. If some are to stand a chance of competing for a job they must be able to offer the employer a reasonable standard of education, skills or proven ability to develop new skills, some evidence of a work history and references, social skills, assertion and self confidence.


4.1  Outline proposals for incapacity benefit reforms

  The outline proposals for people who will claim the equivalent to incapacity-based benefits today, suggest that new claimants will claim a new benefit that may be named "the Rehabilitation Support Allowance". This Allowance will be made available to those who pass the Personal Capability Assessment. There is some mention of looking for additional "capability descriptors" so that people's abilities can be identified and serve in discussions with the Personal Advisers about moving towards work. Those who are exempted from passing the test (about 600,000 people are currently exempted) will claim a differently named benefit "the Disability and Sickness Allowance". (These initial plans for two benefits may be revised in the Green Paper when it is published end of October.)

4.2  Rights and responsibilities

  It is proposed that people who are granted the Rehabilitation Support Allowance and the Disability and Sickness Allowance will be subject to:

    —  Work-focused interviews, unless these are waived as inappropriate at the time or deferred for good reason;

  Those who claim the Rehabilitation Support Allowance will be required to:

    —  Agree to participate in work-related activity unless they have good reason for refusing.

4.3  Penalties for those who do not fulfil their responsibilities

  Outline proposals appear to give the Personal Adviser the authority to dock the benefits of those who refuse to undertake work-related activities without (a perceived) good reason.

  The proposals appear to require the Personal Adviser to threaten people with mental health problems (amongst others) who in the main want to work, and to coerce them into work-related activities.

4.4  Implications for people with mental health problems

  Unless there is a change to the current system for assessment, people who have been found by a Doctor to have a severe mental health condition through scoring 10 points and therefore who may have qualified with the following descriptors:

    —  Cannot answer the telephone and reliably take a message, and who

    —  Cannot concentrate to read a magazine article or follow a radio programme, and who

    —  Overlooks or forgets the risk posed by domestic appliances or other common hazards due to poor concentration, and who

    —  Does not care about their appearance and living conditions, and who

    —  Avoids carrying out routine activities because he is convinced that they will prove too tiring or stressful, and who

    —  Frequently finds that there are so many things to do that they give up because of fatigue apathy or disinterest, and who

    —  Is scared or anxious that work would bring back or worsen illness, and who

    —  Prefers to be left alone for 6 hours or more each day, and who

    —  Is too frightened to go out alone,

will be required by the Personal Adviser to undertake a work-related activity or have their benefits cut to £56.20 a week.

  It can only be supposed that those who drew up these initial plans were not advised about the severity of the conditions that are required to qualify in the mental health assessment.

  The Personal Adviser will not be in a position to make an adequately informed decision, which effectively contradicts that of the DWP-appointed doctor. People with mental health problems will be terrified. The anxiety that this would cause to many is certain to lead to a deterioration of mental health.

4.5  Will the proposed reforms enable more people on incapacity-based benefits improve their employability?

  An old saying comes to mind here: "one willing volunteer is worth ten conscripts". A proposal to threaten benefit cuts to a person with a severe mental health problem who is already motivated to work seems unnecessary and likely to prove counterproductive.

  This proposal to coerce people with a mental health problem (of the degree described in the scoring system) into work-related activity is unrealistic and would represent an injustice. The only people to benefit would be the organisations running sheltered workshops as these would have to be funded for a huge expansion.

  If however, the Government were able to rethink these early proposals and set about removing the existing barriers to work-related activities, extending the health condition management support as trialled in Pathways to Work and make funding available for vocational services, with means for support to move into and sustain work, this would be applauded and welcomed by all.


5.1  Developing employability

  Employers generally look for a reasonable standard of education, skills or proven ability to develop new skills, some evidence of a work history and references, social skills, assertion and self confidence.

  However, the operation of the benefit system for those who claim incapacity-based benefits, corrodes abilities and self-confidence and prevents and deters people from becoming employable.

  The outline plans for incapacity benefit reforms have not included any mention of diminishing these barriers to work.

  5.2  There are six main benefit barriers that appear to remain to be carried forward in a reformed benefit system:

    —  Fear that any work-related activity will put entitlement to incapacity benefits at risk, including study, training, voluntary work or part-time Permitted Work.

    —  Very low earnings disregards of £5, £10, or £20 prevent people getting a part-time job as a foothold in open employment.

    —  The complexity of the benefit system confuses Jobcentre Plus staff and their customers alike: people do not know what they are allowed to do.

    —  People with uncertain health do not want to risk trying employment if they put their future benefit income at risk.

    —  People with a severe disability would be worse off in employment unless they can earn a high wage.

    —  A Marginal Deduction rate of 97 pence in the £ for people on a very low wage.


6.1  People with mental health problems that claim incapacity benefits have had no rights to try and better themselves

  Fear of losing their income from incapacity benefits has deterred people from gaining the qualifications, skills, work histories, work references and self-belief and social skills sufficient to compete for jobs.

  The fear is caused by Jobcentre Plus procedures. All work-related activities must be reported to Jobcentre Plus before starting. Jobcentre Plus staff are instructed to send a person for a Personal Capability Assessment if the activity that they report appears to indicate that their condition may have improved.[9]

  People with mental health problems tend to say: "There is no way I'm raising my head above the parapet". They mean by this, contacting Jobcentre Plus for any reason other than for their benefit claim.

6.2  The Personal Capability Assessment descriptors for a mental health condition are not compatible with work-related activity

  For people with mental health problems, who qualified for incapacity-based benefits through the Personal Capability Assessment, nearly all work-related activities, outside of a specialist supported mental health service, will contradict most of the qualifying descriptors. How for instance can a person attend college if they:

    —  Cannot answer the telephone and reliably take a message, and

    —  Cannot concentrate to read a magazine article or follow a radio programme, and

    —  Overlook or forget the risk posed by domestic appliances or other common hazards due to poor concentration, and

    —  Do not care about their appearance and living conditions, and who

    —  Avoid carrying out routine activities because they are convinced that they will prove too tiring or stressful, and

    —  Frequently find that there are so many things to do that they give up because of fatigue apathy or disinterest, and

    —  Are scared or anxious that work would bring back or worsen illness, and

    —  Prefer to be left alone for six hours or more each day, and

    —  Are too frightened to go out alone.

  Unless people with mental health problems have access to a dedicated Vocational service those who are not well enough to apply for employment tend to remain within mental health service sheltered workshop provision rather than becoming involved in mainstream activities.

  There is a clear disincentive to moving into the mainstream: most forms of activity outside of a mental health service setting may trigger a review of incapacity. The descriptors of the mental health symptoms in the Personal Capability Assessment, are generally incompatible with, say, attending college, volunteering or part-time paid work in open employment. Some organisations have gone to some lengths to persuade Jobcentre Plus that it is counterproductive to send people for a review, and in these districts people have been able to study, train and gain some work experience, but these are far and few between.

  In each locality stories circulate about people who were struck off incapacity benefits after starting a course at college or doing voluntary work or part-time paid work. And for every person who is disallowed a large group of people are deterred from engaging in work-related activity.

6.3  The proposed reforms will if implemented, appear to present claimants with mental health problems with something of a Hobsons Choice:

    —  people may put their entitlement and higher benefit rate at a risk of cuts if they appear to refuse to undertake work related activity (although the severity of their condition could be the cause of refusal); and

    —  people may also put their entitlement at risk if they do manage to undertake a work related activity and trigger a Personal Capability Assessment.

6.4  The penalties ensuing from disallowance of incapacity based benefits are severe

  People who are disallowed an incapacity based benefit may be able to claim Jobseekers Allowance at £56.20 a week at present, providing they actively seek work. Those with a partner in work may not be entitled to any benefits at all.

  People without qualifications, with low skills and lacking self-belief have difficulty competing for jobs. 80% of those disallowed incapacity benefits do not succeed in getting a job. The process of repeatedly applying for jobs only to be rejected is demoralising—very bad for ones mental health.

  If the proposals for the Rehabilitation Support Allowance are implemented people who have their benefit cut will not be registered to swell the ranks of the unemployed but remain on the "sick list".

  They will, however, remain as ill or as disabled as before but cost less to the Exchequer.

  £56.20 a week to live on makes it virtually impossible to pay the household bills, to eat or clothe oneself. The Government will be generating a new form of social exclusion.


7.1  Part-time work in open employment is prevented

  Part-time small jobs in open employment are not accessible for people on means tested benefits who are only able to earn £5 or £10 or £20 a week before their benefits are reduced penny for penny over. People are prevented from getting a foothold in work.

  A small survey with the main chain stores and supermarkets, found that they sometimes offer part-time work for a minimum of six to seven hours a week as a one-day shift. Even at the lowest wage possible this represents pay of £30.30 to £35.35 a week.

  People who are professionals are not able to get back into work with part-time paid work if they claim incapacity benefits. Their rate of pay per hour is above the earning disregards.

  Whilst the Department of Work and Pensions balk at the theoretical costs of raising the demeaning earnings disregards, hundreds of thousands of people who might be getting a foothold in employment and off benefits are forced into inactivity and corrosion of their skills and self-confidence.

7.2  Permitted Work for up to 15 hours a week is not available to most

  "Permitted Work" is the name given to work that people in receipt of incapacity based benefits are allowed to do if they follow the rules and procedures. Permitted Work was introduced in 2002, replacing the previous rules "Therapeutic Earnings".

  Permitted Work allows three forms of work: Permitted Work, lower level with earning up to £20 a week; Permitted Work, higher level, with earnings up to £81[10] a week for six months with a possible six months extension; Supported Permitted Work with earnings up to £81 a week if the claimant has a Support Worker.

  However, access to Permitted Work, higher level and Supported Permitted Work and therefore to paid work of 15 hours a week as intended is not available for most people who claim incapacity benefits.

  Earnings of up to £81 a week (without penny for penny reductions of a means-tested benefit) are only available to an estimated 20% of claimants for incapacity who do not either claim Income Support nor Housing Benefit nor Council Tax Benefit, nor live in residential care home with discretionary local authority charging.[11]

  A recent DWP commissioned evaluation of Permitted Work scrutinises where Permitted Work has successfully supported people into full-time employment but fails to estimate the percentage of incapacity benefit claimants who can and cannot use Permitted Work as intended.[12]

  The Government has made a commitment to look at the "five to 16 hours gap" but there has been no news as yet.

7.3  Random and discriminatory rules limit people with equal levels of ill-health and disability to £5 or £10 earning disregards

  People on Income Support for incapacity have lower disregards in some circumstances than those on Incapacity Benefit, for no logical reason.

  Income Support for incapacity claimants have an earning disregard of £5 a week in the first year of their claim.

  People on Income Support for incapacity qualify for a £20 disregard after one year but those who live as a couple must share the £20 disregard between them.

  Those who claim Incapacity Benefit (but not Income Support top-up) are not subject to an earning disregard and can earn up to £20 from day one of their claim. Under the Permitted Work rules those who live as a couple can earn £20 each or up to £81 each.

7.4  Why can't people accept the benefit reductions?

  It is sometimes said that people should accept the penny for penny reduction of means-tested benefits if they want to get a foothold in work. However, Jobcentre Plus administrative systems are not designed for people with fluctuating health problem.

  Earnings must be reported immediately to Jobcentre Plus and where these are in excess of the disregard the benefit is reduced penny for penny over.

  If the amount changes Jobcentre Plus must be contacted. People with fluctuating health who do not work every week do not want to risk the chance of their income being interrupted through maladministration that can occur by having their benefit amount adjusted weekly.

7.5  The low disregards are further reduced by the treatment of reimbursed travel expenses

   Travel expenses are treated as earnings by the benefit system if these are reimbursed for the costs of travel to paid work.

  Where travel expenses are reimbursed to paid workers, these are treated as earnings and are added on to the total.

  If the part-time work is not within walking distance the very low earning disregard and the travel costs together, may make even a couple of hours of paid work in a sheltered work shop unrealistic.


  The Department of Work and Pensions and Jobcentre Plus have no central information resource for staff who are advising customers on moving towards and into work.

  Leaflets published by DWP are sometimes incomplete and sometimes offer incorrect information to people who are considering work. People with mental health problems have no confidence in advice that is given by Jobcentre Plus staff.

  Unless means are found to radically simplify the benefit system, a comprehensive electronic advice system is required. The advice system would be designed to answer all questions about moving towards and into employment for all possible benefit circumstances and provide reliable up to date guidance on earning disregards, potential reviews, reimbursed expenses etc.


  Earlier this year the Government announced some welcome improvements to the 52 Week benefit Linking rule that are to be introduced October 2006.

  The 52 Week Linking rule can link benefit entitlement before work starts with benefit entitlement should the work end and the worker need to claim benefits again. It is a guarantee that benefit income will not drop as a result of trying employment. Many people are unaware of this means to protect their benefit entitlement in some circumstances. This includes Jobcentre Plus staff, many of whom are thought not to advise their customers about this benefit protection.

  Bureaucratic administrative procedures currently place obstacles to using the Linking rule. People who take a job without the protection of the Linking rule will if they fall sick again be penalised by:

    —  A period of up to nine months before their mortgage interest is reinstated which may result in loss of their home.

    —  Loss of entitlement to non-means tested Incapacity Benefit. Those with a partner in work will lose all benefit entitlement.

    —  Incapacity Benefit will be reduced permanently for people with an occupational pension over a certain amount.

    —  Incapacity Benefit age allowances increment of £8 or £16 a week will be lost permanently.

    —  Housing Benefit may be reduced to below the actual rent permanently (the national shortfall is £18 a week).

  The new Linking rule will not require bureaucratic procedures and waiting periods before people can use it. The Linking period is to be extended to two years. These are considerable improvements.

  However, unless the new Linking rule is well publicised and offers comprehensive and guaranteed benefit protection, people with recurrent conditions will continue to be deterred from taking employment because they believe that the financial risks are too great for themselves and their family. It is hoped that DWP will consult before finalising the legislation for the new Linking rule.


  Where a person with ill-health or a disability gets a job they expect to be a little better off in work.

  People with a very severe condition who receive incapacity benefits with Disability Living Allowance and Income Support Disability Premiums will have an income of up to £137 a week plus Disability Living Allowance. They will not be better off in employment if their earnings are low. This is because the Working Tax Credit is not increased by the same amount as Income Support where a person has a severe disability, and because of the Marginal Deduction rate caused by tapers on housing costs, (see below). Even people with a very severe disability who pay rent and Council Tax will face a Marginal Deduction rate of 97 pence in the £.

  The majority of people who claim incapacity based benefits are on the average rates and have an income of £80 to £92 a week. They will be better off if they can work 16 hours a week and can claim the Working Tax Credit.

  However, people who have a mortgage will not be able to get a job unless their earnings are sufficient to pay the mortgage as there is no in work financial help for a mortgage.


  A person getting a job for 16 hours a week at around £6 an hour who is also able to claim Working Tax Credit will see a take-home income after housing costs are paid of about £36 a week above average incapacity benefit levels. This is before travel to work and other in-work costs are paid.

  However the combined effect of Tax and NI deductions (22% initially), Working Tax Credit taper at 37% and Housing Benefit and Council Tax Benefit tapers of 85% at a very low threshold, give a Marginal Deduction rate of 97% on earnings of around £110 a week.

  The main reason for this astonishing rate of "tax" is that much of the increased income from the Working Tax Credit is taken away again through Housing and Council Tax Benefit reductions.

  The disabled person who starts work at 16 hours a week the first year, and is better off by £36 a week and in the second year goes full-time will find that they only see about £30 a week extra for working an additional 20 hours.

  Government publicity on the Working Tax Credit gives income before housing costs. The publicity has not provided an account of take home pay after housing costs, and many people feel that they have been misled. This has generated a culture of mistrust of government promises. The effect of the claw-back rates of overpayments has been widely publicised.

  The Pathways to Work Return to Work Credit of £40 represents a real incentive to work as it is not counted as income for the purposes of calculating Housing Benefit and Council Tax Benefit. As yet we have not seen an evaluation of Pathways to Work one year on when the RTW Credit ends. Because of the 97% Marginal Deduction rate, a single disabled person on a low wage will need to triple their starting salary to maintain their take-home income when the RTW Credit is withdrawn.


  This short summary describes just the bare bones of the barriers and disincentives to work that have led to the corrosion of the skills and motivation of long-term incapacity benefit claimants and deterred people from trying for employment.

  The Government has the opportunity to address the real problems with the benefit system at this point in time, but the initial proposals for reform appear to have been prepared without recognition of these formidable barriers.

  Most people with mental health problems want to work. If reforms can remove the fearsome penalties for trying, people will of their own volition develop the skills and qualifications that will allow them to compete in the job market.

  In my experience some people who had experienced very severe mental health problems did overcome all the odds and move into employment. The factors in common appeared to be:

    —  They did so during an upturn of the economy when jobs were plentiful.

    —  They had already acquired a good standard of education and skills before the first onset of mental illness.

    —  They had a financial cushion of some sort, such as a partner in work, that enabled them to take chances.

    —  They were highly motivated.

Judy Scott

19 September 2005

7   Available on or from Back

8   Further information on the Personal Capability Assessment can be found on and on Back

9   Decision Makers Guide Vol 3: 13512-13516 Incapacity in doubt. Back

10   Permitted Work upper limits on earnings are increased in line with the Minimum Wage in October. Back

11   44% of incapacity claimants receive Income Support. The number receiving housing benefits is not recorded but a straw poll of five work projects for people with mental health problems in 2003 indicated that only 20% have access to earning £81 a week or the equivalent. Back

12   DWP Research Report 268 Final Outcomes from the Permitted Work Rules. Back

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