Select Committee on Work and Pensions Written Evidence

Memorandum submitted by UnumProvident


  UnumProvident is the UK's leading provider of group income protection insurance, with over 30 years of experience in the UK. Our products enable individuals to protect their incomes, protecting their financial security, if they are unable to work due to illness or injury. For employers, we safeguard one of their most valuable resources, by helping employees return to work following long-term absence. Our income protection customers benefit from our expertise in the specialist areas of disability, rehabilitation and return-to-work.

  At the end of 2004, UnumProvident protected over 2.1 million lives through more than 19,800 schemes. During 2004 we paid total benefit claims of over £249 million—of which more than £177 million related to income protection claims.

  Our commitment to the wider world of disability and employment is shown by our prime mover support for "Beginnings"[38] and in 2004 our long-term interest in vocational rehabilitation was demonstrated by the appointment of Prof Mansel Aylward to be the first director of the UnumProvident Centre for Psychosocial and Disability Research at Cardiff University. The Centre's research will lead to a better understanding of what makes people incapacitated and how to prevent and support disabling incapacity to help people return to work after illness.


    —  To inform their deliberations the committee issued a series of questions and we will only respond to those questions which relate to the domains within which we believe we have the necessary skill sets to give a competent answer.

    —  We give those responses below but generally we believe that it is essential that first the scope of the reforms needs to be clearly defined and drawn—is it just Incapacity Benefit, or the wider world of welfare benefits in their entirety, that is under scrutiny? And secondly the real reason for the reform must be made very clear to all stakeholders.

    —  Ie is this reform designed to:

—  clarify and simplify the Benefits system;

—  improve Return to Work (RTW) outcomes and job retention;

—  to better target benefits and get best value for money;

—  reduce the numbers on IB by getting people off it, either into productive work or onto other more appropriate benefits;

—  reduce the cost of benefits by raising the eligibility criteria or strengthening the assessment process; and

—  target malingering and fraud.

    —  Or a combination of all of these?

    —  Each of the above will require a different implementation strategy and metrics to achieve and measure success and, similarly the consumer messaging requirements around each will be different.

    —  We believe that getting sick and disabled people back into employment produces both individual fulfilment and presents an opportunity to realise the value of the all to often latent talent pool that disabled people represent. However, in a period of economic slow-down, proving the economic case for the requisite investment may be difficult. Intuitively in such an environment reasoned appeals for more expenditure may fall on deaf ears because spending on improving Rehabilitation resources, however beneficial in the long term, will by definition increase costs in the short term.

    —  If the avoidance, or even reduction, of such expenditures is the single driver of this reform; and any alternative is fiscally unacceptable over one cycle of the spending round, then perhaps lifetime cost/benefits should be looked at. The value of applying an all-of-life time line needs to be better understood. If the costs of allowing someone to remain on benefit into the grave, versus getting them back to work and off-benefit and paying into a Pension Scheme; were highlighted, then the cost benefit analysis would dramatically change in favour of spending now to save later.

    —  It appears that is the Turner commission on the reform of Pensions is doing just that; judging the "value" of net pensions saving by totalling the accumulation/decumulation incidence over the long term—so why not use this approach for other welfare benefits and then observe the overall effect across the whole welfare benefit continuum?

Response to Committee Questions


(a)  What lessons can be learned from the Pathways to Work pilots in shaping the direction of the reform of incapacity benefits?

    —  The content of any "Return to Work" (RTW) activities associated with IB reform should be based upon the successful intervention strategies demonstrated by initiatives such as the Pathways to Work (PTW) pilots supported by vocational rehabilitation.

    —  The overriding principle must be that RTW activities be client centred and focused in addressing the specific needs of the individual. Therefore any RTW framework must be robust and flexible enough to offer tailored services such as work-readiness through to CV writing or interview preparation, for example.

    —  The providers of RTW activities should be multi-disciplinary; it's essential to have the capacity available to meet the needs of the individual; an approach already proven successful in the PTW pilots. The definition of supported RTW activities must be broad enough to encompass education, developmental skills training and other non-traditional forms. This will help to acknowledge that many of those requiring these activities will not have worked for sometime.

    —  With this in mind, activities should include motivation and confidence training and other forms of work, like voluntary, should be considered as part of RTW activities. The new vocational agenda for 14 to 19 year olds also needs to be made fully accessible to all, especially young disabled people.

    —  In providing a tailored client-focused service solution; the reform process should seek to establish how a RTW framework could be developed enabling firms, especially SME's, to access information on RTW provision. In addition, work focussed skills training must be delivered to meet the needs and requirements of employers, both in the public and private sector; a view strongly backed by the CBI. Courses need to be developed in partnership with the needs of employers, addressing skills shortages and labour demands; disabled people need to be able to access this type of provision.

    —  For example our understanding of "early" intervention, means that the proposals are leaving it too long to intervene and intervention needs to be earlier. However this does imply additional trained resource and a very different relationship with employers.

    —  From the PTW and UnumProvident's own experience it is clear that early intervention is vital (see further comments below).

(b)  What are the implications of DWP's proposals for the new structure of incapacity benefits? Do they address the complications inherent in the existing incapacity benefits system? Is a dual benefit the right approach? Could it be improved?

    —  Overall we do believe that the dual benefit approach is the right one—although we do recognise there are problems inherent in it.

    —  We welcome the name Rehabilitation and Support Allowance (RSA) for the first tier benefit; it accurately details the kinds of activity that people will be able to undertake while on this benefit and rightly insinuates that this is a short-to-medium term benefit. In reality this category describes individuals who, with light to medium support, could, after a reasonable passage of time, make a sustained return to work.

    —  However the use of the word "Rehabilitation" to describe this intervention package may be a misnomer. This is because we run the risk of implying that participation in the sum of those activities that comprise that support will return the individual to a level of performance that they were once capable of sustaining, but which now, through injury or illness, can now no longer attain. In reality there may never have been such a period of "normalcy"

    —  For example individuals experiencing learning difficulties will frequently never be "rehabilitated" because the set of symptoms and behaviours that make up their condition cannot be simply "corrected" and thus they be returned to "normal". However, their talents could be highlighted, skills could be taught and self-esteem raised.

    —  (It is also likely that such people may find the whole assessment process quite challenging and their simple lack of stamina to withstand the single one-off process may mean their irrevocable casting into the lower tier. Similarly people with intermittent conditions, who experience good days and bad days, may, if they are assessed on bad day similarly be placed in the lower tier)

    —  Nonetheless it is an improvement on "Incapacity Benefit"—which has long affected employer views of claimants, and importantly the claimants themselves—both in terms of mental health and their perception of their readiness to return to work.

    —  However, we have some reservations about the title of the second tier benefit, the Disability and Sickness Allowance (DSA). We feel that this may seem to contradict the greater shift in the Government's language from "disability" to "ability", and from "incapability" to "capability" Equally the use of the word "sickness" might be read by some to show that this is something that should be covered by other means such as statutory sick pay.

    —  We believe that those claiming DSA (ie those with long term conditions very unlikely to return to work) should not be "written off". We argue that for these people any of the support to those in RSA should be available on request but they should not be required to undertake it. Also, given rapid advances in medicine etc, it would perhaps be reasonable for such people to return for a more work focussed approach say after five years, to see whether in fact at that stage work was a more realistic option.

    —  We would be wary of associating the name "disability" with a benefit for those who cannot work—the majority of people with a disability will fortunately not require this benefit.

    —  The DWP have noted that their names for the two new benefits proposed in their Five-Year Strategy are still open for discussion. We welcome this as the naming of benefits has a very important role in shaping the mentality that surrounds them, both for the individual claiming the benefit and for the wider society.

    —  To begin the discussion we suggest the use of the term Work (or Income?) Replacement Allowance which highlights that the fact that the claimant is not entirely disabled, but rather just, currently, unable to perform specific work-related activities and the benefit is intended to go some way to replacing the income that is lost as a result. The title also lends itself to potential efforts by the Government to encourage claimants to undertake non-work based activities, such as voluntary or part-time work that contribute to improved wellbeing and a better quality of life. Finally the name has no time connotations, avoiding any tendency to think this benefit is one for life and thus by definition the individual has been consigned to the scrap-heap.

(c)  Will the reforms help to improve work incentives for sick and disabled people?

    —  We welcome the Government's work in making disability benefit payments more flexible, in order to increase the incentives to return to work. The Permitted Work Rules and the changes to the Linking Rules, announced in the recent Budget, will help to correct anomalies in the system that for too long have proved unhelpful for people wishing to return to work.

    —  Nevertheless continued work still needs to be undertaken to remove the financial risks that people face when coming off benefit and re-entering the workplace after a period of disability.

    —  UnumProvident would like to see improvements to the system, where those seeking to do some form of work can claim financial support through benefits, to reward those making the first steps towards sustainable employment. We would also recommend that the Government consider making wider assessments of the range of disincentives people face when returning to work. Support in helping people return to work should not just focus on rehabilitation, but should also consider other restrictions such as the need for childcare or care for elderly relatives and notably transportation.

    —  In minimising the financial risk of returning to work, the Disability Alliance (a Beginnings coalition partner) has proposed a "back to work" diary, which would be administered by Jobcentre Plus and which would aim to illustrate to the returning individual, and their employer, the financial implications of moving into work. The diary aims to help them cope with the transitional period and to ensure that they receive the right financial support. We would also recommend that the DWP investigate using a six-month "settling-in guarantee" whereby people are guaranteed that their Disability Living Allowance (DLA) would not be reviewed and reduced. This provides time to settle into a job, and to ensure that it's going to be sustainable; it would also recognise that returning to work is often far more stressful than remaining on benefits.

    —  UnumProvident welcomes further moves by the Government to reduce the confusion surrounding incapacity benefits and their replacements. For example, we believe there is a need for the linking rules and other positive initiatives to be better publicised by DWP. A move in this direction would be to publish and promote a DWP booklet with a clear title, say "What Work Is Available On Incapacity Benefits". This booklet could also explain about voluntary work, permitted work, earnings disregards etc; most importantly it would get across the message that work is viewed positively for people on benefit.

    —  Further, the benefit reform process should seek to find meaningful ways in which employers, through some form of Government assistance, could support newly disabled people through a period of "reasonable adjustment". This reasonable adjustment period could be in the form of rehabilitation or disability leave. This leave could be statutory, subsidised by Government, and possibly insurers, and work in the same way as maternity and paternity leave.

    —  The advantage of such a system is that employees and employers through a period of vocational rehabilitation could assess the disability/condition and how it affects the employee's role, bridging the gap between sickness and a return to work. This will require serious investment in occupational health services, the training of staff and availability beyond the "big" employers.

(d)  Is it possible to distinguish between those who are able to return to work and those who cannot?

    —  Only if the boundaries between "health" and "sickness" and "fit for work" are made less arbitrary and reflect better the reality of intermittent conditions where the individual has "good days" and "bad days". Many disabled people can and want to work but it may not be 9-5 Monday to Friday. More flexible working arrangements would allow the recruitment and retention of a much more divers workforce, one for example where individuals with Mental Health conditions could be better accommodated and supported.

    —  We are concerned about how and who will make the judgement as to whether somebody should go into either group since clearly so much will follow from it—Often that will not be a medical issue but much more to do with social issues, eg motivation, willingness of employer to adapt etc. etc. Hence the person making the judgement may not even ideally need to be a medically qualified person.

(e)  What are the implications of the reforms on levels of fraud and error?

    —  These are two very different subjects: the latter lies outside our expertise, but our view is that genuine levels of the former are very low and that we must have a care that well-intentioned fraud deterrence and apprehension methods don't act as barriers to individual application and reception of fully merited benefits.

(f)  Will the reforms address the main areas of concern with the current system?

    —  It will address many of the areas of concern to us but others may have issues which are not covered here, around access and transport for example.

    —  We also concerned that it will not address the some of the issues around joined up work between the DWP and the Department of Health. A claimant for IB is not fully assessed by a member of the DWP for three to six months meaning that until that time the responsibility lies with their GP. Under the current system the concern of the GP is whether their patient is sick—not whether they are capable of work. There are many examples where work maybe preferential despite some sickness or incapacity—an obvious one being the recent research highlighting that often back pain is best treated with some element of work.

    —  We agree with comments made by the previous Secretary of State for Work and Pensions, Alan Johnson MP and more recent by Minister of State for Employment and Welfare Reform, Margaret Hodge MP that we avoid a sick note culture—which works to the disadvantage of patients over the longer-term.

    —  We would therefore suggest that trial/pilot use is considered for a "Functional Restrictions Pad", to replace the "Sickness Note Pad". The FRP would be based on the "Personal Capacity Assessments" and used when persons first visit their doctors—long before the before the three to six month at which the DWP makes a similar assessment.

    —  This could be supported by the provision of employment advisers within GP surgeries—which have proven very successful in certain areas. It could also be combined with financial incentives for GPs which have already caused a rise in standards for the treatment of high blood pressure and asthma, and produced results well in excess of Government targets.

    —  As noted above, part of the success of PTW is the early intervention. We would like to add that the current system whereby claimants are not fully assessed until three to six months is not sufficient for ensuring a high possibility of RTW.

    —  UnumProvident's rehabilitation experience has shown that early intervention and active dialogue with employers is vital to the chances of RTW. By the time the claimant is fully assessed a quarter of a year has passed, by which stage an employer, particularly an SME, will have had to hire someone else, or have potentially folded in the case of micro-SMEs.

    —  UnumProvident's rehabilitation teams ensure that they actively engage the employer informing them of the progress being made and the likely timing of any potential RTW. This facilitates understanding from the employer and can help adaptations to be made to the place of work prior to the person actually being ready to return—which in some cases can delay a RTW by a further three months.

    —  Finally we would note that often DWP Ministers have noted that benefit reforms will only apply to new claimants, not those already claiming. Firstly this distinction is often referred at the "stock" and "flow", even by Government, and we would see this as unhelpful.

    —  Secondly we would like to see this issue debated. It is not entirely clear, should this be the Government's current position, why reforms should only apply to new claimants only—particularly if the Government wants to get 1 million of the 2.8 million people claiming incapacity benefits back to work. If the system is meant to simplify and make more flexible current arrangements, then we should perhaps encourage its application, if even gradual, to all claimants.


(a)  How successful have the Pathways to Work pilots been? Does the current design need adapting for national rollout?

(b)  What are the implications of a rollout of Pathways on a new system of incapacity benefits?

  Neither of these are within our sphere of competence, we would only say that overall Pathways is an improvement on NDDP but it does have huge resource implications. If the scheme were to be rolled-out nationally there would certainly be an issue of whether there are sufficient trained professionals to carry this out.


(a)  Including: the experience of those who have taken part in different aspects of the Pathways to Work pilots; barriers in accessing support offered through Pathways; awareness of the support available; and views on further reform

(b)  Are people with different disabilities and health conditions, in both pilot and non-pilot areas, given appropriate support by Jobcentre Plus? Is there a tendency to help those perceived as closer to the labour market?

(c)  How will the reforms help those who are not able, or not yet ready, to work?

  No Comment.


(a)  Can the reformed systems support those with variable and manageable medical conditions, or those who are able to work part-time? Are those with mental health difficulties adequately supported?

(b)  Does the Condition Management Programme provide the right level of support?

  No Comment.


(a)  Has Pathways successfully worked with healthcare professionals, including GPs, particularly in rehabilitation initiatives such as the Condition Management Programme? How can healthcare professionals be further engaged in the reform of the incapacity benefits system?

  No Comment.


(a)  Is Jobcentre Plus sufficiently resourced to deliver the Pathways pilots, both in terms of staffing and finances? Are they equipped to deal with a reform programme for Incapacity Benefit?

(b)  What has been the effect of the DWP efficiencies agenda?

  No Comment.


(a)  What has been the effect of the Pathways pilots on existing programmes and support, such as the New Deal for Disabled People and Work-Based Learning for Adults?

(b)  How do personal advisers work in collaboration with other Jobcentre Plus staff such as Disability Employment Advisers and with Job Brokers?

  No Comment.


(a)  Have the private and voluntary sectors been successfully involved in the Pathways pilots? How can they be further involved in the reform of incapacity benefits?

  Our view is that outcomes have been mixed; voluntary sector providers have been involved in most Pathway Pilots but to a varying extent and to varying degrees of success. We do not believe the private sector in the form of employers have officially been involved in the pilots themselves but have been involved through the providers seeking to place people with them. Greater attention should be given to how employers should be bought in and much more work remains to be done on the messaging to both large and particularly small employers.


(a)  What type of jobs are participants of Pathways moving into? Are they receiving appropriate in-work support to enhance job retention?

(b)  Are local labour markets able to provide the jobs needed?

(c)  What is the experience of employers?

  No Comment.

Joanne Hindle

3 October 2005

38   Beginnings is a long-term campaign to improve return-to-work outcomes for disabled people supported by UnumProvident. It brings together expertise and resource from the public, private and voluntary sectors to develop integrated thinking and approaches to disability issues. Its Advisory Group, which steers policy and strategy for the campaign, includes representatives from the Shaw Trust, Disability Alliance, Working Links, Engineering Employers Federation, the Royal Mail, BT, Papworth Trust and RADAR. Back

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