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
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 millionof
which more than £177 million related to income protection
Our commitment to the wider world of disability
and employment is shown by our prime mover support for "Beginnings"
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 drawnis
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
reduce the cost of benefits by raising
the eligibility criteria or strengthening the assessment process;
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 termso 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
1. REFORMS TO
(a) What lessons can be learned from the Pathways
to Work pilots in shaping the direction of the reform of incapacity
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,
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 onealthough 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 themselvesboth
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
workthe 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
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
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"
(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 itOften
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 sicknot whether they are capable of work. There are
many examples where work maybe preferential despite some sickness
or incapacityan 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 culturewhich
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 doctorslong 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 surgerieswhich 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
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 returnwhich 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
onlyparticularly 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.
2. THE FUTURE
(a) How successful have the Pathways to Work
pilots been? Does the current design need adapting for national
(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
3. THE EXPERIENCE
(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
(c) How will the reforms help those who are
not able, or not yet ready, to work?
4. SUPPORT FOR
(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
(b) Does the Condition
Management Programme provide the right level of support?
(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?
(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
(b) What has been
the effect of the DWP efficiencies agenda?
7. EXISTING EMPLOYMENT
(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?
8. THE ROLE
(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.
9. LOCAL LABOUR
(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?
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