Select Committee on Work and Pensions Written Evidence


Memorandum submitted by Citizens Advice

SUMMARY

  We have welcomed the Government's objective of helping people into work and properly supporting those who are unable to work. We are, however, concerned that the proposed system can work as envisaged, without removing benefits that are already too low from vulnerable people.

  We would welcome the following within the proposed reform to incapacity benefits and pathways to work:

    —  A clear commitment to support those people who illness or disability means that they will not be able to work.

    —  A clear timetable for the roll out and funding of Pathways to Work across the whole country, in advance of any changes to incapacity benefits.

    —  More evaluation of the success of Pathways to Work is needed. Sustainability in employment is a key indicator of success. Details of how many people placed in work through the scheme are still in work 6 months later would contribute to this understanding.

    —  A definition of "work-related activities" that recognises the full range of activities that people might undertake to increase their readiness for work.

    —  A commitment to improve the speed and quality of decision-making.

    —  Further details about how DWP will work with employers to overcome any concerns about employing people with disabilities who may have been out of the labour market for some time, and to encourage them to support employees so that they can remain in employment despite the onset of illness or disability.

    —  Targeted support for specific groups, particularly people with mental health difficulties, who face some of the most complex barriers in taking up, or returning to, work.

LESSONS LEARNT FROM PATHWAYS TO WORK

  Citizens Advice has welcomed the Pathways to Work initiative that is currently operating in seven Jobcentre Plus districts and is being extended to a further 14 by October 2006. Nevertheless we have some concerns:

    —  Clients who fail to attend, or participate in, work-focused interviews face losing part of their benefit through sanctions. The experience of Pathways to Work thus far leads us to question the necessity of imposing sanctions on vulnerable clients at all.

    —  Unpaid work and volunteering can be a useful bridge between benefits and work. It is important that ill or disabled people have confidence that undertaking voluntary work will not affect their entitlement to benefit.

    —  We are concerned that tensions exist, for Jobcentre Plus personal advisers, between the perceived need to support clients, irrespective of the final outcome, and targets for getting IB recipients back into work. We believe that it is equally, if not more, important that advisers measure, and receive recognition for the "distance travelled" by each client.

    —  Telephone advice and access to benefits is not suitable for everyone. New arrangements must ensure that offices are accessible, face to face appointments and home visits easy to arrange, and help and information is readily accessible in a range of formats.

REFORMS TO INCAPACITY BENEFITS

  Citizens Advice welcomes the Government's objective of helping disabled people remain in, or move back into, work and properly supporting those who are unable to work.

    —  We are concerned that it will, in practice, be difficult to decide which two parts of the proposed benefit, and packages of support, people should receive. We believe that it will be difficult to draw what amounts to an arbitrary line between those eligible for each part. The arbiters of who is severely ill, and who has a potentially manageable condition, will be the PCA assessors, 50% of whose challenged decisions are changed on appeal.

    —  We believe that reforms to incapacity benefits should not be implemented until there has been a substantial improvement in the quality of decision-making.

IMPROVING WORK INCENTIVES FOR SICK AND DISABLED PEOPLE

  Citizens Advice welcomes the commitment to open up work opportunities to people on IB through new investment and proposals designed to reduce barriers to work.

    —  We recommend that, as part of the review of incapacity benefits, the DWP undertakes a comprehensive review of rules and procedures for the transition from work to benefits. This should be done in consultation with disabled people, employers and other interested parties, to increase flexibility and simplicity, and permit a more gradual transition between benefits and work.

    —  The proposed changes to the linking rules, announced in the last budget, will go some way to reduce these risks, but they must be given sufficient publicity to ensure that disabled people are aware of them.

    —  People fear that their Disability Living Allowance will stop if they begin work, even though this is not the case. Even undertaking a training course can trigger a review of DLA. We believe that the DWP needs to consult and be explicit about how it plans to deal with this issue, if disabled people are to be confident in returning to work.

    —  The earnings disregard on means-tested benefits has remained at £20 a week, which limits people to less than four hours work a week at the minimum wage, and fewer hours still if they command a higher wage. We would like to see it increased to at least £35, the level it would be at had it maintained its value over the years.

    —  Many ill and disabled people experience great difficulty with the 16-hour rule in the Working Tax Credit. This affects those who could gradually build up their hours over time, but are unlikely to do so quickly and those who are in work, who may have been for many years, but whose condition means that they can no longer do the 16 hours required to qualify for financial support. This should be addressed as part of the reforms.

1.  INTRODUCTION

  1.1  Citizens Advice welcomes this opportunity to contribute to the Work and Pensions Committee Inquiry into reform of incapacity benefits and Pathways to Work. It is likely that Citizens Advice will want to submit supplementary information to the Inquiry following the Green Paper.

  1.2  We have welcomed the Government's objective of helping people into work and properly supporting those who are unable to work. We are, however, dubious that the proposed system can work as envisaged, without removing benefits that are already too low from vulnerable people in need of continued support.

  1.3  We would welcome the following within the proposed reform to incapacity benefits and pathways to work:

    —  A clear commitment to support those people who illness or disability means that they will not be able to work.

    —  A clear timetable for the roll out and funding of Pathways to Work across the whole country, in advance of any changes to incapacity benefits.

    —  More evaluation of the success of Pathways to Work is needed. Sustainability of employment is a key indicator of success. Details of how many people placed in work through the scheme are still in work after six months would contribute to this understanding.

    —  A definition of "work-related activities" that recognises the full range of activities that people might undertake to increase their readiness for work.

    —  A commitment to improve the speed and quality of decision-making.

    —  Further details about how DWP will work with employers to overcome concerns about employing people with disabilities, who may have been out of the labour market for some time, and to encourage them to support employees so that they can remain in employment despite the onset of illness or disability.

    —  Targeted support for specific groups, particularly people with mental health difficulties, who face some of the most complex barriers in taking up, or returning to, work.

  1.4  Citizens Advice Bureaux in England and Wales dealt with 1,440,266 cases involving benefits and tax credits in 2004-05, around 30% of the total advice caseload. 131,944 involved Incapacity Benefit for people who have health problems that prevent them from working.

  1.5  2.64 million people currently receive incapacity benefits, including Incapacity Benefit, Severe Disablement Allowance and Income Support (IS) on grounds of incapacity for work.[116] The number of working age people claiming incapacity benefits (as defined above) rose slowly for many years to peak at 2.64 million in November 2003, and has since fallen back to 2.64 million, representing 7.4% of the working age population. The number of people receiving contribution-based IB/SDA has been falling since 1997 and currently stands at 1.71 million (4.8% of the working age population).

  1.6  There has been a steady increase in the number of women receiving IB, as increasing numbers of women work and pay the national insurance contributions necessary to be eligible for IB. It is not known, however, whether in previous years the same proportion of women were disabled or suffered ill-health but were not visible because they did not get IB, either because they were not in paid work or because they paid the married woman's stamp.

  1.7  It may well be that, in relation to women IB recipients, the issue is less "hidden unemployment" than "hidden carers". When someone is caring but also disabled or in poor health themselves and eligible for IB, they are likely to claim IB in preference to Carers Allowance, because it is paid at a higher rate. This may also be true of male IB recipients. Supporting carers to combine their caring role with employment, should they consider this a possibility, would enable the Government to better target their efforts to help IB recipients back to work.

2.  PATHWAYS TO WORK

  2.1  Citizens Advice has welcomed the Pathways to Work initiative that is currently operating in seven Jobcentre Plus districts and is being extended to a further 14 by October 2006. The limited evidence available to date suggests that the interviews with specially trained personal advisers, NHS rehabilitation support and the £40 a week return-to-work credit have provided a much more positive and individual approach. Citizens Advice Bureaux have reported few problems with the scheme thus far.

  2.2  Sufficient resources and good quality, accessible, advice and support are key to sustainable employment for disabled people. It is too soon to be able to ascertain the long-term sustainability of the work that disabled people have been helped to find through Pathways to Work. Continued support following placements increase the sustainability of employment, ironing out problems and tackling emerging difficulties, as demonstrated by the success of Tomorrow's People.

  2.3  Sustainable employment is a key indicator of success. We would like to see evaluation detailing how many people placed in work through the scheme are still in work six months, and a year, later.

3.  LESSONS LEARNT FROM PATHWAYS TO WORK

3.1  Resources and roll-out of Pathways to Work

  The new proposals will be even more resource intensive than Pathways to Work, and we believe that it will not be possible to deliver the sustained client support needed to make the system work properly, particularly in light of the planned DWP efficiencies. The delivery of the whole package of support is vital if disabled people, and those with health conditions, are to be supported to consider returning to work.

  3.2  DWP's own research[117] suggests that, despite investment in training, Personal Advisers feel least equipped to work with people who have mental health problems, a group who make up at least 40% of the IB caseload. It is crucial that Personal Advisers' knowledge and experience of mental ill-health, and other conditions and disabilities, is sufficient to enable them to have the confidence to work appropriately and supportively with individual clients.

3.3  Work focused interviews, compulsion and sanctions

  New IB recipients in Pathways to Work areas are required to attend work-focused interviews with Jobcentre Plus Personal Advisers. People with a "severe mental illness" are exempt from work-focused interviews.[118] However, as shown in our evidence report, Out of the Picture (enclosed), these interviews are also likely to cause difficulties for people with less severe mental health problems.

  3.4  Bureaux advisers say that, when they are unwell, clients with mental health problems have trouble travelling distances, tend to be withdrawn, are afraid of meeting strangers, wary of contacts and don't expose themselves to situations, such as an interview, that could highlight their problems with communication and concentration. They sometimes do not open post, find it difficult to keep to deadlines and may be unable to attend interviews on appointed days. People with other conditions and disabilities could similarly have their ability to engage affected by changing medication or other therapeutic regimes, or fluctuating/deteriorating physical or mental well-being. It may be difficult for them to cope with compulsory attendance at an interview and to grasp the difference between having to draw up an action plan and the (currently) voluntary option of fulfilling the listed activities in that action plan.

3.5  Sanctions

  People who fail to attend work-focused interviews face a significant reduction in their benefits. Although safeguards exist to ensure that clients with a "stated mental health problem" are not sanctioned when they are unable to comply, these do not appear to be enshrined in regulations.[119] It seems that Personal Advisers in Pathways to Work areas have taken a light touch approach to sanctions of this kind, and we have welcomed this. There is also evidence that existing IB claimants have been eager to become involved in Pathways to Work in areas where voluntary participation has been possible. This leads us to question the necessity of imposing sanctions on vulnerable clients at all.

  3.6  We are very concerned that, in the proposed system, Jobcentre Plus personal advisers applying sanctions and safeguards will have a lot of discretion over the expectations placed on individual clients, and the amount of income they receive. This is of considerable concern in a climate of much misunderstanding associated with disability and, in particular, mental illness and highlights the importance of appropriate training. Should safeguards not be operated properly, there is no comeback for clients.

3.7  Work-related activities

  Experience from Pathways to Work demonstrates that a wide range of activities can contribute to developing an individual's capacity for work. Participation in condition management programmes, for example, and other less "traditional" activities such as confidence building, and practice using public transport, should also be recognised as beneficial in helping people get back to work.

  3.8  The new system must recognise the importance of a range of return to work, starting work and work retention activities and support; and to value citizenship activities other than paid work. It must cater for those for whom full-time work would never be a realistic option, and those with diminishing or fluctuating work capacity, and recognise the very wide spectrum between not working and working full-time.

3.9  Caring

  Carers' own ill-health may mean that they qualify for IB. Similarly many disabled people have caring responsibilities for family or friends. It is important that they are considered within these reforms. For some carers, it will not be possible to combine work-related activities with their caring role, even more so if they are ill or disabled themselves. Others, however, would welcome the opportunity to re-enter the labour market, or support to retain their links with it. It is important that the new system has enough flexibility to deal sympathetically with carers in these situations.

3.11  Unpaid work and volunteering

  Work has it's won value and "if you are recovering from illness, it is not only paid work that is important, it is a meaningful occupation, something worthwhile to do that is valued." When people undertake voluntary work, it is sometimes interpreted as indicating that they are capable of work and therefore not entitled to benefit. One CAB adviser reported that even when doing the right thing, taking advice from a GP and notifying the DWP of the voluntary work, a client had been called into an interview "under caution", with threats of criminal prosecution.

  3.12  Citizens Advice experience is that volunteering can be a useful means of bridging the gap between benefits and work. For example, Sheffield Mental Health CAB and Advocacy Service actively recruits mental health service users to work both as volunteers and paid staff. Similarly, Debt Advice Within Northumberland works closely with a local user group, Northumberland Voice, to train and use mental health service users as volunteers.

  3.13  It is important that ill or disabled people have confidence that undertaking voluntary work will not affect their entitlement to benefit.

3.14  The role and training of Jobcentre Plus Personal Advisers

  The importance of appropriate training and support for Personal Advisers working with clients with mental health problems, in particular, some of whom have quite severe conditions, is highlighted in Out of the Picture. We believe that NVQ level 3 does not provide this.

  3.15  In recent research contributing to the incapacity benefit reforms,[120] even advisers with long experience expressed strong views about the challenges of dealing with clients with entrenched, complex and severe problems. Customers with mental health problems were seen as particularly challenging and ever more experienced advisers did not feel confident working with them. Advisers identified customers with moderate to severe mental illness as amongst those most difficult to progress, because they were insufficiently stable to benefit from attendance at an interview or training. These difficulties translated into disparities in treatment from waivers and deferrals to intensive and tailored support.

  3.16  Some advisers also reported worrying tensions between the perceived need to support clients, irrespective of the final outcome, and targets for getting IB recipients into work.[121] The Personal Adviser research suggests that there is a danger that increasing the weight placed on early job entry targets in the future might lead them to focus on the "quick wins" versus those who really benefit from the pilots. Reported rates of progression, particularly for those considered to be "furthest from work", appear to differ between personal advisers. In particular, there are variations in the extent to which personal advisers are willing to persist with more "difficult" customers, and feel they have the skills, ability and "permission" from managers to do so.

  3.17  We are concerned that Jobcentre Plus targets focus solely on getting people into jobs. For some people, this is unlikely to be a realistic possibility, especially where there are limited jobs in a locality. We believe that it is equally, if not more, important that advisers are able to measure and given recognition for the "distance travelled' by each client.

3.18  An inclusive system?

  Citizens Advice has particular concerns about the ability of all Jobcentre Plus personal advisers to appropriately and accurately identify the support needs of people with fluctuating conditions, or those whose conditions are likely to get better or worse over time. Disabled people in receipt of the proposed Disability and Sickness Allowance (DSA) need to be made aware of their rights to access the same level of help that is available to people on the originally named Rehabilitation and Support Allowance. People who need more "support" rather than "work focused" attention may find themselves on the wrong side of this arbitrary line.

  3.19  Disabled people need comprehensive advice about their benefit entitlements and social and health care, as well as access to training and education opportunities, in order to play their full part in society. The group of people on DSA, for example, is likely to include many who might be eligible for DLA but not receiving it, and information about other local authority services, such as Blue Badges and community care assessments should also be provided.

  3.20  Telephone advice is not suitable for everyone. The new arrangements must ensure that offices are accessible, face to face appointments and home visits easy to arrange, help and information accessible electronically and via the Internet, and resources and materials readily available in a range of formats.

  3.21  Extensive training and clear guidance will be required to enable personal advisers to decide which of the two benefits, or parts of the benefit, and packages of support individuals should receive, particularly those with progressive or fluctuating conditions.

4.  REFORM OF INCAPACITY BENEFITS

  4.1  We believe that much of the learning from Pathways to Work will be helpful to the reform of incapacity benefits. As highlighted above, we believe that it is unnecessary for the new system to be reliant on compulsion and the threat of sanctions.

  4.2  The DWP's Five Year Plan, published in February 2005, set out proposals for changes to the structure of incapacity benefits. It suggested that applicants for benefits on grounds of incapacity for work would initially be awarded a "holding benefit", at the same rate as Income Support or Jobseekers Allowance (currently £44.50 a week for people aged 18-24, and £56.20 for people aged 25 and over). A personal capability assessment (PCA), and an additional employment and support assessment, would then be carried out with 12 weeks. The application would then be considered by a Decision Maker, with three possible outcomes:

    —  Benefit refused;

    —  "Rehabilitation and Support Allowance" awarded with a strong focus on supporting people back to work. About 80% of people are expected to get this benefit. They will be paid more than the current long-term IB rate, providing that they engage in work-focused interviews and activities to help them back into work; or

    —  Award of "Disability and Sickness Allowance" to about 20% of people. They will receive more than the current long-term IB rate and be required to participate in some work-focused interviews. They will be encouraged, but not required, to engage in return-to-work activities.

  4.3  An alternative model?

  It appears that the Government is considering modifying this model. It now seems at least possible that there will be one benefit, with different levels of conditionality within it, to reflect claimants' capacity for work. It has also been suggested that levels of conditionality within the two parts of the benefit will be altered. It is possible that there will be almost no conditionality attached to a very small group of people whose disability or illness is so severe that they will not be capable of any work or work-focused activity. A much larger group, whose conditions are considered to be more manageable, are likely to faced increased conditionality.

  4.4  Citizens Advice, alongside other disability organisations, has been concerned about an artificial divide between the two benefits, or the levels of benefit within the current model. We believe that it is important that all claimants receive the same benefit, with variations of conditionality according to their individual circumstances. We believe that this would help guard against the possibility of one group being seen as somehow "more deserving" of state support than another. We are pleased that these concerns have been recognised. However, we have fresh concerns that the latest proposals to increase the size of the group to which greater conditionality applies, will leave many, particularly those with fluctuating conditions or mental health difficulties, unable to meet the conditions attached, and therefore risk seeing their benefits reduced.

  4.5  From SSP to "holding benefit"

  Currently, in most parts of the country, people who are incapacitated for work qualify for Statutory Sick Pay (SSP), IB or IS for their first weeks of incapacity, if their GP certifies that they are unfit for their usual work. After this time, people only remain entitled if they "pass" the personal capability assessment (PCA), designed to determine if they are incapable of any type if work.

  4.6  Citizens Advice is concerned that the rate at which the holding benefit is paid is likely to be approximately £10 per week less than SSP (SSP is currently £68.20 a week). Some people are likely to find themselves on the holding benefit for six weeks or more (the maximum time on the holding benefit is 12 weeks). We are concerned that any delays in processing might then result in this becoming an extended period for many, with a significant impact on household income.

  4.7  This could be eased by "flagging up" those people moving from SSP to the reformed Incapacity Benefit, so that they have their PCA and other assessments quickly, and could be moved off the holding benefit more quickly as a result.

  4.8  Decision making

  The DWP recognised, in the Five Year Plan, that "society has a responsibility to support those at a time when they cannot be expected to work" with the objective "to provide financial security whilst offering the right rewards for taking steps to return to or enter work".[122]

  4.9  We fear that it will, in practice, be difficult to decide which of the two parts of the proposed benefit, and packages of support, people should receive. We believe that it will be difficult to draw what amounts to an arbitrary line between those eligible for each part. The arbiters of who is severely ill, and who has a potentially more manageable condition, will be the Personal Capability Assessment (PCA) assessors. Figures for the quarter ending March 2004 show that in 6,390 IB appeals, 66.7% were decided in favour of the appellant. Where the appellant was accompanied to a hearing by a representative, for example a CAB adviser, 73.2% of appeals succeeded. This suggests that there is vast room for improvement in the quality of decision-making.

  4.10  Personal Capability Assessments

  It appears that the PCA will remain a crucial feature in deciding who will get incapacity benefit as Pathways to Work is rolled out across the country, and then superseded by the new arrangements. The Green Paper that introduced Pathways to Work in 2003 described the PCA as setting "a level of incapacity at which it is felt unreasonable to require a person to seek work in return for benefit. It is not a level at which work is impossible".[123] This is a very helpful approach to understanding eligibility.

  4.11  Evidence from bureaux shows that the PCA process leads to an unacceptable number of incorrect decisions in which people are found not to be entitled to incapacity benefits when, in fact, they are. The quality of medical assessments is often poor, and we see much evidence of poor administration by both Jobcentre Plus and Atos Origin. This can result in extreme hardship for the individuals concerned and their families.

  4.12  Citizens Advice is concerned that the new arrangements will need even more demanding an assessment as they will have to determine which part of the new benefit(s) or conditionality requirements each client will be assigned to.

  4.13  The more varied the gradation between requirements placed on individual clients, the more sophisticated DWP's decision making will need to be, but we know there are currently many problems with the much simpler PCA pass/fail decisions.

  4.14  Inadequacies in PCA descriptors

  For physical disabilities, the PCA awards points on the basis of a person's capability in 14 areas. For mental health problems and disabilities, points are awarded on the basis of descriptors covering only five areas. The scoring system to "pass" the PCA is complicated—it requires 15 points from the physical activities list, or 10 points from the mental activities list, or 15 points combining scores from both lists. In this last case, the mental activities points are treated differently again—a score of less than six mental activity points is completely disregarded, and a score of between six and nine points is counted as nine points.

        A client of a bureau in Essex was summoned to a medical examination as part of the Pathways to Work initiative. This medical assessment showed a score of zero—yet the client had been awarded DLA at high rate mobility and middle rate care only one month previously.

  4.15  Bureaux continue to report that clients, particularly those with mental health problems, are having difficulty with the revised claim form for Incapacity Benefit (IB50). The section for mental health has been shortened considerably, from almost a full page to a very small box. This regularly leads to uncertainty about how much detail and information is required. The lack of tick boxes for mental health descriptors, as there are for physical descriptors, results in similar confusion, particularly as it can be very difficult to describe mental health problems in general terms.

  4.16  We believe that reforms to incapacity benefits should not be implemented until there has been a substantial improvement in the quality of decision-making.

  4.17  Implications of the reforms on levels of fraud and error

  Official DWP statistics suggest that levels of fraud in incapacity benefit are very low, at 0.5%. The Government has recognised that many people on IB would like to be able to work, given the right support and opportunities. They face many difficulties getting back to, or staying in, work, without being accused of not wanting to. We can see no reason why the Government should not take this opportunity to be a little more trusting of people with disabilities and mental health problems who say they cannot work or who fall foul of meeting the interview and activity requirements of the system because of their illness.

5.  IMPROVING WORK INCENTIVES FOR SICK AND DISABLED PEOPLE

  5.1   Citizens Advice welcomes the commitment to open up work opportunities to people on IB through new investment and proposals designed to reduce the barriers to work faced by disabled people. Many people on IB would like to work, and could do so with the right job and appropriate support.

  5.2  Disabled people face many risks and barriers in returning to work, including financial security and making the daunting transition to work; complexity of the benefit system; lack of available work; employer attitudes and the availability of adaptations and a lack of skills, experience and confidence.

  5.3  Financial insecurity and a daunting transition to work

  Current financial incentives for people on incapacity benefits to return to work can be poor and that significant numbers of people would gain only a small amount of money more than their previous benefit entitlement. For example, only 25% of people on IB would be at least £40 a week better off if they moved into work of 30 hours a week or more. These small gains must be balanced against concerns about security and returning to benefit should work fail.

        A CAB helped a client with mental health problems who was working for three hours a week and receiving long term incapacity benefit. She has the chance to take up employment for 13 hours a week, but will lose her IB and have reductions made to her housing and council tax benefits. She will have a very small increase in income for considerably more hours of work.

  5.4  We have welcomed the Government's recognition that the risks associated with moving into work, or even trying out work, can be a major disincentive for many people. If they are to be confident in attempting work, disabled people need to be confident that they will not be stranded financially if it does not work out at the first, or subsequent, attempts.

  5.5  Permitted work

  For people who cannot return directly to full-time work, undertaking "permitted work" whilst continuing to claim benefits may be a route back to employment. The rules and "in work" benefit entitlements are complicated and clients depend on help and advice to understand them. We believe that the principle of allowing people on benefits to work is positive and helpful, that it could be improved.

  5.6  The current system allows people on incapacity benefits to take on a small amount of permitted work, but CAB advisers report that the rules are not sufficiently flexible to be of any real help to many people. The allowance and tax credit systems mean that many people who would return to low paid work are unable to escape the work effects of the poverty trap - they are little better off in work than when on benefits.

  5.7  We recommend that, as part of the reform of incapacity benefits, the DWP undertakes a comprehensive review of rules and procedures for the transition from benefits to work. This should be done in consultation with disabled people, employers and other interested parties, to increase flexibility and simplicity, and permit a more gradual transition from benefits to work, to meet a variety of needs.

6.  COMPLEXITIES OF THE BENEFITS SYSTEM

  6.1  Current arrangements are complex and do not offer sufficient incentives to overcome people's concerns about the effect on their income of returning to work:

    —  People moving into work from income support lose a number of passported benefits, such as free prescriptions and free school meals, all of which they need to take account of when making a decision to return to work.

    —  Earnings disregards are too low to offer real incentives to people on benefits to take part-time work of less than 16 hours a week.

    —  The 40% taper that applies to Housing Benefit and Council Tax Benefit needs to be reduced.

    —  Working tax credits are only available to people working 16 hours a week or more. CAB advisers describe them as being too complicated and many people do not meet the eligibility criteria.

  6.2  Linking rules

  When work fails, evidence indicates that people may not be treated sympathetically by the benefits system, despite the linking rules allowing people to move back onto Incapacity Benefit. In practice, many people have difficulty getting benefits reinstated:

        A CAB helped a young British Bengali woman who has severe mental health problems and is managing with the help of a Community Psychiatric Nurse. The client was in work for a month but left because she couldn't manage it. The client had been in receipt of income support before taking up the work, but now the Jobcentre has sanctioned her got giving up work voluntarily, even though they are fully aware of her mental health problems.

  6.3  The proposed changes to the linking rules, announced in the last budget, will go some way to reduce these risks, but they must be given sufficient publicity to ensure that disabled people are aware of them.

  6.4  Fear of losing other disability benefits

  People also fear that Disability Living Allowance (DLA) will stop if they begin work. DLA is payable to people in paid employment but, for some people, a move into work, or even beginning a training course, can be taken by the DWP as a signal that their condition has improved and trigger a review. This will be true for some people, but for many others, the first few weeks in a new job can be more stressful than remaining on benefit. The potential loss of DLA, during a period fraught with financial uncertainty, can be a huge disincentive to return to work, particularly if those people are worried about their ability to cope with paid employment.

  6.5  We believe that the DWP needs to consult and be explicit about how it plans to deal with this issue, as part of their reform of incapacity benefits, if disabled people are to be confident in returning to work.

  6.6  Interaction of tax credits, earnings and benefits

  Tax credits and earnings should interact with benefits in such a way as to make it financially worthwhile for people to do as much work as they can comfortably cope with, without putting undue pressure on people who are not able to cope with full-time paid employment.

  6.7  Disabled people and those with health problems who have been out of work for some time need the opportunity to build up confidence and stamina as well as updating, and learning, new skills. For many people the most realistic way of doing this is to start with a few hours a week. Unfortunately, because the incapacity benefit system is based on a very inflexible fit/unfit division, it has been poor at supporting people who want to try out work while on benefit. A recent, very positive, development has been the extension of eligibility for "permitted work" but it is still generally the case that the system does little to support people who cannot work as much as 16 hours a week (the threshold for eligibility for tax credits as a disabled person).

  6.8  Earnings disregards

  For people on means-tested benefits, like income support, there is a maximum weekly earnings disregard of £20. This equates to only a few hours a week, if that. Yet there is much evidence to show that maintaining a link with the world of work is an important factor in both facilitating an eventual return to the labour market and in prompting social inclusion. When earnings disregards are were first introduced they were worth a great deal more and did play a role in allowing people to keep in touch with work. Had it maintained its value over the years, the disregard would now be worth about £35 a week. We would like to see it increased to at least this amount.

  6.9  Tax credits and the 16-hour rule

  The Working Tax Credit is both more generous than the credit it replaced and more inclusive. Disappointingly, however, the 16-hour rule has remained. The Working Tax Credit can only be claimed by people working 16 or more hours a week. There has been no movement on relaxing the rule to accommodate those disabled people who cannot work as much as 16 hours but who want to work more than the few hours envisaged by the earnings disregard provisions. This rule adversely affects several groups of disabled people and those with health conditions:

    —  those who could gradually build up their hours capacity but are likely to take some time to do so (people who can do so quickly, within 26 weeks, can do so within the permitted work rules);

    —  those who are unlikely ever to be able to do as much as 16 hours but who either command earnings some way above the minimum wage or who could do 12 or more hours regularly; and

    —  those who are in work, and may have been so for many years, but whose condition means they can no longer do the 16 hours needed to qualify for financial support.

  6.10  The first two groups could be helped by an increase in the earnings disregard, by a reduction in 16 hours rule for WTC and by an extension of the period allowed for permitted work. Job retention for the latter group could be easily obtained, by allowing them to remain on WTC with a disability element (perhaps with a qualifying condition of having been in work continuously for a specific period beforehand) even if their hours drop below 16. This would help people to remain in work as long as they are able and wish to do so and, additionally, enable employers to retain experienced staff.

7.  THE WORK ENVIRONMENT—STAYING IN, AND RETURNING TO, WORK

  7.1  Employers

  Employers have a central role to play in these reforms, and in supporting people to secure and retain work. We look forward to learning more about how the DWP intends to work with employers and employers' organisations in the Green Paper. Disabled people continue to experience high levels of discrimination in the workplace. Recent research from the Institute of Personnel Directors revealed that many employers still discriminate against disabled people in recruitment, putting them bottom of a list of minority groups who they would consider recruiting. Given this, and the pivotal role experience at work plays in people's well being and social exclusion, it is vital that the DWP's collaborative work with the Department of Health, employers and the Health and Safety Commission does materially improve the workplace experience for disabled people.

  7.2  Access to Work

  Access to Work has been a very popular scheme amongst disabled people, but concerns have been raised about delays in getting assessments, adaptations and equipment. Disabled people fear being left unable to start their job, or not being able to do their job properly, because the Access to Work help is not ready.

  7.3  Workplace discrimination from both employers and employees, coupled with a failure to acknowledge and address people's need for work adjustments, causes many people to leave their jobs and return to incapacity benefits.

  7.4  Access to Work needs to be publicised more widely to employers and employer's organisations, so that they are aware of the help that that is available to make necessary adaptations.

  7.4  The Disability Discrimination Act

  Citizens Advice welcomes the changes being introduced under the Disability Discrimination Act, which make it illegal to discriminate against someone on the grounds of disability in recruitment, or decisions about promotion, dismissal or redundancy. However, we are concerned that, because only those with "long term" conditions can bring challenges under the Act, it will not help large numbers of people, particularly those with mental health problems, who may suffer short lived severe reactive illness or others with longer-term, but less severe, conditions. Such conditions are debilitating, preventing people from working and subjecting them to discrimination.

  7.5  It will be crucial to monitor the experiences of people with disabilities and health conditions in seeking work. Many are likely to be discriminated against by employers, even if this is done in apparently legitimate ways, such as deciding that there is a better-qualified, non-disabled applicant. Such monitoring needs to be designed to identify these cases as well as blatant, unlawful, discrimination. It would be wrong to penalise disabled people for not getting work when employer prejudice and discrimination is to blame.

Vicky Pearlman

10 October 2005




116   DWP Incapacity Benefit and Severe Disablement Allowance Quarterly Summary Statistics: February 2005 (Table IB1.1). Back

117   DWP (2005) Incapacity Benefit Reforms, the personal adviser role and practices, Stage 2Back

118   As defined in A Guide to Incapacity Benefit-the Personal Capability Assessment IB214, DWP. Back

119   DWP (2003) Social Security (incapacity benefit work focused interviews) Regulations, Explanatory memorandum to the Social Security Advisory Committee. Back

120   DWP (2004) Incapacity Benefit Reforms, the personal adviser role and practicesBack

121   DWP (2005) Incapacity Benefit Reforms, the personal adviser role and practices, Stage 2Back

122   DWP (2005) Five Year Plan: Opportunity and security throughout life TSO Back

123   DWP (2003) Pathways to Work: helping people into employment Back


 
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