Welfare Reform Bill

Memorandum submitted by Rhydian Fôn James (WR 22)


1. This evidence is presented as analysis of the sections of the Bill that will impact most severely on disabled people.

2. These include changes to out-of-work benefits; sickness benefits; housing benefit; the social fund; disability living allowance.

3. The final section suggest remedies to problematic sections of the Bill

Analysis of the Bill

1. Income-related ESA will be replaced by the Universal Credit but assessment by the flawed WCA [1] , criticised as not working properly by its own creator [2] , will continue for both UC and ESA at huge financial and personal cost under Clause 38.

2. Clause 51 provides for time-limiting [3] to 12 months of contribution-related ESA, paid only to those with sufficient NI contributions. After 12 months, only income-related ESA will be available, so that claimants will be means-tested. Those with a working partner or with other income or capital – possibly up to 400,000 people - will lose entitlement to the benefit completely.

3. This will cause significant hardship [4] to families reliant upon ESA and may well lead to further unemployment and higher overall benefit claims as families find the only way they can provide care to the disabled member is for the carer to drop out of employment altogether.

4. Clause 52 abolishes [5] the ‘youth rules’ for ESA meaning that young people who live in households who earn slightly too much to qualify for an income related benefit will lose out [6] .

5. Clause 68 will allow the Secretary of State to re-set LHA rates without reference to rent officer determinations. This will enable the linking of LHA to the Consumer Price Index which does not take into account housing costs will further limit disabled people’s access to suitable housing. The Impact Assessment notes [7] an "illustrative average notional loss" to claimants of identified of £5.50 per week. Accessible housing is expensive and difficult to find in the social housing sector, so that this change will simply compound the difficulty for disabled people of finding suitable housing.

6. Clause 69 provides for the abolition of the social fund. Access to financial assistance will become a postcode lottery if each local authority has its own version of CCGs and CLs and criteria for awards. Problems resulting from devolving responsibility for discretionary payments to local authorities could include uneven distribution of funding, variations in success rates for applicants with similar needs across the country, poor standards of decision making, and inefficiency. These problems already exist within the CCG scheme, as highlighted [8] recently by the Public Accounts Committee, but could be exacerbated by the proposed localisation.

7. Sweeping changes were announced to DLA in the Emergency Budget [9] and Comprehensive Spending Review which intend to reduce overall eligibility by 20% or 620,000 claimants.

8. On 18 th October 2010, Maria Miller reiterated the "need for reform of disability living allowance to deliver savings of 20% of working age expenditure" [10] .

9. This cut is at 40-times [11] the estimated rate of fraud in DLA, which is the lowest in the benefits system. Disability and social campaigners [12] , and academic experts [13] , as well as other organisations [14] including the Social Security Advisory Committee [15] have voiced concerns that the case for reform of DLA is not clear, and that there is very little supporting evidence.

10. The consultation [16] paper states that reform of Disability Living Allowance is needed for four reasons: "The benefit caseload and expenditure is increasing at a rate never envisaged"; "The current system is too complex and the benefit is not understood"; "There is no system to check that awards remain correct"; "The benefit can act as a barrier to work". None of these reasons is convincing, as explained below.

11. Further, objectivity and consistency of assessment has been cited as a reason for the proposal of medical assessment, but this fail to account for the major variations in the type and severity of medical impairment affecting the 3.2 million DLA claimants. Consistency may be desirable but a regimented assessment may punish claimants with ‘hidden’ or ‘variable’ conditions.

12. It is also reported that 52% of DLA claims are disallowed, suggesting [17] that the application process performs well in weeding out inappropriate or spurious claims. The only way an argument can be construed is to look at the issue with a preconceived idea that there is an acceptable level of DLA claims prior to evaluating the health and impairment of claimants.

13. The fact that expenditure is increasing at a rate ‘never envisaged’ does not prove that the system is broken, as claimed in the consultation. 71% of caseload growth in the past 8 years can be explained [18] by population growth and demographic change, whilst an explosion in quarterly on-flows can be ruled out for the rest of the increase.

14. DWP RR. 648 does support the claim that DLA is poorly understood, but this would seem to support a few small changes, not replacement of the system.

15. It is not true that there is no system to ensure that rewards remain correct as, since 2000, legislation has required that all awards are subject to review after an appropriate period of time based on an individual’s

16. circumstances. [19]

17. It cannot be argued that DLA, as an in-work benefit, is a barrier to work. There is only one [20] research report by the DWP which can be used to support the claim, and this report was cited in the consultation paper. However, the unsurprising finding that DLA may be a barrier to work in a small minority of cases is outweighed in the report by the fact that: ‘ the main factor affecting the employment rates of disabled people is their disability or health condition ’ and that ‘ a larger than average proportion of DLA recipients also appears to be affected by the specific types of impairment that carry the greatest employment disadvantage for disabled people ’.

18. In fact, though the report claims that there exists a ‘ perception of disability permanently precluding work is prevalent among individuals with disabilities not already in employment ’, there is no evidence cited in the report that suggests DLA itself could be a barrier to work. Indeed, "The characteristics of DLA recipients put them at a disadvantage in the labour market even greater than those within the general IB claimant population." This quote is sourced from a report [21] which also maintains that: "DLA recipients may be more likely to return to work if they feel that they will receive adequate support regarding their health condition." Lack of in-work support is not related to DLA claims.

19. The proposition that DLA is a disincentive to work is both false and disingenuous. People who receive DLA do, as the reform consultation paper suggests, often have lower work expectations. This is because regardless of desire or ambition, many conditions and impairments make work impossible. Disabled people are often unable to compete equally in the labour market, even if there is work for them [22] . DLA is inconsequential as a barrier to work when compared to the act that: " Employers continue to have a fairly narrow perception of disability, mainly focusing on sensory and mobility impairments. There was very low recognition that, under the DDA, someone diagnosed with cancer or HIV would be considered as having a disability (at 19 per cent and 12 per cent respectively)."

20. This is because of ignorance and fear amongst employers, small employers [23] likely [31% in 2005] to "believe that taking on a disabled person would be a major risk for them", and a lack of willingness to consider making adjustments that in reality may be cheap and straightforward to make, but which are perceived as too onerous to undertake. A majority [24] of organisations have never employed a disabled person. People with high rate awards have the highest levels of impairment and are most likely to be unable to work, regardless of benefits. Those who do work are often only able to do so because of the aids, support or adaptations that DLA or Access to Work allows them to purchase. The focus on moving to work has no place in discussion about DLA other than to make the important clarification that DLA is not work related. It exists to assist with the additional cost incurred when living with an impairment or long-term health condition.

21. The changes to DLA lead to the creation of PIP under Clause 75.

22. Clause 76 effectively reduces the three rates of the care component of Disability Living Allowance to two rates of the daily living component of Personal Independence Payment. Combined with the two rates of mobility component, this meant that 11 variations on payment of DLA was possible. Clause 77 keeps two rates of mobility component, but Clause 76 means that only 11 variations in the payment of PIP exist. This is a 27% reduction in the ability to personalize PIP to the needs of each claimant.

23. The consultation paper on reform tells us that: "We need a benefit that helps contribute to the extra costs of living independently, in a way that is right for each individual." A 27% reduction in the ability to shape payment according to individual need conflicts with this aim.

24. The reduction in the number of rates will mean that existing claimants must be reclassified, especially the 1.06 million claiming the Middle Rate of the care award. These awards are likely to be downgraded given that eligibility is also to be cut by 20%.

25. Clause 78 provides for some form of medical assessment for the new benefit. The consultation paper states that: " Central to Personal Independence Payment will be a new, fairer, objective assessment, which will allow us to identify those who face the greatest need, in a more consistent and transparent manner ." The previous section of the paper does not suggest that the current DLA assessment is unfair or that it is not objective, and neither is there evidence that it is inconsistent or lacking in transparency. The current system is assessment by a variety of resources; information from a carer or support worker, the person’s GP, specialist consultant or physiotherapist. Trying to slim down this evidence base to one homogeneous assessment will mean that the impact of disability on the individual is ignored. This is definitely not objective.

26. Clause 78 should be amended to clarify that the use of mobility aids will not be considered when considering ability to carry out mobility activities. This is because the extra cost of disability will continue to exist, through the financial cost of aid or adaptation.

27. Clause 79 reforms the required period condition up to six months. This extensions of the required period ignores those disabilities arising from acute illness or accident, and the fact that extra costs due to disability may arise well before the six-month required period has elapsed.

28. Clause 83 implies [25] that anyone who receives social care support from public or social funds will no longer be entitled to the mobility component of PIP. The proposal to remove the mobility component for those in residential care homes has been the most visible issue of DLA reform, with strong arguments against [26] .

Suggested Amendments

29. page 12, line 14, insert "except for disability living allowance claimants" after "It is a failure sanctionable under this section if a claimant falling within section 22"This amendment removes the threat of sanction in employment support allowance for those claiming disability living allowance.

30. page 17, line 23, leave out "The question whether a claimant has limited capability for work or work-related activity for the purposes of this Part is to be determined in accordance with regulations" and insert "The question whether a claimant has limited capability for work or work-related activity for the purposes of this Part is to be determined in accordance with regulations except where the claimant also claims disability living allowance, in which case it is determined in consultation with their General Practitioner and other relevant professionals."This amendment removes the work capability assessment requirement for the most severely disabled and disability living allowance claimants.

31. page 35, line 36, leave out Clause 51: Period of entitlement to contributory allowance This amendment removes the time-limiting of ESA.

32. page 36, line 20, leave out Clause 52: Condition relating to youth This amendment removes the abolition of ‘youth rules’ for ESA.

33. page 36, line 40, leave out Clause 53: Claimant commitment for employment and support allowance page 42, line 44, insert "except for disability living allowance claimants" after "It is a ailure sanctionable under this section if a person"This amendment removes the threat of sanction in employment support allowance for those claiming disability living allowance.

34. page 54-61, leave out Part 4: Personal Independence Payment In the case that Part 4 stands, it should be amended as follows:

35. page 55, line 2, insert ‘(b) "the moderate rate" means such weekly rate as may be prescribed;" and re-list as appropriate.This amendment provides for the creation of three rates of th daily living component, restoring the Bill’s provisions to equivalence with disability living allowance.

36. Page 56, line 16, leave out "(a) on the basis of an assessment (or repeated assessments) of the person;" and insert "on the basis of written evidence from the claimant, registered care-workers, social workers and other chartered professionals, and specialist medical evidence". Page 56, line 19, leave out "assessment" and insert "evidence-gathering" Page 56, line 21, insert "only in the case that insufficient evidence has been gathered according to the means described in Subsection (1)(a)." The amendment means that the regulations may make provision for what further evidence is to be considered, but only where insufficient written evidence has been gathered.

37. Page 56, line 21, insert "(d) must provide appropriate weighting to be given to the various sources of evidence to be considered; with specialist medical evidence of impairment being central to any claim, and other evidence being supplementary to determining the extent to which the person’s ability to carry out daily living or mobility activities is limited by the person’s physical or mental condition;" This amendment means that the consideration of the written evidence provided will proceed with weighting of the sources of evidence, with specialist medical evidence required to prove impairment.

38. Page 56, line 22, insert "(4) In this Part "insufficient evidence" means that specialist medical evidence is inconclusive regarding the extent to which a person’s ability to carry out daily living or mobility activities is limited by their physical or mental condition" and renumber subsections as appropriate.This amendment provides a clear definition for what is insufficient evidence to decide at which level of award the person may claim.

39. Page 56, line 23, insert "about the written evidence from the sources listed in subsection (3) that is needed" and leave out "(a) about the information or evidence required" The amendment means that the regulations will only provide for the gathering of written evidence in the first instance.

40. Page 56, line 26, insert "only when written evidence is insufficient" after "requiring a person to participate in such a consultation, with a person approved by the Secretary of State, as may be determined under the regulations (and to attend for the consultation at a place, date and time determined under the regulations)." Page 56, line 26, insert "requesting a person to participate in a face-to-face consultation" and leave out "requiring a person to participate in such a consultation" The amendment provides that a face-to-face consultation will be requested only when insufficient written evidence has been provided.

41. Page 56, line 30, leave out Subsection (5)The amendment removes the threat of sanctions in cases of non-compliance

42. Page 56, line 45, leave out "previous 6 months" and insert "previous 3 months" and change subsequent references accordingly. This amendment restores the three-month required period condition.

43. Page 58, line 25, leave out Clause 83: Persons receiving certain services This amendment deletes the provisions that will stop the payment of the mobility component to those in care homes.

44. Page 59, line 27, insert "specialist medical evidence regarding the likely term and limiting effect of the person’s physical or mental condition" and leave out "guidance issued by the Secretary of State." This amendment means that the person making the award must regard specialist evidence when deciding on the term of the award.

45. Page 60, line 8, insert "Parliament may" and leave out "The Secretary of State may". This amendment ensures that only Parliament may make supplementary provision regarding Part 4 of the Bill.

March 2011

[1] Library Standard Note, The Work Capability Assessment for Employment and Support Allowance , SN/SP/5850

[2] Gentleman, Amelia, 2011. New disability test ‘is a complete mess’, says expert, The Guardian, 23 rd February

[3] Library Standard Note, Time-limiting contributory Employment and Support Allowance (SN/SP/5853)

[4] Disability Benefits Consortium, Disability Benefits Consortium response to the Government spending Review , 18 November 2010

[5] Youth provisions in Employment and Support Allowance Impact Assessment

[6] Left Foot Forward, ‘Simplification’ leads to severely disabled young people’s benefits being cut , 18 February 2011

[7] Housing Benefit – uprating Local Housing Allowance rates by CPI Impact Assessment

[8] Public Accounts Committee, The Community Care Grant , HC 573 2010-11, 16 December 2010

[9] HM Treasury, Budget 2010 , HC61 2010-11

[10] HC Deb 18 October 2010 c452w

[11] Department for Work and Pensions, Fraud and Error in the Benefit System: October 2008 to September 2009

[12] Disability Living Allowance reform (SN/SP/5869)

[13] 2011, Letter: Welfare reform bill will punish disabled people and the poor, The Guardian, 9 th March

[14] The Broken of Britain, Demolition of the case for reform, 09 January 2011

[15] Social Security Advisory Committee, Disability Living Allowance reform consultation: a response from the Social Security Advisory Committee, 2011

[16] Department for Work and Pensions, Public consultation – Disability Living Allowance reform , Cm 7984, December 2010

[17] Disability Living Allowance: Disallowed claims , 2008, DWP Research Report No. 490

[18] Left Foot Forward, The ‘inexplicable’ rise in Disability Living Allowance explained, 14 February 2011

[19] Consultation response by the Disability Benefits Consortium , January 2011, p8

[20] Disability Living Allowance and work: Exploratory research and evidence review, 2010, DWP Research Report No. 648

[21] Disability Living Allowance and Work Expectations: Analysis of the NDDP Eligible Population Survey, 2009, DWP Research Report No. 584

[22] Organisations’ responses to the Disability Discrimination Act , 2007, DWP Research Report No. 410

[23] Disability in the workplace: Small employers' awareness and responses to the Disability Discrimination Act (1995) and the October 2004 duties , 2005, DWP Research Report No. 277

[24] Organisations’ responses to the Disability Discrimination Act : 2009 study , 2010, DWP Research Report No. 685

[25] Library standard note , Disability Living Allowance mobility component for people in care homes (SN/SP/5841)

[26] Disability Alliance, Don’t limit mobility , January 2011