Welfare Reform Bill

Memorandum submitted by MENCAP (WR 08)

About Mencap

Mencap is the UK’s leading charity working with people with a learning disability and their families and carers. Together, we are fighting for a fair deal for everyone with a learning disability and those that support them.

We campaign for change at every level of government – locally and nationally. And we support people with a learning disability to speak up for themselves, to fight for the changes they want in their local area, and to get involved in the life of their communities. We also provide a wide range of services – housing, education, employment and leisure – that give people the chance to lead fulfilling, active lives with as much independence as possible.

People with a learning disability and benefits

Given the multiple barriers to employment faced by people with a learning disability, many are reliant on benefits, including Employment and Support Allowance, Housing Benefit, and benefits like Disability Living Allowance (DLA) which recognise the extra costs of a disability. Less than 7% of people with a learning disability known to social services are in any form of paid employment. [1] Even where people do work, it is often for low pay and for part-time hours. However, research shows that 65% of people with a learning disability want to work and that with the right support they can – and do – make a significant contribution to the workplace.

People with a learning disability tell us about the importance of work to them. It is not just about the financial benefits that employment brings, it is also about the opportunity to become more independent and take greater control of their own lives, to expand their social relationships, to play a more active part in the wider community, and to develop confidence and self-esteem.

Specific elements of the Bill

1. Regulations

Our ability, and the ability of other disability organisations, to influence this legislation is limited by the fact that much of the substance of the Government’s welfare reform agenda – most of the issues which we and a wide range of organisations and individuals are concerned about, and which are legitimate areas of debate – are left to secondary regulations which will not be debated during the passage of this Bill. This means we are not in a position – along with many other organisations - to scrutinise and comment on this important legislation to the extent we would have preferred.

2. The introduction of a universal credit [Clause(s) 1 – 12]

Mencap comment

· We know that many people with a learning disability would like to work and we therefore welcome the focus on ‘making work pay’ and the principle of improving and simplifying the welfare system. In the context of barriers to employment faced by people with a learning disability, Mencap has for some time raised issues around the complexities of the benefits system and the in-built disincentives within the benefits system, as well as the associated ‘risks’ of coming off the security of benefits and moving into employment. However, in terms of employment, ‘making work pay’ is only one of many aspects that need addressing in order to help and support people with a learning disability to progress into employment – there must be the jobs available, the appropriate and specialist support must be there, employer prejudice must be tackled and so on.

· The Universal Credit White Paper outlined a proposed withdrawal rate of around 65% and outlined estimated maximum disregards. However, these will be provided for in regulations and have therefore yet to be confirmed. The Impact Assessment states that 1.7 million households will have notional lower entitlements than they otherwise would have done as a result of the Universal Credit. [2] While simplification of the benefits system is to be welcomed in principle, it must still be flexible enough to allow for the particular circumstances and needs of individuals – for example, it should not be at the expense of those people who cannot find employment through no fault of their own or who are unlikely to ever be able to work because of their disability.

· There must also be continued support for people in the most vulnerable circumstances. While we would never want anyone with a learning disability to be excluded from the world of work, it is also the case that for some people – due to the severity of their disability – work is unlikely to ever be a realistic option. The Universal Credit White Paper stated only that "in most cases" benefit rates for those not in work will ‘generally’ be the same as under the current system.

· The introduction of the universal credit must be considered within the context of the wider areas of welfare reform being introduced by the government, and which Mencap is concerned may adversely impact on people with a learning disability. These include reductions to benefits (e.g. Disability Living Allowance reform), as well as the roll-out of the Work Programme and current issues with the Work Capability Assessment (WCA).

3. Support for disabled people [clause 12]

Mencap comment

· Mencap seeks further clarification about how this additional support for disabled people will be factored into the Universal Credit. At present, there is a complex system of extra support available through premiums in means tested benefits (e.g. the severe disability premium, enhanced disability premium etc.). We do not know if further support will be available though extra premiums in the personal allowance of universal credit or how this will work. In addition, while the universal credit will certainly replace Working Tax Credit (WTC) there is no mention in the Bill of anything to replace the Disability or Severe Disability Elements which currently exist within Working Tax Credit.

· Additionally current entitlements for additional financial help for disabled people who are in work need to be considered in the context of wider changes to the system. Thus, current entitlement for the disability element of working tax credit is based on criteria including (i) the individual continuing to have a disability which puts them at a disadvantage in the labour market and (ii) the individual fulfilling a benefit condition – for example, receipt of DLA. However, additional changes to the welfare system could lead to fewer people being eligible for DLA and more people being found ‘fit for work’. It is unclear what criteria will determine entitlement to additional support.

· It is also important to highlight at this point that the Severe Disability Premium is a passport to other benefits, such as the 1-bedroom Local Housing Allowance rate for the severely disabled. This is a vital benefit for many people with more severe learning disabilities and can enable them to live more independently. Mencap would like to seek reassurances that none of the current arrangements will be negatively affected by the changes.

4. Claimant responsibilities [Clause(s) 13 – 27; 49, 56]

Mencap comment

· Mencap is concerned about increased conditionality and an enhanced sanction regime, particularly in relation to those facing "full conditionality". Mencap seeks assurances that any ‘failure’ to secure employment by an individual looks holistically at the range of factors impacting on the individual. This should include consideration of the number and range of jobs available to someone bearing in mind their particular disability, as well the support available to them (and possible failure by a Work Programme provider) and the prejudices of some employers. It is unfortunate that an increasing focus on ‘conditionality’ and ‘sanctions’ masks the fact that many people with a learning disability would very much like to work but have never been given the opportunity to do so.

· There is a need for conditions that are reasonable and take into account the support needs of people with a learning disability. A failure to attend a mandatory interview, for example, may be to do with an individual’s lack of understanding as to what was expected of them, rather than a deliberate lack of compliance.

· The independent review of the WCA, led by Professor Harrington [3] , acknowledged that the WCA disadvantages certain conditions, including those with less apparent, ‘hidden’ disabilities and those with fluctuating conditions. Mencap believes that that the assessment is contributing to insufficient numbers of people receiving the extra support available to members of the work-related activity group of ESA, but rather being found ‘fit for work’ and moved onto JSA. A much higher percentage of people are being found ‘fit for work’ than was first anticipated. Recent DWP statistics have shown 66% of claimants being found fit for work for all completed assessments. [4]

· We believe that the proposed changes to the WCA as set out in the ESA amendment regulations [5] recently laid before Parliament may well exacerbate some of the current problems with the WCA and could deny even more people the support they need.

· There is a need for the DWP to ensure that those involved in the processes surrounding the administration of out-of-work benefits – particularly in relation to sanctions and increased conditionality – are aware of and understand the needs of people with a learning disability. Action plans, work-focused interviews and work-related activity must give due regard to the specific support needs of people with a learning disability. If a claimant must show "good reason" for failure to comply with a particular requirement, ‘good reason’ should include a claimant’s failure to understand what was expected of them, and inadequate support for the claimant in complying with conditions imposed on them.

· It is essential that claimants are clear about their rights in relation to benefits and accessing employment support. The success of the government’s ambition to move large numbers of people off benefits and into work is dependent on the appropriateness and availability of the support available to them. The introduction of a ‘claimant commitment’ should be matched with the development of a customer charter which clearly details the rights and responsibilities of those accessing DWP and out-sourced employment services – i.e. what they can expect in return.

5. Council Tax Benefit [Clause 34]

Mencap comment

· Mencap would be concerned about the abolition of Council Tax Benefit , without further information being available as to what will happen to the benefit in the future. While there have been some suggestions that it may be replaced by a local grant, there is no further confirmation of this on the face of the Bill. It is difficult to know therefore what the implications would be for pe ople with a learning disability. H owever, we would be concerned if the changes would lead to people with a learning disability losing their entitlement to Council Tax Benefit or elements of it as a result.

6. Contributory Employment and Support Allowance [Clause(s) 51-52]

Mencap comment

· Mencap is generally very concerned about the implications of time-limiting contributory ESA. While some people may be eligible for income-related ESA instead, some claimants will not meet the conditions and will therefore receive no support at all, effectively dropping out of the system. It is the right of a disabled person to be financially supported if they are unable to work. The government has said it is committed to promoting independence of disabled people, but if an individual loses their contributory ESA and is not eligible for income-related ESA, they will receive nothing.

· The Government has stated that the introduction of a time-limit for contributory ESA is about ‘improving work incentives’. However, this reinforces the view that a lack of employment is clearly the fault of the individual and nothing to do with the particular circumstances / situation and / or support needs of the person or the prejudices of some employers. There are already conditions built into the system to ensure people are ‘pulling their weight’ (e.g. increased conditionality and an enhanced sanctions regime), thus we can assume where this is not happening, the individual is ‘engaging’ and does not therefore need ‘incentivising’.

· There will be many people who are further from the labour market and who may take longer to move into work than 365 days. For example, a recent Pathways to Work report [6] states that only 12% of those with ‘mental and behavioural disorders’ (including people with a learning disability) found employment within one year.

· The rationale for the government’s change in policy on the 10% Housing Benefit reduction for those on JSA for a year was that: "The more we looked at this, the more I[Secretary of State] reviewed the interplay between that reduction at 12 months and the universal credit and work programme meant that all of these people were going to move into the work programme anyway, so they would be having intensive help to get back to work." [7] This same rationale could also be applied to those on ESA. There is therefore no need to time-limit contributory ESA.

· ESA / IB in Youth allows for those people who have been unable to pay contributions from childhood, supporting those people with severe and lifelong disabilities. While we recognise that ESA differs from IB, working more proactively to support people to move towards work, it is also important to recognise that time-limiting contributory ESA for those receiving IB in youth (and who will be migrated a across to ESA) may be more of challenge. This will be particularly so for certain groups (for example, those with learning disabilities) who (being ‘PCA exempt’), who historically, have been considered "unemployable", with automatic entitlement to incapacity benefits. The system needs to acknowledge the potential difficulties of challenging prevailing low expectations in the context of increased conditionality under welfare reform. For someone with a learning disability, for example, where work may never been discussed as an option for them, potentially faces an additional condition (i.e. a time limit on their ESA). Again, this does not seem to recognise the significant barriers to employment faced by those in the work-related activity group of ESA.

7. Housing benefit [Clause 68]

Mencap comment

· Mencap is concerned that Clause 68 opens the door for uprating housing benefit in line with the Consumer Price Index (CPI) rather than real rents, in effect restricting housing benefit levels even further than the measures already introduced. Research undertaken by the Chartered Institute for Housing (CIH) shows that rent level increases outstripped CPI in every year from 1999 to 2009, with 2009 being the only exception. Furthermore, the Cambridge Centre for Housing & Planning Research calculated that while in the period of 1997/ 98 to 2007/08, CPI increased by 20% while average rents in the same period increased by 70% [8] . Introducing CPI uprating for housing benefit the CIH has suggested could lead to the lowest real rent being higher than the 30th percentile of LHA some time in the future.

· Mencap would strongly urge a rethink around uprating housing benefit along CPI lines, as this is likely to lead to pushing people with a learning disability further into poverty, and make living in private sector accommodation unsustainable at a time when more emphasis is put on the private rented sector as a provider of homes for vulnerable people . People with a learning disability already have restricted access to different types of accommodation and this change would only exacerbate this situation further.

· Mencap is also concerned that the new size criteria that will be introduced via Clause 68 will negatively affect people with a learning disability living in a social home. ? The impact assessment on under-occupation of social housing shows that the new rules would hit 670,000 people living in the social housing sector and reduce their income by on average £13 per week, reaching 760,000 by 2020. With disabled people being twice as likely as non-disabled people to be social housing tenants [9] , Mencap is concerned that a large proportion of those affected by these changes will be disabled people , including people with a learning disability . No equality impact assessment is yet available to confirm the numbers, so it is difficult to know how many disabled people will be affected. However, figures highlighted in a briefing by Shelter show that nearly half of all households in the social sector contain at least one person with a disability or a serious medical condition [10] . Taking this distribution and applying it to the overall number of people affected by the changes to size criteria as outlined in the impact assessment leads to an estimate of potentially between 300,000 – 400,000 households with someone with a disability being affected by the changes [11] .

8. Abolition of DLA and introduction of the new PIP [Clause(s) 75 – 92]

Mencap comment

· Mencap raised concern as part of the DLA reform consultation process about the general lack of clarity about the numbers likely to be affected by the proposed changes to DLA. The June Budget announced predicted savings of
over £1 billion a year by 2014-15, but there is no detail about how the reductions are likely to be achieved. The focus of the consultation on those disabled people with the "greatest need" suggests the exclusion of many disabled people with ‘lower level’ needs but who still face additional costs associated with their disability or condition. This is supported in the ‘potential equality impact’ detail provided in the consultation document which states, "it is likely that some disabled people with lesser barriers to leading independent lives will receive reduced support". We do not agree this "has been justified by the policy aim to focus support on those with the greatest need". The people accessing the lowest rates of DLA are often unlikely to be able to access support elsewhere and cuts to these groups could lead to unsustainable pressure on social care or NHS services, meaning people’s needs could remain unmet elsewhere. We believe a greater analysis of the potential knock on costs to government is required.

· It will be essential that any new assessment reflects the broad range of ‘everyday activities’ that an individual needs to undertake in order to fully participate in society. The assessment should be robust enough to reflect a wide range of disabilities and conditions. It will need to effectively measure the multi-dimensional drivers that impact on the costs that disabled people incur. It is difficult to imagine how an assessment looking at ‘everyday activities’ such as "planning and making a journey" and "communicating with others" will take into account some of the ways in which DLA is currently spent – for example, to help with increased electricity bills associated with doing laundry more often or for more expensive specialist clothing.

· The introduction of a "face-to-face meeting with an independent healthcare professional" appears to be very similar to the WCA. Given the current problems with the assessment and surrounding processes, this is causing increased anxiety to many disabled people and has associated cost implications for Government. Also, given that the assessment is effectively being designed to ensure an outcome of a "20% reduction in caseload and expenditure once fully rolled out" [12] , there are concerns as to the objectivity of this process.

· It should be noted that DLA is already said to be a benefit which is based on a social model of understanding – that is, that disability is rooted in social and environmental factors which renders a person’s condition or disability ‘disabling’. From this perspective, DLA recognises that it is these factors which drive a person’s disability costs – not just their impairment or condition. It will be a challenge to establish an assessment which looks at both the functional impact of a person’s disability, as well as one that takes into account the social and environmental factors impacting on an individual’s day-to-day costs. [13]

· Similarly to the disability premiums, DLA is currently a passport to a range of other benefits, and Mencap would seek reassurances that any changes will not negatively impact on those interactions.

9. Removal of DLA mobility from those in residential care

Mencap comment

· We do not support this proposal. We are very concerned about the impact this will have on disabled people and believe the rationale being presented by the government for this proposal is based on a misunderstanding. Further, we are very concerned about the government’s continuing shift in rationale on this issue. Since it was announced, the government have given numerous justifications for the proposal, yet has not provided the evidence to support them.

· Mencap strongly believes a cut to this benefit will reverse decades of progress and lead to the physical and social isolation of many people with a learning disability. Furthermore, it signals a concerning reversal of the government’s purported commitment to promoting social justice for disabled people and the focus that has been given to increasing independence, participation and employment opportunities.

· We welcome the commitment to review the funding of personal mobility for people living in residential care. The Government has said that there is a need for greater clarity as to where responsibility lies for meeting personal mobility needs.

March 2011