White Paper on Universal Credit

Written Evidence Submitted by Disability Alliance

1 Summary

1.1 Whilst Disability Alliance welcomes some aspects of the Government plans, including benefit simplification, we have very significant concerns that many disabled people will be affected by benefit cuts, reduced support to find work, enforced work and even being cut from out of work benefits altogether as a result of the Universal Credit (UC) and broader plans.

1.2 The Government has suggested disabled people are protected during reform announcements. However, the assessment system to judge level of needs, the Work Capability Assessment (WCA) which will determine access to the UC, is severely flawed. Many disabled people will be found fully fit for work who we believe should be receiving Employment and Support Allowance (ESA) and a higher level of support to find appropriate work. Instead, many disabled people will experience the harshest elements of reform – as stated in the Universal Credit white paper plans to impose conditions and sanctions even on disabled people receiving ESA.

1.3 In our response to the Select Committee inquiry we outline concerns regarding several areas including: the future of the discretionary social fund; council tax and council tax benefit; permitted work for disabled people; defining disability and accessing the Universal Credit; tackling poverty;

2 Disability Alliance (DA)

2.1 DA is a UK charity seeking to break the link between poverty and disability. We provide benefits and other welfare guides and support to disabled people, their families and welfare rights advisers. We are best known as publishers of the comprehensive benefits guide: the Disability Rights Handbook.

2.2 Our Board of Trustees are mostly disabled people and we are a membership organisation representing over 250 organisations across the UK.

2.3 For further information about DA please visit: www.disabilityalliance.org.uk

3 Universal Credit: welfare that works

3.1 Disability Alliance welcomes some of the white paper’s aims: tackling poverty; simplification of the complex system; and ensuring people keep a greater proportion of earnings when moving off benefit into work. However, we have concerns about some proposals and interlinked Government plans.

3.2 Discretionary Social Fund

3.2.1 The white paper suggests (page 47) that:

‘The current system of Community Care Grants and Crisis Loans will therefore be reformed. In England, Local Authorities will be responsible for administering much of the reformed system – ensuring this support is tailored to local circumstances and targeted only at genuine need. Local Authorities will be consulted on the design of the new system. If there are new administrative burdens on Local Authorities they will be funded by the Department for Work and Pensions in the usual way. However, we expect Local Authorities to utilise existing delivery mechanism and structures where possible. The Devolved Administrations will determine the most appropriate arrangements for Scotland and Wales.’

3.2.2. The Public Accounts Committee in its report 'The Community Care Grant', published 16/12/10 states that:

The way the scheme operates is both inefficient and unfair: awareness about the grant is patchy; it is unevenly distributed across the country and across different groups of people. Errors are too common, with a large proportion of decisions challenged and over-turned; and administrative costs are unacceptably high.'

3.2.3 In addition, the Public Accounts Committee found that the cost of administering the course is unacceptably high and states that it has concerns about the fairness of the scheme:

'Funding is not fairly distributed across the country, with a clear imbalance between funding in each district and potential demand and need. Thus, an applicant's chances of receiving a grant vary according to where they live. We consider the Department should do more to forecast demand based on established patterns and trends. Regional funding allocations are decided by Ministers but it is up to officials to provide clear advice about changes needed to improve the fairness of the scheme.’

3.2.4 The Committee also states that it considers that there is scope to help more people by making the purchasing arrangements more efficient, eg by agreeing central contracts for frequently requested items which could generate financial savings of around £14 million a year and provide a guarantee of quality to applicants.

3.2.5 DA believes that devolving CCGs and CL’s to local councils would reinforce these problems. Access to help could become an even more significant postcode lottery if each local authority has its own version of CCGs and CLs and criteria for awards.

3.2.6 We believe this proposal requires further development and scrutiny – and are particularly keen to know if there will be a right of independent appeal (and where from) if refused a CCG/CL as this may be harder to achieve under a more localised system.

3.3 Council Tax and Council Tax Benefit

3.3.1 The white paper states (page 21) that:

‘Local Authorities will be given scope to take account of the priorities of their own local communities when determining the amount of support for vulnerable and low income households to meet their Council Tax bills. Local Authorities will be better able to provide a joined-up system of support for people on low incomes that dovetails with the various rebate and discount schemes which are already part of the Council Tax regime, while at the same time protecting vulnerable groups. While the aim is for a more cost effective system overall, any new administrative burdens on Local Authorities will, as a matter of principle, be funded by the Department for Work and Pensions in the usual way.’

3.3.2 DA believes this requires further consideration as there are similar potential postcode lottery problems with each local authority administering its own version of a rebate scheme.

3.3.3 We also fear that disabled people will be less likely to be able to move under these proposals, to a more affordable area for example with less CT or a better rebate scheme.

3.4 Permitted work

3.4.1 At present those in ESA support group can do up to 16 hours ‘permitted work’ and earn up to £95 per week indefinitely – and people in the ESA work-related activity group for up to 52 weeks. The income is disregarded in terms of income-based ESA and HB/CTB.

3.4.2 The ability to undertake permitted work is an important way that disabled people or people with significant health conditions can consider or make the transition back towards full-time work.

3.4.3 However, although the white paper suggests that earnings disregards will be more generous then at present for certain groups (such as disabled people) permitted work receives no mention and requires the Government to develop or explain its plans.

3.5 Disability

3.5.1 The Government has suggested that disabled people are protected from the harsher elements of welfare reform, but with little detail. The two specific paragraphs in the white paper (on page 18 of the white paper) relating to disability in the white paper require significant development:

‘The Government is absolutely committed to supporting disabled people to participate fully in society, including remaining in or returning to work wherever feasible. The model introduced in 2008 for the Employment and Support Allowance has worked well. This provides additional benefit components for people in the Work Related Activity and Support Groups. We intend to mirror this approach in Universal Credit. [And] The Government believes the existing structure of overlapping disability premiums is overly complex and causes confusion. We are considering what extra support may be needed for disabled people in Universal Credit, over and above the additional components mentioned above and the benefits available elsewhere in the system.’

3.5.2 DLA will not be part of the UC and is to be reformed over a similar timeframe to UC introduction. DLA (for working age adults) will become the ‘Personal Independence Payment’ (PIP) with fewer component rates than the current DLA system. DA believes the Government must clarify the award of premiums under the proposed PIP and UC system.

3.5.3 At present the lower care rate of DLA gives entitlement to the following for example: disability premium and tax credit disability element; qualifying benefit for working tax credit; no non-dependent deductions; and student eligibility for ESA. We are concerned this may mean people who lose lower rate care component (from current DLA which will not be replicated in the PIP) will not be awarded a UC premium. We believe this requires further development in Government plans.

3.5.4 The white paper acknowledges further consideration of support for disabled children is required (page 21) and Disability Alliance would also welcome further development of Government plans in this area.

3.5.5 We are very concerned that the Government plans to introduce sanctions on disabled people receiving ESA (page 26) and we would also welcome a focus on how the Government is developing the white paper statements that there will be requirements for disabled people to undertake work related activity (page 26) and what sanctions might be imposed. Disabled people experience higher costs of living and greater barriers to participation. Any work related activity must be appropriate and any sanction for non-compliance must be proportionate, reasonable and not leave disabled people unable to afford costs of living. We believe the Government needs to be clear what its proposals will mean and how many disabled people could be affected.

3.5.6 Due to the tough nature of accessing ESA (through the WCA) it is very likely that claimants will meet the Equality Act 2010 definition of disability. Many disabled people will therefore be exposed to levels of conditionality and sanctions never previously experienced. Government statements on ‘protecting disabled people’ may also confuse some citizens into thinking proposals may not affect them. Developing concrete proposals in this area would be very welcome, as would knowing the process for implementing sanctions, where responsibility for decisions would lie and how appeals might be taken, heard and decided.

3.6 Accessing the UC

3.6.1 We are concerned that the route into the UC will be through the Work Capability Assessment (WCA). The WCA has not worked well and receives the highest rate of appeals (46,500 in under two years) of any benefit and routinely assigns disabled people to a benefit (JSA) which offers little tailored help to get and keep work.

3.6.2 The WCA is also getting tougher under Government proposals tabled in August through changes to the limited capability for work descriptors and an overall DWP aim to increase the number of people found fit for work by 5%. We believe this will mean further disabled people, including wheelchair users and people with sensory impairments experience the tougher elements of Universal Credit plans (including sanctions) as outlined in the white paper (page 26).

3.7 Poverty

3.7.1 The Government expects 350,000 children and 500,000 working age adults to be moved out of poverty through ‘changes to entitlement and increased take-up of benefit’ (page 5 of the white paper). We believe this statement requires further depth/development and a clearer indication of the timeframe for this figure to be reached. We are particularly keen for the Government to measure and monitor disability poverty if DWP is confident its aims will be reached and we hope the Committee will explore this issue.

3.7.2 We are very disappointed that the white paper did not come with a fuller equality impact assessment which may have examined this issue. We believe that this should have been provided under equality legislation when the decision was taken to introduce the UC and hope the commitment (page 60) to provide this in full in January 2011 will be met.

3.7.3 The take-up section of the white paper (page 17) was very short and included little detail of the costs or number of people involved. The white paper expects the UC to save £1 billion in reduced error and fraud (page 60 of the white paper) but no figure is provided relating to additional numbers of people claiming the UC (or other benefits) which is also suggested in the white paper as a benefit of the Government’s proposed approach (see page 10 for example).

3.7.4 We are especially keen to understand how many additional people will be entering the welfare system as a result of the Universal Credit. We would also welcome understanding if people losing all out of work benefits as a result of time limiting contributory ESA to 12 months is implemented has been factored into DWP tackling poverty estimates. The DWP have suggested 280,000 disabled people will lose contributory ESA and all out of work benefits through this time limiting and we believe this underestimates the figure – which our analysis suggests will be closer to 400,000 disabled people. Disability Alliance has sought answers from DWP on this issue and we believe these contradictory figures and Government estimates of tackling poverty through the UC require further examination and for Government plans to be fully developed and clarified.

3.8 Costs

3.8.1 The cost of introducing the UC is £2 billion (page 51) for the period of the current Spending Review. This is the same figure as disabled people on contributory ESA are set to lose under Government plans to time limit this support to twelve months from April 2013. We are concerned that disabled people are paying for the UC – which represents an unfair burden falling on already limited shoulders. A third of disabled people live in poverty in the UK and we believe the contributory ESA cut and other welfare changes risk increasing disability poverty.

3.9 Simplification and timetable for reform

3.9.1 While the aim of UC is to simplify the benefit system the social fund and council tax benefit proposals may mean these become more complicated and unfair (see 3.2 and 3.3 for further information).

3.9.2 We are unclear why the Government has chosen to exclude contributory benefits from the UC approach, for example including income-based JSA and ESA but excluding contributory JSA and ESA. This increases complexity to some extent.

3.9.3 Inevitably, changes to any system also require a period of transition for people moving from one to another benefit and this also institutes a degree of complexity. The timeframe to introduce the UC is dramatically short and we are concerned that Jobcentre Plus and DWP staff will be under enormous pressure and unable to access appropriate training to meet and identify disabled service users’ needs adequately. This could result in further barriers to service use – and to entering work or leaving benefits for some disabled people. We are keen to understand: the Government’s plans to train staff before UC implementation in 2013; when it will begin; and how many staff will receive training before UC introduction. This is uncovered in the white paper but paramount to disabled people having confidence that the new system will be ready and able to meet legitimate needs.

3.9.4 A further aspect of simplification in benefits is devolution. DA is keen to know if the NI Assembly is agreeable to DWP plans. On some benefit and other support for disabled people, devolved authorities have chosen to provide more generous support (eg on prescriptions and within care service charges for example) and we are keen to learn what differential impact introducing the UC may have in the component parts of the UK.

3.10 UC payment and assessment periods

3.10.1 We would also welcome clarity on proposed payment systems for the UC. We understand this will be monthly but this may adversely affect millions of people used to a different process and may mean changes of circumstances are taken into account only in the next calendar month. We would welcome the Government explaining its proposals on this issue fully.

December 2010