The role of incapacity benefit reassessment in helping claimants into employment - Work and Pensions Committee Contents


6  Reassessment outcomes

Outcomes

153.  The Department published interim results from the reassessment trial on 1 April 2011. As of 22 March, 1,626 decisions on whether a customer's claim qualified for conversion to ESA had been made. Of these:

  • 38% (616 individuals) were placed in the WRAG
  • 30% (484 individuals) were placed in the Support Group
  • 32% (526 individuals) were found fit for work and not entitled to ESA.[195]

It should be noted that these figures do not take account of the outcome of appeals which, as we have discussed above, have previously had a 40% success rate.

154.  The Papworth Trust pointed out that, at the start of the reassessment process, the Government had estimated that:

  • 65% of claimants would be placed in the WRAG
  • 20% would be placed in the Support Group
  • 15% would be found fit for work.[196]

The Government welcomed more people being found fit for work than it had originally estimated.[197] However, the Papworth Trust was concerned at how different the predictions were from the outturn:

We are concerned that vulnerable people are being wrongly assessed as fit for work, and what the legacy holds for those people subsequently placed onto Job Seekers Allowance (JSA) on reduced incomes and with less support to find employment. In our experience, simply reducing benefits does not help the hardest to reach to find work; instead tailored support is required to help them into employment.[198]

155.  Professor Harrington believed that the number found fit for work was "surprisingly high".[199] However, he stressed that this was likely to change with improvements in decision-making:

I think one of the things that will happen—to the fit-for-work, the work-related activity group and the support group—if we get the decision right, meaning similar to the way in which the judges have changed it, is that you will probably find fewer people in the fit-for-work group and more in the WRAG, and possibly more in the support group because that is what is happening where the appeals are upheld by the judges. If, as I keep saying, the decision-makers have the same information available to them, at least in 40% of these cases, my suggestion is that they will probably come to the same conclusion [...].[200]

156.  The Minister stressed that implementation of the Harrington changes and those resulting from the trials meant that "we genuinely do not know" what the outcomes were likely to be: "where we end up in terms of the final numbers will really only become apparent in a few months' time".[201] However, he also expected to see "a fairly consistent pattern all the way through the migration".[202]

157.  A number of submissions from individuals indicated a degree of suspicion about the consistent patterns in assessment outcomes. One witness said that:

[...] the drive to reform IB has led to implicit targets for caseload reduction, with expected savings of £1bn over five years, even though the Government denies that there are targets. [...] Any policy that starts with targets for reducing a benefit is not based on compassion or a desire to help, but on an attempt to save money.[203]

When we put these suggestions to the Minister, he made clear that: "I am not aware [...] of any attempt anywhere in Jobcentre Plus to impose any targets around the categorisation of this, and I would not tolerate it for a second if I discovered that was the case."[204] Karen Foulds from JCP added that "The only benchmark we have is a benchmark for the number of decisions that we would expect decision-makers to be able to deal with. So we have planning assumptions but not [for] any of the outcomes from them."[205]

The impact of the decision to time-limit contribution-based ESA

158.  There are two types of Employment and Support Allowance; contributory and income-related. Contributory ESA is paid if the claimant satisfies the national insurance (NI) conditions. This type of ESA is not means-tested, although it is possible to receive contributory ESA topped-up with income-related ESA. Income-related ESA is paid if the claimant passes the means test, which is based on household income and capital. There is no requirement to satisfy the NI conditions.[206]

159.  In October, the Chancellor set out the intention to introduce a time limit of one year for those claiming contributory ESA who are placed in the WRAG. The change requires primary legislation and is included in the Welfare Reform Bill. Subject to Parliamentary approval, the proposals are that:

  • customers in receipt of incapacity benefits who are reassessed and qualify for contributory ESA before April 2012 will have their benefit time limited, with the 12-month period running from the point of conversion. As with existing claims, the period of time already spent on contributory ESA before April 2012 will be taken into account in calculating the 1 year period; and
  • those who are in receipt of incapacity benefits and are reassessed and qualify for contributory ESA after April 2012 will also receive 12 months benefit from the point of conversion.[207]

160.  In a written answer, DWP provided the following table which sets out the annual savings which it expects to arise from a range of time limits, including the 12 months proposed in the Bill.[208]

Table 2: Estimated savings arising from introducing time limits on contributory ESA

Savings £ million
Scenario 2011-122012-13 2013-142014-15
Welfare Reform Bill: 1 year time limit 0400 8001,100
6 month time limit 0700 1,0501,400
2 year time limit 0150 350650
3 year time limit 050 150300
4 year time limit 00 50100

The next table shows the estimated number of future recipients of contributory ESA in the Work Related Activity Group and Assessment Phase with and without time-limiting in force.[209]

Table 3: Estimated number of recipients of contributory ESA

Contributory ESA caseload in the WRAG/Assessment Phase With time limiting in force Without time limiting in force
2011-12 400,000400,000
2012-13 350,000600,000
2013-14 400,000800,000
2014-15 350,000900,000
2015-16 200,000900,000

DWP also indicated that "it is estimated that in steady state, without time-limiting, around 77% of contributory ESA claimants in the WRAG or Assessment Phase would have duration of 12 months or more."[210]

161.  Citizens Advice Scotland highlighted that:

Around 700,000 people in the UK will be affected by the change by 2015-16—around 280,000 would lose entitlement to ESA after 12 months. [...] Research undertaken for the DWP found that 31% of claimants in the WRAG group did not expect to ever return to work. Assuming that the figures from the pilot in Aberdeen and Burnley apply to the rest of the country—30% fit for work; 39% placed in the WRAG group—then the [...] figures would suggest that 30% of claimants would be moved off sickness benefit after their assessment and a further 12% moved off ESA after 12 months.[211]

162.  CAB is currently conducting a survey on its website, of people who are claiming contribution-based ESA in the WRAG group, and who have a partner who works, or who have savings over £16,000 (which would mean that they were ineligible for income-based ESA). It reports that:

One very clear message already coming through, is that people feel betrayed because, after working for many years and paying their contributions, the system will not help them when they need it. Some respondents with mental health problems express their feelings of hopelessness if their benefit stops, and some say that they will end their lives.[212]

163.  The Minister defended the proposal by stressing that the Government is applying to ESA the same principles that apply to JSA in terms of the contributory element:

We pay something back in recognition of the fact you have yourself paid in, but we only allow you to draw for a period of time. With ESA, regardless of your means, you can draw benefits indefinitely and regardless of your household income, and amongst the tough decisions we have had to take to deal with the deficit challenge that we face, one of them has been to say "We actually need to apply the same principle to ESA as we do to JSA".[213]

164.  However, a number of witnesses argued that ESA claimants face a different situation compared to JSA claimants due to their health condition and employer discrimination against former claimants with long-term health conditions. NAT gave the example of how this might affect people with HIV:

Physical and mental health problems related to HIV do not come with a time limit [...] HIV remains a stigmatised condition in the UK, so people living with HIV still face social, as well as health-related, barriers to work. Research shows that unemployment among people living with HIV may be as high as 50%. One in five people living with HIV who are in work have experienced discrimination in either their previous or current job.[214]

165.  The Middlesbrough Welfare Rights Unit argued that "Statistically disabled people remain out of work for longer than those that are able bodied, those that have been out of work for more than two years are statistically unlikely to find work unless they receive a substantial amount of help."[215]A submission from an individual emphasised:

I understand why ministers think this will work. Evidence shows that those who are off work for more than a year are less likely to return to work at all. What no-one seems to consider is that those who stay off work for more than a year are likely to be those very people with the most severe long term conditions. [...] Very high percentages of those with long term conditions are being found capable of some work and therefore placed in the WRAG group, yet their conditions are often degenerative, painful, distressing and limiting.[216]

166.  The Careers Development Group, an employment provider, explained the possible impact of the time-limit on employment support under the Work Programme:

[The proposals] could lead to customers moving from the ESA Flow Work Programme customer group and into one of the JSA customer groups. This changes the payment received by the provider for the customer, which could potentially affect the level of support providers could offer the customer. In addition, many of the Pathways to Work customers the charity works with who have more complex health needs, for example those with multiple sclerosis, potentially need longer than one year to move into employment.[217]

167.  We asked the Minister what assessment the Department had made of the potential impact of the proposals on this group. He told us:

We expect around 40% of them to move straight to income-based ESA because of their financial circumstances. We expect around another 20% to receive some element of income-based ESA, and we expect another 40% not to require ESA at all.[218]

In response to a parliamentary question on the proportion of ESA claimants placed in the WRAG who leave the benefit and move into work within a year, the Department responded that "The information requested on those leaving employment support allowance (ESA) and moving into work is not available."[219] Nor does the Department appear to collect information on the numbers of new ESA claimants who were placed in the WRAG and the Support Group in specific months in 2009.[220] However, DWP's impact assessment suggests that a high proportion of claimants are currently on the benefit for longer than a year: "It is estimated that around 90 per cent of contributory ESA customers of duration greater than 3 months and in the Work-Related Activity Group will be affected by a one-year time limit."[221]

168.  The Government's argument for time-limiting contribution-based ESA to 12 months is a result of tough decisions about the budget deficit and also to put it on an equal footing with Jobseeker's Allowance. It is true that the huge majority of JSA claimants move into employment within a year. However, we know that the JSA demographic of mainly young, male claimants with previous work experience is different to the ESA demographic, who may find it much harder to move into employment even though they may have done everything required of them to find work.

169.  Nor does it appear that the Government has the data available to make an evidence-based decision on the appropriate length of time for which contributory ESA should be payable in order to support its objective of moving claimants into employment. We recommend that the Department conducts research on whether allowing former IB recipients to claim contributory ESA for more than 12 months would provide a more realistic timeframe for them to enter employment, taking account of the two years of employment support available through the Work Programme. The research should also include an assessment of the costs of such a change. The Government should adjust its policy accordingly if the need for change is borne out by the research.

Claims withdrawn before completing the assessment process

170.  The Papworth Trust states that it is "increasingly puzzled at the significant proportion (37%) of people who close their claim before the assessment process has ended." It adds that it is "concerned about those who may have become frustrated by the system and simply given up, excluding themselves from appropriate support".[222] Other witnesses were similarly unsure why the percentage of claims withdrawn before completion of the WCA was so high. Rethink said that there was no tracking of such claimants but that it was important to find out the reasons why people were dropping out:

The honest answer is that we just do not know. We have no research evidence on this; we do not have anybody tracking. I think it is very important that, because we do not know, we do not jump to conclusions about what is happening with those people. Certainly some of our members do tell us that they feel so ill and traumatised by the whole process that they do not feel able to go to the assessment, and that is why they drop out.[223]

CAB thought that one of the main reasons that people dropped their claim could simply be because their condition improved, but believed that tracking people was important.[224]

171.  The Minister agreed that this high withdrawal rate "is a concern" and "something that we are researching and will be researching".[225] He acknowledged that "we do need to be careful about this" and made clear that the process was "not about creating a situation where people just drop out of the system and disappear into obscure poverty".[226] DWP research carried out last year surveyed people who had made an initial claim for ESA in April to June 2009. This found that around a quarter (26%) at the baseline survey and 29% at the follow-up of the closed/withdrawn group had an unknown destination.[227] DWP told us that it is conducting further research on the reasons why people end a claim for ESA, which will be available in July.[228]

172.  We share the Minister's concern about the high rate of claimants who withdraw from the assessment process before completion. It is important that the Government understands the reasons for this and gains a greater understanding of the destination of these people, to ensure that no one is left without appropriate support.

Tracking of claimants

173.  Professor Paul Gregg argued that:

[...] it is clearly essential to track the progress of those denied access to the new benefit, especially among those previously claiming Incapacity Benefits, to study what is happening to them. Are they moving to JSA, getting jobs or suffering acute deprivation without any financial support? By tracking people according to what conditions they are presenting with, we can assess which conditions are not being picked up well, if groups fail to move into work. But again no such research or tracking is apparently being undertaken.[229]

174.  The Department made the point that "Information on claimants' destinations is particularly thin because it is presently too early in the process. For ESA claims the Department does not get reliable information about destinations until a few months after the decision."[230] However, Professor Gregg suggested that tracking of different categories of claimant could be achieved quite simply:

The DWP people who run the administrative system can or should be able to, with a little bit of a lag, tell you where people who have had decisions made around their ESA status are now in the welfare system. If you also go on to include whether they are in receipt of National Insurance payments and so on, which is available within the tracking system, you can see essentially whether somebody is working, you can see whether they are claiming other benefits or if they are just not within the system at all now—i.e. they are not in work or in benefits. It is not that hard; it would require an IT investment and some dedicated staff, but I feel there ought to be a routine reporting system for people like Professor Harrington to be able to use to see where people have gone.

175.  The Minister assured us that "we will do a lot of tracking":

[claimants] who came from Incapacity Benefit are a discrete group within the Work Programme and so therefore we will certainly monitor very carefully what happens to them. We will understand if there are differences in the work placement rates between that group and others, how great those differences are and then we will carry out detailed research on a number of the groups post the WCA.[231]

176.   We strongly believe that the success of the IB reassessment is dependent on its effectiveness in helping people with disabilities and long-term health conditions into employment. In order to understand whether the assessment process is achieving this, the Government needs to track the destination of all claimants. We recommend that tracking includes categorising claimants on the basis of the health condition they presented with, to establish how different groups fare in terms of getting into sustained employment. It should also include recording the number of claimants who are initially allocated to the wrong group and have to be moved at a later date.

177.  The trials in Aberdeen and Burnley would have provided an ideal opportunity to begin this form of tracking, from assessment to employment outcomes. We believe it is regrettable that steps were not taken to ensure tracking was in place for this first cohort. However, we believe that it is not too late to do this and recommend that the Government begins tracking outcomes for the reassessment trial cohort without further delay.


195   Ev 78, para 122 Back

196   Ev w71, para 7 Back

197   "Grayling: initial reassessments of those on IB in Aberdeen and Burnley show large numbers of claimants with the potential to return to work", DWP Press Release, 10 February 2011. Back

198   Ev w71, para 9 Back

199   Q 218 Back

200   Q 219 Back

201   Q 322 Back

202   Q 332 Back

203   Ev w81, para 12 [Rhydian Fon James] Back

204   Q 329 Back

205   Q 330 Back

206   CPAG, Welfare benefits and tax credits handbook, 2011/2012 Back

207   Ev 78, para 126 Back

208   HC Deb, 28 April 2011, 534W. The answer explained that "The savings include reductions to expenditure on contributory ESA net of expected costs to income-related ESA and other DWP administered benefits and are measured against a baseline forecast of the contributory ESA expenditure without time limiting." Back

209   HC Deb, 3 May 2011, 722W. The answer explained that "Assessment Phase cases have been included as the legislation intends for them to be eligible for time-limiting if their duration on contributory ESA is 12 months or more. Figures have been rounded to the nearest 50,000 claimants and are based on Budget 2011 forecasts." Back

210   HC Deb 3 May 2011, cols 723-4w Back

211   Ev w31, para 23 Back

212   Ev 89 Back

213   Q 333 Back

214   Ev w19 Back

215   Ev w49 Back

216   Ev w100 [Susan Marsh] Back

217   Ev 85, para 33. Pathways to Work was a national back-to-work programme available to all incapacity benefit and ESA claimants. The programme ended in April 2011 and has been replaced by the Work Programme.  Back

218   Q 335 Back

219   HC Deb, 17 March 2011; Vol. 525, c. 572W Back

220   HC Deb, 26 April 2011; Vol. 527, c. 232W Back

221   DWP Impact Assessment, Time limit Contributory ESA to one year for those in the WRAG, February 2011

 Back

222   Ev w71 Back

223   Q 17 Back

224   Q 16 Back

225   Q 324 Back

226   Q 327 Back

227   DWP, Employment and Support Allowance: Findings from a follow-up survey with customers, Research Report No. 745, 2011, p 36 Back

228   Q 327 Back

229   Ev 90 Back

230   Ev 78, para 124 Back

231   Q 323 Back


 
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Prepared 26 July 2011