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Disability Living Allowance (DLA) is unique in the benefit system in that it provides non-means tested support for anyone who incurs additional living costs as a result of their long-term disability or health condition. The Government's plans to introduce a new benefit to replace DLA for working age claimants, the Personal Independence Payment (PIP), were based on HM Treasury's assumption, which drew on evidence from the Work Capability Assessment (WCA) for Employment and Support Allowance (ESA), that a new eligibility assessment would produce a saving of around 20% on the projected expenditure on the DLA budget for working-age claimants in 2015-16. This implies that some current DLA recipients will lose financial support and that the bar for new claimants will be set higher.
The necessity of identifying potential savings across Government in the current fiscal climate is acknowledged. However, HM Treasury's assumption that a 20% reduction in expenditure on this benefit could be achieved by 2015-16 is uncertain. Projections made by analogy to the process for reassessing incapacity benefit claimants under the WCA may be inaccurate. Demographic changes are a significant factor in the increase in DLA expenditure, particularly the growth in the number of people over state pension age who retain DLA. This will not be affected by the introduction of PIP which is intended only to apply to working-age DLA claimants.
There are a number of arguments for reforming DLA. It has become an increasingly complex benefit, evidenced by the large and growing amount of case law. The purpose of DLA is not always well understood by claimants and their advisers, the general public or the media. For example, it is frequently misunderstood to be an out-of-work benefit. Claiming DLA can be difficult and it is not always clear who will be eligible. There is not a consistent and clear system for reviewing DLA awards—evidence suggests that around 11% of DLA awards are overpaid due to unreported gradual changes in circumstances. However, it should also be borne in mind that a significant number of people who might be eligible for DLA do not currently claim it.
The Chancellor of the Exchequer's announcement of the intention to reform DLA made the Government's communications task a difficult one. It is unfortunate that a background of budget cuts has created unnecessarily high levels of anxiety about this reform amongst DLA recipients. Since then, DWP has taken steps to involve disabled people in the process for devising and implementing PIP and this has proved to be effective to some extent.
Much of the media coverage of DLA reform has been negative and has often conflated DLA with out-of-work benefits such as ESA. This helps to fuel negative perceptions of disabled people. While the Government cannot control the editorial line taken in the media, it should exercise extreme care in the way it engages with the media on disability benefits and take further steps to explain the reasons for the reform to the media and the public. In particular, a more responsible approach to explaining and providing context is required when the Government releases statistics about disability benefit claimants.
The Government's confirmation that it does not intend to adopt a "big bang" approach to implementation is welcome. It has announced its intention to limit new claims to a few thousand per month for the first few months and to confine implementation initially to one geographical area. The period prior to national roll-out should be used to learn the early lessons which emerge from this small-scale implementation and to make changes quickly where necessary.
As has been shown in the move from Incapacity Benefit to Employment and Support Allowance, reassessment of existing claimants is even more complex than assessing new claims. Reassessment of existing DLA claimants should only proceed once DWP is confident that the assessment process is accurate and working properly for new claims.
More reassessment of claims is necessary than has been the case with DLA. However, too frequent reassessment risks wasting public money and causing stress and anxiety to disabled people. The personal interview should play an important part in assessing many PIP claims but evidence from medical professionals expert in a particular condition and with a detailed and longstanding knowledge of the claimant should be given due weight in the assessment process. Once the initial assessments for PIP have been completed in the first geographical area, the Government should look again at the value of face-to-face assessments for PIP claims where claimants' conditions are severe and unlikely to change. These steps may help to avoid cases going to appeal, with the accompanying costs and delays.
Until very recently the information released by the Government included no estimate of the number of people likely to be affected by the reform. It is still not possible to ascertain, from the latest information released in January, from which DLA rate combinations the projected PIP caseload reduction of 500,000 claimants by 2015-16 (compared to projections for DLA) will come and therefore which current DLA recipients are likely to have their benefit withdrawn altogether. DWP should set out further case studies to show which claimants who currently qualify for working-age DLA will not be eligible for PIP and which will be eligible but at a lower rate. In future, major benefit reform proposals should be accompanied by detailed and comprehensive analysis of the likely impacts of reform as soon as practicable.
The PIP assessment criteria, as drafted, tend towards the "medical model" of disability. Significant improvements have been made in the second draft but the criteria will still assess people's impairments rather than the barriers to full participation in society which they face. As part of the formal consultation with disability representative organisations on the second draft of the criteria now under way, the Government should consider how activity descriptors could take account of the impact of such factors as housing and access to public transport. A further trial of the assessment criteria should be undertaken following the formal consultation now under way, and before they are laid down in Regulations.
After a difficult beginning, DWP deserves credit for the effort it has made to date to include disabled people and their organisations in the design process for PIP and for listening to some of their concerns. It dropped the proposals to end payment of the DLA mobility component for care home residents after the Low Review and to extend the three-month qualifying period under DLA to six months under PIP. It is important that the views of disabled people are fully recognised in the Government's further formal consultation on the revised criteria.
DWP must avoid repeating the well-documented and serious flaws in the original WCA system. The PIP assessment process needs to be empathetic, and avoid the mechanistic, tick-box approach adopted in the WCA in 2008. Private companies administering the assessment should be contractually obliged to adopt this more empathetic approach and to allocate sufficient time to allow for this in each assessment.
DWP appears to have learned lessons from the problems arising from the monopoly supplier arrangement for the WCA. The contracting arrangements for the PIP assessment seem likely to include a framework system which will allow for competition. A further lesson should be learned in terms of linking payment of public funds to private companies directly to performance. The PIP assessment contracts should stipulate that companies will only be paid for assessment reports that are "right first time" in the majority of cases. Tighter monitoring and regulation of private companies undertaking benefits assessment on behalf of DWP is required.
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