1 Introduction
Background
1. The introduction of Disability Living Allowance
(DLA) in 1992 was a policy response to well-established evidence
that disabled people and their families suffer greater disadvantage
and are more likely to suffer poverty than non-disabled people.[1]
It was designed to contribute towards the extra costs incurred
by disabled people in overcoming barriers to participation in
society. DLA replaced two existing benefits—Mobility Allowance
(MobA) and Attendance Allowance (AA)—for working-age claimants.[2]
2. DLA has a mobility component and a care component.
Mobility and care were chosen on the basis of research by the
Office of Population Censuses and Surveys, as the most appropriate
proxies to establish entitlement to the benefit. Measuring each
individual's actual extra costs was thought to be too administratively
complex and prohibitively expensive.[3]
The mobility component is paid at two different rates. The care
component is paid at three rates. Claimants are paid one or both
components, at the appropriate rate, depending on their needs.
This structure means there are 11 different "rate combinations".
The weekly amounts currently payable to recipients are set out
below:
| Care component |
lower rate | £19.55
|
| middle rate
| £49.30 |
| higher rate
| £73.60 |
| Mobility component
| lower rate | £19.55
|
| higher rate
| £51.40 |
3. There has been a considerable rise in the total number
of people, of all ages, receiving DLA and the cost of the benefit
to the Exchequer. There were 3.2 million people in receipt of
DLA as at February 2011 compared to 1.1 million people in 1992-93.
Total DLA expenditure rose from £3.2 billion in 1992-93 to
£12.3 billion in 2009-10 in real terms (2011-12 prices).[4]
The Government's proposals
4. In the June 2010 emergency Budget, the Chancellor of the
Exchequer announced that DLA would be reformed by the introduction
of a new assessment for eligibility. He said that the rationale
for reform was that "three times as many people claim it
today than when it was introduced 18 years ago, and the costs
have quadrupled in real terms to more than £11 billion a
year".[5] In the policy
costings document accompanying the June 2010 Budget, HM Treasury's
assumption was that a new eligibility assessment would result
in a 20% reduction in caseload and expenditure.[6]
The Chancellor said that the effect of reducing expenditure would
be to enable the benefit to be focused on "those with the
greatest needs". He also said the new assessment process
would be "simpler than the complex forms" used to apply
for DLA.[7] The reforms
announced in the Budget were planned to be brought in over three
years, beginning in 2013-14, with 25% of the existing caseload
reassessed in year one, a further 50% by the end of year two and
the remaining 25% by the end of the process in 2015-16.
5. The DWP's December 2010 Green Paper, Disability
Living Allowance reform, set out proposals to replace DLA,
for working-age claimants, with a new benefit—the
Personal Independence Payment (PIP). Before the consultation period
ended, the legislative framework for introducing PIP was included
in the current Welfare Reform Bill, which is reaching the end
of its parliamentary stages.
6. The Government has said that the proposed
new benefit will have the same purpose as DLA i.e. to "contribute
to the extra costs of overcoming the barriers faced by disabled
people to lead full and active lives".[8]
PIP will share several other similarities with DLA: it will not
be means-tested or taxable; payment will not depend on claimants
having made National Insurance contributions; it will be payable
regardless of employment status; and special rules will be maintained
for people who are terminally ill.
7. The Government does, though, propose some
major changes. It intends to focus support on those with the greatest
needs and/or barriers to participation and thereby reduce caseload
and expenditure. This would be achieved by revising the eligibility
criteria and introducing a new, "more objective" assessment
for eligibility, which for most people will mean a face-to-face
assessment with a healthcare professional. It also aims to make
the eligibility rules clearer and to simplify the new benefit
by having fewer "rate combinations". Other key changes
proposed include ending automatic entitlement for certain conditions
and impairments and regular review of all awards. The Government
also originally planned to extend the qualifying period from three
to six months but this proposal was withdrawn at Report stage
in the Lords on 17 January.[9]
Our inquiry
8. The proposal to replace working-age DLA with
a new benefit is controversial. Many disabled people and their
representative organisations have been vociferous in their opposition
to elements of the Government's plans, particularly the proposal
to reduce expenditure by focusing on "those with the greatest
needs".[10] As
we have taken the relatively unusual step of conducting our inquiry
while parliamentary scrutiny of the relevant Bill was under way,
we trust that the Government will take our conclusions and recommendations
into account in its formal consultation on the revised assessment
criteria announced in January and then in drafting the relevant
Regulations, which will set out the detailed structure and rules
for PIP.
9. We received 59 written submissions and held
three oral evidence sessions: with academics and benefits experts;
disability representative organisations; and Maria Miller MP,
the DWP Minister for Disabled People and DWP officials. A full
list of witnesses is set out at the end of this report.
10. We held an informal meeting in Parliament
with disabled people and their representatives to hear their views
on reform before the inquiry was launched. We also visited Aberavon
in Neath Port Talbot, south Wales to hear the concerns of people
who are likely to be directly affected. We would like to thank
everyone who contributed to the inquiry, particularly those who
took the time to attend our public meeting, which we found enormously
helpful.
Structure of this report
11. Chapter 2 looks at the existing objectives
for DLA and the changes the Government hopes to bring about through
the introduction of PIP. In Chapter 3 we assess the Government's
consultation and communications process for the reform. Chapter
4 examines the Government's performance to date in assessing the
likely impacts of the policy change. In Chapter 5 we analyse the
eligibility criteria and the new assessment for PIP. Chapter 6
assesses the proposals for implementation and contracting arrangements.
12. PIP is currently only intended to apply to
working-age DLA claimants and the Government has not yet made
clear its plans for any future changes relating to claimants under
16 years-old and those over the state pension age. This Report
therefore focuses on the working-age cohort of claimants. We may
return to look at DLA reform should the Government put forward
further proposals affecting these other groups of claimants.
1 See, for example, Department for Social Security,
The Way Ahead: Benefits for Disabled People, Cm 917, January
1990. Back
2
Welfare Reform Bill: reform of disability benefits, Housing
Benefit, and other measures, Research Paper 11/23, House of
Commons Library, March 2011. Back
3
Department for Work and Pensions, Disability Living Allowance
Reform, Cm 7984, December 2010, para 10. Back
4
Ev 96 Back
5
HC Deb 22 June 2010, col 173. Back
6
HM Treasury/HM Revenue & Customs, Budget 2010 Policy Costings,
June 2010, p 36. Back
7
HC Deb, 22 June 2010, col 173. Back
8
Department for Work and Pensions,, Disability Living Allowance
reform, December 2010, Cm 7984, p 11. Back
9
HL Deb, 17 January 2012, col 550. Back
10
See, for example, "New disability test 'will cut off lifelines'",
The Times, 9 July 2011, "We're not being listened
to", The Guardian, 13 July 2011 and Disability Rights
Partnership, End of a Lifeline? Ending Disability Living Allowance
to introduce Personal Independence Payment, DLA reform consultation
response, February 2011.
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