House of Commons - Government support towards the additional living costs of working-age disabled people

Government support towards the additional living costs of working-age disabled people - Work and Pensions Committee Contents

2 Policy objectives

13. The Government recognises that DLA helps disabled people to meet the extra costs they incur in participating in society. As we have noted, PIP will retain some of the valued features of DLA. In particular it will remain a non-means-tested, tax-free cash payment, paid regardless of employment status, which can be used as recipients choose towards extra costs incurred. However, the Government argues that DLA has key weaknesses and is "no longer in step" with disabled people's needs. Its intention is that the introduction of PIP should address: the complexity of DLA and the misunderstanding of its purpose; the lack of a sufficiently rigorous system of award reviews; and "unsustainable" rises in caseload and expenditure.[11] DWP also states that "A significant proportion of DLA recipients believe that DLA is an out-of-work benefit."[12] This chapter considers the objectives and current administration of DLA and examines the rationale for the Government's policy objectives for PIP.

DLA policy objectives

14. DLA was introduced because the combination of the two existing benefits— Attendance Allowance (AA) and Mobility Allowance (MobA)— was not considered to be meeting the extra costs incurred by some groups of working-age disabled people, particularly those with learning disabilities and the visually impaired. The 1990 White Paper, The Way Ahead: Benefits for Disabled People, had drawn on evidence from a wide-ranging survey of the circumstances of disabled people commissioned from the Office of Population Censuses and Surveys. This had found there were some people with moderate to severe disabilities who failed to qualify for either AA or MobA. The White Paper concluded that these people needed more support.[13]

15. Another major objective of DLA was to introduce self-assessment, to enable disabled people to describe the impacts of their disabilities rather than be subject to routine medical assessments (as had been the case with AA and MobA). These assessments had been criticised as inappropriate and "providing little more than a snapshot" of people's health conditions. Self-assessment was intended to be administratively simple and allow individuals to provide a fuller account of their personal circumstances.[14]

How DLA works

16. To qualify for the mobility component, claimants must have one or more of the following: walking difficulties caused by their disabilities; severe discomfort or risk of endangering health or life by making the effort to walk; no legs or feet; both 100% disabled because of loss of eyesight and not less than 80% disabled because of deafness; severely mentally impaired with severe behavioural problems; need guidance or supervision most of the time when outside in unfamiliar places; or certified as severely sight impaired. Claimants receive lower rate mobility component if they satisfy the criterion: "need guidance or supervision most of the time when outside in unfamiliar places". They are eligible for higher rate mobility component if they have one or more of the other, more severe, walking difficulties.

17. To qualify for the care component, claimants must have a disability severe enough for them to either: need help with things such as washing, dressing, eating, getting to and using the toilet, or communicating needs; need supervision to avoid putting themselves or others in substantial danger; need someone with them when on dialysis; or be unable to prepare a cooked main meal for themselves. Claimants qualify for the lowest rate if they need help for some of the day or are unable to prepare a cooked main meal. The middle rate is awarded to those who need help with personal care frequently or supervision continually throughout the day only, help with personal care or someone to watch over them during the night only, or someone with them while on dialysis. The highest rate is paid to those who need supervision frequently throughout the day and night.[15]

18. Claims for DLA are made by completing a 55-page application form. The form is accompanied by 16 pages of explanatory notes. The form asks 62 questions, including about: the claimant's illnesses and disabilities and the treatments or help they receive (10 questions); how well the claimant can get around outdoors (11 questions); care needs during the day (14 questions); care needs during the night (4 questions); time spent in hospitals and care homes (3 questions); and other benefits received (1 question). The form can be downloaded and printed from the Directgov website. Claimants also give details of their GP and any other doctor, nurse, therapist or social worker they have seen in the last 12 months. Claimants are encouraged to submit with their application form any assessment reports or care plans from professionals who have treated them.

19. Claims are then considered by Decision Makers (DMs) in the Pensions, Disability and Carers Service (PDCS) within DWP. DMs are guided by an "A-Z of medical conditions", which "contains background information on the more common medical conditions in DLA/AA claims, their treatment, the likely disabling effects together with the likely impact on ability to self care and get around".[16] If a claimant's description of the effects of their illness or disability does not match that outlined in the guidance, or if the guidance on the particular illness or disability advises the DM to seek further medical evidence, the DM will ask the claimant's GP to complete a "factual report".

THE ROLE OF FACE-TO-FACE ASSESSMENTS IN THE CURRENT CLAIM PROCESS

20. If the DM decides, after receipt of the factual report, that they still have insufficient information on which to base a decision, they can require the claimant to attend a medical examination carried out by Atos Healthcare.[17] The examination involves an interview and, if considered appropriate, a physical examination by an Atos Healthcare professional (HCP). The HCP writes up a report of the examination and returns it to the DM. The DM then makes a decision about the claim on the basis of the combined evidence from the application form, any additional information provided, such as a GP's factual report, and the report of the Atos assessment.

21. DWP recently released statistics on the use of evidence in decisions made on new DLA claims in 2010. The statistics indicate which piece of evidence DMs considered to be the main basis of their award decision:

6% were based on a face-to-face assessment;
16% were based on the claim form;
42% on a GP's report; and
36% on "other" paper-based sources of evidence.

"Other" evidence can include "phone calls to the claimant or their carer, the claimant's Personal Care Support Plan, information from a Social Worker, or from an Occupational Therapist, physiotherapist or other Allied Health Professional, information obtained as part of the claimant's application for Incapacity Benefit or Employment and Support Allowance, or information obtained from a Hospital report".[18]

THE REQUIRED PERIOD CONDITION AND LENGTH OF DLA AWARDS

22. DLA is not payable until the claimant has met the eligibility criteria for at least three months (the "qualifying period") and is expected to continue to meet the criteria for at least a further six months (the "prospective test"). These periods together make up a Required Period Condition of nine months and were introduced to focus DLA on "those people whose disabilities will have a considerable and continual impact on their lives".[19]

23. DLA can be awarded for life or for a fixed period. Claimants with fixed awards have to make a renewal claim shortly before the expiry of their existing award. Renewal claims are treated in exactly the same way as new claims.

PIP policy objectives

ADDRESSING MISUNDERSTANDINGS AND COMPLEXITY OF DLA

24. DWP's view is that DLA is not well understood: people are unclear about the purpose of the benefit and the entitlement criteria are insufficiently clear to ensure that people know whether or not they are likely to qualify. Qualitative research published by DWP in 2010 found a wide range of perceptions amongst recipients about the purpose of DLA. This depended to some extent on the advice they were given by DWP staff and external welfare rights advisers. Commonly held misperceptions included that DLA was "compensation for being disabled" and that DLA payments would be stopped if the recipient started work (discussed in more detail below).[20]

25. DWP also highlighted that there was a high level of "speculative claims" and that "a high proportion of claims are being made with little or no chance of succeeding".[21] The Minister's view was that this high disallowance rate suggested that many applicants knew little about DLA before they claimed and that many claims were "nugatory".[22] She argued that the disallowance rate of around 55% indicated that large numbers of people without a basic level of eligibility were applying because "there is such a vague notion of who is eligible for DLA that many will apply just to see whether they are eligible."[23] 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.[24]

26. Claudia Wood of Demos agreed with the Government that the high disallowance rate suggested that people did not have a clear understanding of whether they ought to be applying. Sue Royston of Citizen's Advice concurred.[25]

27. However, several witnesses took issue with this argument. Professor Roy Sainsbury, of the Social Policy Research Unit, University of York, pointed out that many claims which were initially disallowed were reconsidered or ultimately taken to appeal, where there was a 40% success rate.[26] Inclusion London suggested the reason for the high disallowance rate was that the DLA eligibility criteria are actually quite rigorous.[27] The Motor Neurone Disease Association (MNDA) and Citizens Advice Scotland both believed that DLA is well understood as a non means-tested, non-taxable cash benefit paid in recognition of the extra costs incurred by disabled people. Indeed, MNDA reported that it was the best understood benefit amongst its members.[28]

28. DWP has stated that DLA is complex to claim, with the application form coming in for particular criticism as being "long and overly repetitive".[29] Several witnesses agreed that the claim form was too long and complicated and needed to be simplified.[30] Creative Support felt the form was "extremely long" and reported that it left claimants feeling "confused, degraded and upset".[31] Macmillan Cancer Support stated that applicants found the claim form "lengthy, repetitive, ambiguous and irrelevant to their circumstances".[32] Citizens Advice Scotland noted that DLA is the single biggest issue dealt with in their bureaux, describing the process of claiming DLA as "a complex maze".[33] Essex Coalition of Disabled People (ECDP) described DLA as a benefit "shrouded in uncertainty" and Citizens Advice told us that helping clients to complete the claim form takes between two and four hours and involves detailed exploration of their daily lives and consideration of how their needs fit with definitions in current case law. It agreed that the complexity of DLA needed to be addressed.[34]

LACK OF A RIGOROUS SYSTEM OF AWARD REVIEWS

29. DLA may be awarded for a fixed period or indefinitely. DWP ad hoc analysis shows that of all DLA awards as at August 2010, 29% were for a fixed period and 71% were indefinite.[35] DWP referred to evidence from the 2004-05 National Benefit Review, which found that around £630 million was being overpaid (11% of cases) and around £190 million was being underpaid to claimants as a result of unreported changes in circumstances. It also noted that 24% of working age DLA claimants had either not had a change to their award, or their award looked at, for a decade.[36]

30. Professor Sainsbury acknowledged the scale of overpayments due to gradual changes in circumstances that went unreported. He pointed out that such cases are not included in the official figures for fraud and error as it would not have been reasonable to expect a claimant to have realised their circumstances had changed. Therefore, these cases are regarded as legally correct but are considered to be "technically incorrect".[37] His view was that the way to deal with this problem was through reassessment.[38] Professor Steve Fothergill of the Centre for Regional Economic and Social Research, Sheffield Hallam University, felt it was "hard to argue against the regular reassessment of DLA claims".[39]

31. Several witnesses agreed that a greater level of reassessment could be brought into the current DLA system. Professor Sainsbury did not believe there would be any "legal impediment" to DWP reassessing "the whole DLA caseload" if they chose.[40] Disability Alliance also took the view that reassessment of awards was already possible within the current system.[41]

32. However, the Minister told us that reform of DLA would have required amendments to primary legislation.[42] DWP's view was that reform of DLA within the existing legislative framework would just mean "bolting on" additions to "an outmoded system". It had decided to introduce a new benefit because this "presented an ideal opportunity to start afresh, keeping the best elements of DLA that disabled people value, but bringing the benefit into the 21st century." [43]

MISPERCEPTIONS OF DLA AS AN OUT-OF-WORK BENEFIT

33. As we have noted, there is evidence that some recipients of DLA perceive it as an out-of-work benefit. Professor Sainsbury told us that there was some evidence that DLA could act as a barrier to work but there was also some evidence to suggest the opposite effect—that DLA can help people to gain and retain employment.[44] This latter view was reinforced to us by DLA recipients who contributed to our public meeting in Neath Port Talbot.

34. Some witnesses suggested that successive governments had contributed to the misperception by conflating DLA with other disability-related benefits, particularly out-of-work benefits such as Incapacity Benefits (IB) and Employment and Support Allowance (ESA).[45] The Chancellor of the Exchequer, for example, stated in his Budget statement that DLA reform would enable the Government "to afford paying this important benefit to those with the greatest needs, while significantly improving incentives to work for others."[46] In her foreword to the December 2010 Green Paper, Maria Miller MP wrote:

Just as we are committed to providing unconditional support to those who are unable to work, we know that work is the best form of welfare for those who are able to do so. That's why I want as many disabled people as possible to benefit from employment—it is not acceptable for anyone to be trapped in a cycle of dependency.[47]

Inclusion London argued that the Government was seeking to "blur the public perception of DLA" by talking of breaking dependence on benefits and the advantages of employment in the context of DLA.[48] DWP's own qualitative research suggests that DLA may enable recipients to gain and retain employment.[49] Geoff Fimister of RNIB referred to his organisation's findings which suggested that, although it could not be quantified, DLA could be a powerful reinforcement to people's ability to take up and remain in work.[50]

35. Witnesses believed that much more could be done to improve communication of the message that DLA can be claimed both in and out of work. Paul Farmer of Mind felt that DWP's contact with IB claimants during the reassessment for ESA was an opportunity clearly to communicate the "very important message" that DLA would not be lost if the claimant gained employment. He also believed that providers in the Work Programme, the Government's contracted employment programme, could play a greater role in disseminating the message.[51]

36. DWP's Impact Assessment for PIP states that the new benefit will be "an opportunity to improve understanding of the benefit and communicate that support is available both in and out of work."[52] The Minister recognised that the media often conflate DLA with IB and ESA, which can "create some confusion". She told us the Government would work with disabled people and their representative organisations to ensure that the role of the new benefit is more clearly understood.[53]

ADDRESSING RISING CASELOAD AND EXPENDITURE

37. As we have noted, HM Treasury's response to the threefold increase in DLA caseload and the near quadrupling of expenditure since it was introduced was to announce in the June 2010 Budget the Government's intention to introduce a new benefit with a new assessment for eligibility. Its assumption, drawing on "evidence from the Work Capability Assessment" (WCA), was that a new assessment for eligibility would reduce caseload and expenditure by 20%.[54] The WCA is an assessment of eligibility for Employment and Support Allowance (ESA), the new out-of-work benefit for people with disabilities and health conditions, introduced in 2008.

38. Professor Sainsbury said he was "at a loss" as to where the 20% figure came from. He could not understand how the impact of the assessment on caseload could be predicted before any work had been done on the criteria and thresholds for the benefit. He could only understand the figure as a savings target.[55] Disability representative organisations also commented that the Government had not presented any robust evidence to support their assumption of a 20% reduction in caseload and expenditure. Scope believed that "this decision is based purely upon budgetary targets, rather than on robust evidence as to how the benefit is used and by whom".[56] The Government's position is that the 20% reduction is an assumption not a target. It also points out that "Due to forecast growth in working-age DLA expenditure, reducing working-age DLA expenditure by 20% in 2015/16 means returning working-age DLA expenditure to 2009/10 levels in real terms".[57]

39. Professor Fothergill pointed to previous problems with estimating the likely impact of new assessments for benefits, using the Government's own example of the WCA. In 2009 the Government predicted that 15% of Incapacity Benefit claimants would be found ineligible for ESA.[58] Official statistics show the actual figure in the reassessment trial was 32% (although it should be noted that this does not take account of the outcome of appeals).[59] His view was that this was a "salutary lesson" and that the 20% estimate for DLA savings "could turn out to be 40%".[60]

40. DWP referred to statistics on the rise in DLA caseload and expenditure from 2002-03 to 2010-11, published in July 2011. The headline figure from these statistics was a 29% increase in total DLA caseload (i.e. including children and over 65s as well as working-age claims) from just under 2.5 million in 2002-03 to around 3.2 million in 2010-11. DWP acknowledged that there were "several factors which could have increased the take-up of DLA", including "maturing" of the benefit as more people over the age of 65 retain their DLA, and greater awareness of the availability of the benefit. However, it also argued that lack of clarity in DLA criteria and inconsistency in award decisions had led to a large proportion of appeals and a growing amount of case law. This in turn had "widened the interpretation of the eligibility criteria for DLA by increasing the number of different factors that may be taken into account, making the benefit less targeted and available to far more people than originally intended."[61]

41. Witnesses objected to DWP's emphasis on the headline figure of 29% growth in total DLA caseload. As noted above, DWP's current reforms will apply only to working-age DLA claimants. The Disability Benefits Consortium and others argued that DWP's own statistics show that "growth of working age [DLA caseload] was closer to 16% once demographic changes and population growth were taken into account."[62]

42. We accept the argument that DLA requires reform. There is some evidence that the benefit has insufficiently clear criteria and is not always well understood. The complex claim form can also make it difficult for people to make a claim. We therefore support the Government's intention to address these issues.

43. There is not a proper system for reviewing DLA awards: 24% of working-age DLA claimants have either had no change in or no review of their award for over a decade. While official fraud and error levels are comparatively low, there is evidence that around 11% of awards may be overpaid due to changes so gradual over time that claimants could not be expected to report a change in circumstances. We accept that there needs to be an appropriate, consistent and clear system for reviewing awards.

44. Some witnesses believed that the necessary changes could have been made within the existing DLA structure. The Government's view is that this would have required changes to primary legislation and that there are advantages to a "fresh start". We agree that introducing a new benefit under a new legislative framework could offer the opportunity to improve support for disabled people while addressing the problems with DLA which the Government has identified. However, we believe the starting-point for reform should be to design a new benefit which meets its objectives in recognising the additional costs which disabled people incur. It is unfortunate that a background of budget cuts has created unnecessarily high levels of anxiety about this reform amongst DLA recipients.

45. We are also concerned that the Government is basing its assumptions for the scope for reducing working-age caseload on the fact that there was growth of 29% in total DLA expenditure between 2002-03 and 2010-11. It is important to bear in mind that a substantial part of this growth arises from demographic change, including the increase in the number of people over state pension age who retain their DLA. PIP will only apply to working-age claimants, where growth is closer to 16% after taking account of demographic changes. We would welcome clarification from the Government on how these statistics can be reconciled with the savings assumption, in response to this Report.

46. We explore the extent to which the design of PIP is likely to lead to a more effective benefit in the remainder of this report.

11 Department for Work and Pensions, Disability Living Allowance Reform, Cm 7984, December 2010. Back

12 Ibid, para 17. Back

13 Department for Social Security, The Way Ahead: Benefits for Disabled People, Cm 917, January 1990. Back

14 Social Security Committee, Fourth Report of Session 1997-98, Disability Living Allowance, HC 641, para 7. Back

15 Information from Directgov: www.direct.gov.uk Back

16 Available on the DWP website: http://www.dwp.gov.uk/publications/specialist-guides/medical-conditions/a-z-of-medical-conditions. This online guidance is gradually replacing the DSS/DWP publication, The Disability Handbook: A Handbook on the Care Needs and Mobility Requirements likely to arise from various Disabilities and Chronic Illnesses-a 275 page guide last updated in November 1991, ahead of the introduction of DLA in 1992. Back

17 Disability Living Allowance reform, SN/SP/5869, House of Commons Library, February 2011. Back

18 Department for Work and Pensions, DLA Award Values and Evidence Use for New Claims in 2010, in Great Britain, November 2011, p 5. Back

19 Disability Living Allowance reform, SN/SP/5869, House of Commons Library, February 2011, p 7. Back

20 Department for Work and Pensions, Disability Living Allowance and work: Exploratory research and evidence review, RP 648, 2010, p 47. Back

21 Ev 96 and Department for Work and Pensions, Disability Living Allowance Reform, Cm 7984, December 2010, para 16. Back