Work & Pensions CommitteeWritten evidence submitted by the Department for Work and Pensions

Introduction

1. The Government is committed to supporting disabled people to exercise choice and control and lead independent lives and recognises that disabled people face extra costs in so doing. Disability Living Allowance (DLA) helps to deliver on this commitment. However, there has been a growing consensus from across the political spectrum and from disability representative organisations that this benefit is no longer in step with the needs of disabled people, and that it is not sustainable over the long-term.

2. The Government announced in the June 2010 Budget that it would reform DLA to help those facing the greatest barriers to living independent lives, while making sure that the benefit remains affordable and sustainable.

3. On 6 December 2010, the Government published the consultation document, Disability Living Allowance reform, and began a formal consultation on proposals to replace DLA with a new benefit called Personal Independence Payment. The document set out the need to reform DLA and asked for views to inform the policy for the new benefit and the introduction of a more objective assessment.

4. The Government understands the value and importance of involving disabled people and their representatives in the reforms by providing a genuine opportunity to influence decisions. Since the Budget announcement, Ministers and officials have met with disabled people, their families and disability organisations, at both a national and local-level, to seek input to the reform proposals. The Department has also set up an Implementation Development Group specifically for customer representatives to contribute to the design and development of the operational processes needed to deliver the new benefit. Throughout the process the Department has worked together with the Office for Disability Issues to identify how grass-roots disabled people’s user-led organisations can be involved in the implementation design and development work. This work is ongoing and remains an integral part of the design and development of Personal Independence Payment.

5. The formal consultation period closed on 18 February 2011. The Department received more than 5,500 responses to the consultation, including nearly 5,000 from individuals. Around half of responses from individuals were standard responses, and more than 500 responses from organisations.

6. The Government published its response to the consultation on 4 April 2011. This outlined the responses received and provided further information about the reforms. The Government confirmed that Personal Independence Payment would be introduced for people of working age (aged 16-64) for both new and existing claims from 2013, and reaffirmed their commitment that it would remain a non-contributory, non-means-tested cash benefit to contribute to the extra costs of disability.

7. On 9 May 2011 the Department published initial draft regulations for the Personal Independence Payment assessment criteria to inform consideration of the Welfare Reform Bill. An explanatory technical note accompanied the draft criteria which outlined plans for refinement and testing to inform the policy on which the Department has asked for feedback through an informal consultation. The Department also published a series of policy briefing documents, which set out key elements of the policy proposals relating to the reform of DLA and the design and administration of Personal Independence Payment. These included briefing notes, for example, on the operational approach and award durations.

8. The high-level legislative framework underpinning Personal Independence Payment is set out in the Welfare Reform Bill which is currently before Parliament. The Government’s intention is that the detailed requirements for the new benefit will be set out in secondary legislation and that responses to the DLA reform consultation and the informal consultation on the assessment, along with continued engagement with disabled people and disability organisations, will be used to inform the detailed design.

9. The policy, including the draft assessment criteria, is continuing to be developed through testing as well as current and planned consultation with disabled people and their representatives. The Government acknowledges that there is still a great deal of work to do to ensure the reforms work as intended. This is an iterative process and some of the detailed proposals and delivery processes will continue to evolve during the period of the Committee’s inquiry.

10. The Government has already acted on feedback received both during and following the consultation and has made changes to the original policy:

Following responses to the DLA reform consultation, the Government announced that Personal Independence Payment will not be extended to new or existing claims for children from 2013/14 and the Government has committed to consult before extending Personal Independence Payment to children.

The DLA mobility component will not be removed from people in residential care in 2012. The Government will consider the needs of people living in residential care at the same time as all other DLA recipients as it develops Personal Independence Payment for introduction in 2013.

As well as learning from the Harrington review of the Work Capability Assessment, the Government has committed to a review of the operation of the new assessment, reporting within three years of the primary legislation coming into force.

11. The Department will ensure that the Committee is kept informed of developments and made aware of further publications during the course of its inquiry.

The Need for Disability Living Allowance Reform

12. Disability Living Allowance was introduced in 1992 and has not been fundamentally reviewed or reformed since. The caseload increases have exceeded projections and there is confusion about the purpose of the benefit. DLA is a complex benefit to claim and administer and there is no systematic way of checking that awards remain correct.

13. The main reasons underpinning the Government’s reform of DLA are that:

the public, claimants, and in some cases their advisers, do not understand what the benefit is for—many perceive it as compensation for being disabled, linked to being out of work or poor;

the current assessment process means awards can be inconsistent and lack credibility amongst disabled people themselves. This results in a large number of complaints and appeals and a large body of case law has developed, which can be difficult to interpret;

the system lacks consistency in the way it supports disabled people with similar needs, and decision making on awarding the benefit can be subjective;

people’s conditions can change over time—however, there is no systematic or straightforward way of reviewing people’s entitlement to DLA on a regular basis to ensure that they receive the right level of benefit. More than 70% of the current DLA caseload has an indefinite award; and

there is a need to get expenditure on a sustainable footing; over the last decade spending on DLA has risen dramatically. In just eight years the number claiming the benefit has risen from around 2.5 million to nearly 3.2 million—an increase of nearly 30% (February 2011). The total amount spent on the benefit this year is forecast to be £12.6 billion. This is significantly higher than envisaged.

14. Reform of DLA is part of the Government’s wider objectives to build a welfare system based on the principles of fairness and responsibility, which protects the most disadvantaged, and is financially sustainable.

15. The policy objectives that underpin the introduction of Personal Independence Payment are to:

retain the main features of DLA that disabled people value—for example, Personal Independence Payment will be a non-means tested and non-taxable cash benefit for people to spend as they choose, and it will be available to people both in and out of work;

create a new benefit that is more dynamic and responsive to changes in individual needs;

target support on disabled people who face the greatest barriers to leading full and active lives;

assess entitlement in a manner that is fairer, more transparent, more objective and more consistent than the current DLA processes; and

make the new benefit simpler to administer, easier to understand and more transparent.

DLA: How well it is understood

16. The Department has conducted thorough research and analysis into the views of DLA claimants. Disabled people and their representatives have reported that the current system is complicated and the claim form is long, and overly repetitive. Claimants are unclear about whether or not they are likely to qualify and there is evidence that people awarded DLA do not fully understand the purpose of the benefit. For example, some view the benefit as a form of compensation for being disabled, while others do not in fact view themselves as disabled.

17. A significant number of claimants believed that DLA was only for people who are out of work and that starting work would lead to a review and subsequent loss of benefit. This suggests that DLA can act as a barrier to work instead of enabling people to live independent and active lives—a key aim of Personal Independence Payment.

18. The current assessment process for DLA consists of a claim form completed by the individual, which is considered by a Decision Maker in the Department. This process is based on unclear criteria and often does not make the best use of the evidence that is available. Consequently awards can be subjective and inconsistent; meaning that the benefit is not well targeted on those who need it most.

19. Independent research published by the Department in 2008 showed that there was an overall disallowance rate for DLA of 52%. This level of disallowances suggests that a high proportion of claims are being made that have very little chance of succeeding. The research shows that most applicants knew little or nothing about DLA before making their application and that there were a high proportion of speculative claims. Disallowances included cases where applicants had either failed to meet basic eligibility criteria, or had failed to show they had the care and mobility needs that would entitle them to the benefit. More recent Departmental analysis shows that the proportion of disallowed DLA claims remains at around 50%.

Why the DLA caseload and expenditure has increased

20. The total caseload on DLA, including children and those aged over 65 has increased from 1.1 million in 1992–93 to 3.2 million in 2010–11. Expenditure has increased from £3.2 billion to £12.3 billion (2011–12 prices) during the same period. In just eight years the numbers of people receiving DLA has increased by around 30% (August 2010).

21. Overall, growth in DLA has been driven partly by the age entitlement rules, with the benefit maturing as more and more individuals retain their DLA claim beyond the age of 65. The growth in pensioners receiving DLA is largely driven by the fact that claims for DLA have to be made before age 65. This means that each year the maximum age at which it is possible to receive DLA increases by one year. However, some of this growth in over 65s is due to the widening of the eligibility criteria when the claims were made. There has also been a significant growth in the DLA caseload for children which cannot be attributed to demography.

22. Working age (16-64) expenditure has risen from £2 billion in 1992 to £6.7 billion in 2010-11 (2011-12 prices). Growth is driven partly by demographics but also by increases in the per capita rate. There are several factors which could have increased the take-up of DLA. For example, as the benefit has aged it is likely that knowledge of DLA as a benefit for disabled people has increased.

23. Over time a large amount of case law has grown up around the benefit. This has 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, and resulting in inconsistent awards.

24. The complexity and subjectivity of benefit decisions has led to a broader interpretation of the legislation and this has been exacerbated by a heavier reliance on self-reporting and indefinite benefit awards than originally intended. The introduction of the lowest rate of the care component in 1992 for example was estimated to help 140,000 people; however, today there are 890,000 people in receipt of lowest-rate care.

The effectiveness of the decision-making and review process for DLA

25. The Pensions, Disability and Carers Service (PDCS) are responsible for the administration and payment of DLA. Staff handle around 450,000 new claims, over 250,000 renewal claims and around 300,000 reviews, reconsiderations and supersessions every year.

26. Current practices can leave recipients of DLA on the benefit for years at a time without checking whether they are still entitled or should have their rate of benefit adjusted. For example, the 2004–05 National Benefit Review found that around £630 million was being overpaid and around £190 million was being underpaid to claimants as a result of unreported changes in circumstances. 24% of working age (16–64) DLA claimants have either not had a change to their award, or their award looked at, for a decade.

27. In order to create greater fairness, Personal Independence Payment will have a more objective assessment, usually via face-to-face consultations, and with a more regular intervention strategy to ensure that the decision making process is, and remains, as robust, consistent and fair as possible.

Appeals

28. A lack of understanding of the benefit and unclear criteria that can result in inconsistent awards, is a contributing factor to a large number of appeals. In 2009–10, 214,000 people were awarded DLA as a new claim, 267,000 people were disallowed and 36,000 appeals were submitted, of which 14,000 (39%) were overturned.

29. It is concerning that the main reason given by tribunal panels for overturning the original decision is that new evidence was presented. According to a Report by the President of the Social Entitlement Chamber, 72% of the DLA/Attendance Allowance decisions overturned at tribunal, are overturned due to additional evidence being provided.

30. The Department wants to work with disabled people to ensure that the right evidence is collected during the claim stage, in order to allow the Decision Maker to make an informed decision. The Department will consider ways of improving contact between the claimant and Decision Maker, particularly during the new mandatory reconsideration process proposed in the Welfare Reform Bill, so that the Department understand why claimants feel their original decision may be incorrect, handle appropriately and provide a more detailed explanation of the reasons the decision has been reached. The increased engagement and mandatory reconsideration will give the Department an opportunity to correct errors in decisions, something that does not always happen under the current process.

Why not improve the existing system?

31. Reform of the welfare system has traditionally been piecemeal, resulting in a confusing array of additions and exceptions bolted on to an outmoded system. The systems behind DLA are similarly outdated. The IT system is extremely basic, claims involve a large amount of paper and administrative processes are labour intensive. These reforms 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.

32. The name of the new benefit is intended to better reflect its purpose and to move away from a system that awards entitlement for certain conditions to a benefit that treats each application individually and reflects our commitment to support disabled people and enabling them to lead full and active independent lives.

Importance of Getting Money to the Right People

33. In designing Personal Independence Payment, the Government has been mindful of the current fiscal position, and the need to ensure the benefit remains sustainable in the long term. The Government expects that the changes will result in projected working-age expenditure in 2015–16 being 20% lower than it would be without the reform of Disability Living Allowance, containing projected expenditure in 2015–16 to 2009–10 levels. Even following the introduction of Personal Independence Payment, it is likely that there will continue to be some increase in expenditure due to demographic and other factors, such as an ageing population.

34. The effect on the working-age (16-64) DLA caseload cannot be quantified at this stage as the draft assessment criteria for Personal Independence Payment are still being tested. Reducing expenditure by 20% does not equate to a reduction in awards of 20%; it may be more or less depending on the impact of the assessment on rate combinations. Some might receive a higher award on one component and a lower award on the other component. More detail on the impact on the caseload will be provided once further work to develop and test the assessment criteria is complete.

35. A clear objective of the reforms is to simplify the benefit. One way in which the Government hopes to achieve this is through changing the overall structure of the benefit. The intention is that Personal Independence Payment will have two components: the Daily Living and Mobility components and that each will have two rates—standard and enhanced. This will reduce the current eleven different rate combinations to eight. This will make Personal Independence Payment simpler to administer and easier for everyone to understand, while continuing to reflect the range of individual needs.

36. These structural changes will also remove areas of overlap in the current system between the lower rate mobility component and the care component. At present, the higher and lower rates of the DLA mobility component are based on different criteria. With the exception of some automatic entitlements, higher rate mobility is generally awarded for physical health conditions or impairments, whereas lower rate mobility is linked to the need for supervision or guidance when outdoors. This means that there is some overlap between the lower rate mobility and the care component, as the care component is largely based on the need for supervision or attention. In the new assessment, there will be separate criteria for each component, based on an individual’s ability to carry out certain everyday activities. These criteria will determine entitlement to both the standard and enhanced rates of the component, depending on the cumulative impact of an individual’s health condition(s) or impairment(s).

37. There has been some concern that, as a result of structural changes, individuals currently in receipt of the lowest rate of the DLA care component will not be eligible for Personal Independence Payment. This is simply speculation. Entitlement to Personal Independence Payment will be based on an assessment of the impact of an individual’s health condition or impairment on their ability to carry out everyday activities. It is, therefore, not possible to say whether individuals in receipt of a particular rate of DLA will or will not be eligible for Personal Independence Payment; it will depend on their individual circumstances. At this stage it is too early to make any evidence-based assessment of the impact of the reforms on the existing DLA caseload. There will be more detail on the likely impact of the assessment in the autumn following completion of the testing of the initial draft of the criteria and analysis of the results.

The Extent to which Overlaps in Funding Exist

Duplication of Provision in Hospitals, Care Homes and Prisons

38. Disability Living Allowance provides an important cash contribution towards the disability-related extra costs of those disabled people who have the most complex support needs. Avoiding overlaps in funding and thereby ensuring the tax payer does not pay twice for the same need is a fundamental principle of Government.

39. The primary intention of the DLA hospital and care home rules is to prevent the duplication of provision that would otherwise arise if disability-related extra costs benefits were paid at the same time as those costs were being met from public funds.

40. Currently, where a person is maintained free of charge while undergoing medical or other treatment as an in-patient in a hospital or similar institution, payment of the care and mobility components of DLA stops after 28 days. This is because the NHS is responsible for meeting all of the disabled person’s disability related needs. Children in hospitals are afforded a longer period—84 days—as it is acknowledged that they require a longer transitional period to settle in, including greater contact with and support from their parents.

41. For residents of care homes payment of the DLA care component stops after 28 days because the Local Authority is responsible for meeting those needs in full.

42. Continued payment of the benefit in the circumstances described above is made to help someone meet any outstanding disability-related costs and to avoid a break in the claim during short periods of hospitalisation or respite care. Individuals who are affected by these rules retain an underlying entitlement to the benefit, which will be reinstated when they leave the care home or hospital and continue to satisfy eligibility conditions.

43. Disabled people who pay for all care home costs themselves or who are full private patients in hospital would continue to be paid any DLA they are entitled to as there is no double provision of funds.

44. The Government believes there is a principled case that, to avoid duplication of provision, payment of benefit should cease when someone is placed in legal custody in any circumstances. This also applies in the case of prisoners who have all of their disability-related needs met by either the prison itself or through healthcare provided by the Primary Care Trust.

45. There have been some suggestions that the reform of DLA will increase the burden on the NHS and Local Authorities, as individuals who are ineligible for Personal Independence Payment seek other sources of support. Access to support services through the NHS and Local Authorities is not dependent on receipt of DLA. The Government expects individuals who require these services to be accessing them already and therefore does not believe these reforms will have an adverse impact on the NHS or Local Authorities.

46. Disability benefits are only one part of the package of support available to disabled people. For example, the Government has already demonstrated its continued commitment to the Work Choice employment programme, the Disabled Facilities Grant and the Supporting People programme, all of which provide alternative sources of support.

Disability Living Allowance Mobility Component in Residential Care

47. The Spending Review included a measure, which would have meant that the mobility component of Disability Living Allowance would cease to be paid to all state funded residents in care homes after 28 days from October 2012.

48. A great deal of concern has been expressed about this proposal and as a result the Government has given a commitment that it will not remove the DLA mobility component from people in residential care in 2012. It will consider the needs of people living in residential care at the same time as all other DLA recipients as it develops Personal Independence Payment for introduction in 2013.

49. The Government will ensure that when it introduces Personal Independence Payment from April 2013 it treats disabled people fairly, regardless of their place of residence; and does not reduce disabled people’s ability to get out and about.

50. Officials in the Department for Work and Pensions are considering existing evidence and gathering more to determine the extent to which there are overlaps in provision for mobility needs of people in residential care homes. This work should be completed soon and the Government will then make a final decision on the way forward. What is important is that disabled people are able to get out and about and live independently.

Automatic Entitlement and Award Duration

Automatic entitlement

51. The Government recognises that people lead varied and often complex lives, with differing circumstances and needs, and that health conditions and impairments can affect people in very different ways. The Government does not think it right that people should be judged purely on the type of impairment they have, labelling them on this basis and making blanket decisions about benefit entitlement. Such an approach can lead to individuals receiving levels of support that may not reflect their needs. The intention is that Personal Independence Payment should provide support tailored to an individual’s personal circumstances.

52. Disability Living Allowance currently provides automatic entitlement for individuals with severe mental impairment or who are double amputees, deaf/blind, severely visually impaired, those undergoing haemodialysis and those claiming through Special Rules. While in some cases it might not be necessary to see people at a face-to-face consultation, in many cases it might be the only way to properly assess their needs. There is a need to consider people on a case-by-case basis.

53. The Government’s intention is, therefore, that there will be no automatic entitlement within Personal Independence Payment based on someone’s condition, diagnosis or treatment plan. Special Rules for individuals who are terminally ill will, however, remain, providing a fast track service to the enhanced rate of the daily living component, and removing the requirement for them to undergo assessment for their daily living needs or meet the Required Period Condition. The proposal is instead that everybody claiming Personal Independence Payment will undergo an assessment by a trained health professional to help determine whether they should receive the benefit and the components and rates payable. This assessment will treat people as individuals, considering the impact of their health condition or impairment on their everyday lives, rather than basing entitlement on their medical condition.

54. The Government believes that an important part of the Personal Independence Payment assessment process for most individuals should be a face-to-face consultation with the assessor. This will allow an in-depth look at the individual’s circumstances and give them the opportunity to put across their own views of the impact of their impairment on their everyday lives. This may also provide the opportunity to signpost individuals to other forms of support or advice available of which they may not be aware.

55. While most people will have a face-to-face consultation, the Government does not believe that this will be necessary in all cases. For example, where there is already sufficient evidence available to strongly support a decision on benefit entitlement, requiring individuals to attend a consultation may be unnecessary. In these circumstances, making an assessment based on paper evidence might be more appropriate. The Government believes, however, that such decisions on whether a face-to-face consultation is necessary, should be made on a case-by-case basis, considering the available evidence, not on the basis of the health condition or impairment individuals have.

56. Assessments will be delivered by a third party contracted to the Department and commercial activity is scheduled to begin shortly.

Award durations

57. The individualised approach the Government is proposing in Personal Independence Payment also applies to award durations. It is important to recognise that individuals’ circumstances and the impact of health conditions and impairments can change over time. The length of awards of Personal Independence Payment should reflect this, making the benefit more responsive to changing needs than DLA. Seventy per cent of current DLA awards are for an indefinite period, while around 130,000 people who were transferred to DLA from predecessor benefits in 1992 have never had their awards changed. Not reviewing these claims means that some people whose needs may have changed might not be getting the support they need.

58. The 2004-05 National Benefit Review of Disability Living Allowance identified that there were a number of people in receipt of DLA who were receiving an incorrect award. Although only a small proportion of this was due to fraud or official error, the review identified that £630 million (or 11.2% of cases) was overpaid because of these changes in claimants’ circumstances. It also found that £190 million (or 6.3% of cases) was underpaid to individuals for the same reason. This was not classified as fraud: the individuals’ circumstances had changed so gradually that they could not be expected to have known they needed to report a change.

59. For Personal Independence Payment, awards will generally be for a fixed period, with the length of the award based on the likelihood of an individual’s circumstances changing. Some awards will continue to be made on an ongoing basis, without a fixed end date, where appropriate—for example, if an individual has a severe and degenerative condition. In deciding whether a fixed-term award would be inappropriate, a Decision Maker must have regard to guidance issued by the Secretary of State. The Government believes that decisions on award length should be based on individual circumstances and not be based upon the type of health condition or impairment people have, as these can vary in their severity and impact. Meanwhile, individuals may adapt to their circumstances and overcome barriers that prevent participation or lead to higher costs. Guidance regarding award durations will be made available to assessors and Decision Makers and be informed by medical expertise.

60. The Department will also periodically review both ongoing and fixed-term awards to ensure that no change of circumstance has occurred which could affect entitlement or the rate of benefit currently in payment. This approach will ensure that individuals continue to receive the right support from Personal Independence Payment.

A Six Month Qualifying Period

61. The Government’s priority is to target support on those individuals with long-term health conditions or impairments so that they can lead full, active and independent lives. A required period condition of 12 months with a six month qualifying period and six month prospective test will help to achieve this aim.

62. The principal aim of extending the qualifying period from three to six months is to align the definition of long term disability with the Equality Act 2010. The Government does not expect this measure to provide any significant savings. As now, most people will not have to wait six months before being paid Personal Independence Payment if some or all of the qualifying period has been satisfied by the time they submit their claim. For example, if someone submits their claim for Personal Independence Payment three months after they would have satisfied the entitlement conditions they may become entitled three months after the claim was made.

63. People who are classified as terminally ill (who are expected to die within the next six months) will not have to serve a required period condition. This will allow for financial support to those in the most difficult circumstances to start as quickly as possible by exempting them from the qualifying period and prospective test.

64. The Government is also proposing that disabled people who have a fluctuating condition, which may result in a short break of entitlement to Personal Independence Payment, will not have to fulfil another qualifying period if they reclaim the benefit as a result of deterioration in their condition, within 12 months.

65. The six month qualifying period is not intended to deny disabled people financial help in the short term. For those in lower income groups, particularly those with little or no connection to the labour market, that help currently comes from mainly, but not exclusively, means-tested benefits. Personal Independence Payment will be a valuable, universal benefit. It is only right that the Government balance the needs of those who can be expected to meet additional costs in the short term with those who cannot.

The Extent to which Personal Independence Payment will act as a Gateway to Other Benefits

Carer’s Allowance

66. The highest and middle rate of the care component of Disability Living Allowance currently provide access to Carer’s Allowance, once they are caring for someone over 35 hours a week. The Government recognises the importance that carers and those they care for place on this gateway to Carer’s Allowance.

67. The Government acknowledges that receipt of Personal Independence Payment remains the least complex and most cost effective gateway to Carer’s Allowance, and so it will act as a condition of entitlement for Carer’s Allowance as DLA currently does.

68. While Personal Independence Payment will provide a gateway for receipt of Carer’s Allowance, the Government is not able to confirm, at this stage, which rate(s) of the daily living component of Personal Independence Payment will be used for this gateway. It is only when the Department has fully developed and tested the new assessment that the decision can be made.

69. The work to develop the detailed criteria for the assessment is ongoing with formal testing of the assessment having taken place over the summer. Robust modelling of the implications of using the standard and/or the enhanced rate of Personal Independence Payment for the gateway to Carer’s Allowance will be linked to this testing and the results of which should better enable the Government to decide which rate(s) should be used to determine Carer’s Allowance eligibility.

The Motability Scheme

70. The Motability scheme enables disabled people with the most complex support needs in receipt of the higher rate mobility component of DLA or War Pensioners Mobility supplement to lease or buy a car, powered wheelchair or scooter in exchange for some or all of their benefit.

71. Motability have confirmed that they want the mobility component of Personal Independence Payment to act as a passport to the scheme. Discussions are still underway to determine the precise rate that will provide access to the Motability scheme. The Department will continue to work closely with Motability, who remain committed to helping those disabled people who face the greatest barriers to independent living, and aim to finalise details in the autumn.

Blue Badge and other, non-DWP passports

72. DLA currently acts as a passport to a wide range of additional support provided by other government departments, the Devolved Administrations, Local Authorities and other national or local providers. Some of these passports have statutory links, such as to the Blue Badge (Disabled Persons Parking) scheme or to Energy Efficiency Grants, whilst others are covered by statutory guidance, such as concessionary travel, or voluntary arrangements only, for example free cinema tickets for a carer.

73. In most instances the link through to receipt of DLA, whether by reference to the benefit generally or to a particular component and/or rate, is for administrative simplicity and efficiency: receipt of DLA acting as a straightforward method to identify disabled people without having to assess them twice and administrators having to pay for a duplicate assessment. For example, over 850,000 disabled people currently benefit from the automatic link between the Higher Rate Mobility Component of DLA and award of a Blue Badge.

74. The Department will ensure that external bodies and other government departments are aware of the introduction of Personal Independence Payment from 2013 so they can amend their systems and information accordingly. The Department wants to ensure that, as now, people with the greatest barriers to participation are able to access other services and support as easily as possible and appropriate passporting links are able to be maintained.

75. The intention is that individuals will receive an award letter, as now, which would continue to act as confirmation that they were in receipt of particular component(s) of Personal Independence Payment at a particular rate. The Department will continue to work with colleagues across government, the Devolved Administrations and Local Authorities to identify further opportunities for streamlining this process and where possible maximising efficiencies through effective use of IT and business processes.

Design of the Assessment

The Disability Living Allowance Assessment Process

76. As society changes and our knowledge and understanding of barriers to participation develop it is essential that an assessment for disability benefit keeps pace. However, this has been particularly difficult to achieve in Disability Living Allowance as the majority of the entitlement criteria are enshrined in primary legislation—Social Security Contributions and Benefits Act 1992. This has made it very difficult to revise the benefit in a timely way as seen most recently whilst extending the Higher Rate Mobility Component to severely visually impaired people. Such an approach to policy maintenance must be revised.

77. The current assessment also comes under criticism regarding its treatment of claimants with mental health conditions. The structure of DLA means that only certain conditions or impairments can receive certain rates of the benefit. For example, high rate mobility is only available to those individuals who are physically unable to walk not to those with mental health conditions. Such an approach has led claimants with non-physical impairments, to suggest that they feel “second class” to those with physical impairments. As stated, the criteria are also very subjective and have become widened over time by a number of case law judgments allowing the original intentions on the benefit to be lost in time.

78. Apart from the impact of the legal framework of DLA, the current assessment process itself is confusing, inconsistent and anachronistic. DLA is largely self-assessed through the completion of a lengthy self-assessment paper claim form; additional medical evidence is only gathered in around half of all cases; the administrative processes are largely paper-based, resulting in high administrative costs; and, inconsistent decision making due to the subjective nature of the criteria leads to different awards being made resulting in a high volumes of appeals—which again leads to greater administrative costs.

Approach to the assessment

79. The purpose of the new assessment for Personal Independence Payment is to allow the Department to determine entitlement to the benefit in a more accurate, objective and consistent way than happens in DLA, ensuring that the benefit is focused on those with the greatest need.

80. The Department firstly considered whether it would be possible to assess the actual costs incurred by disabled people. However, the available evidence shows that there is a lack of consensus on what these costs are and how they can be calculated—for example, how you can disaggregate disability-related costs from other everyday costs. The Department therefore felt that developing an assessment based on actual costs would provide subjective and inconsistent outcomes which do not align with the aims of Personal Independence Payment. Such an approach would also likely require lengthy and intrusive assessments, which would be complex and expensive to deliver.

81. The alternative to assessing actual costs incurred is to use a proxy for these costs or the impact of disability more widely. Such an approach is used in DLA, which uses care and mobility needs as the proxy, giving priority to those with the greatest needs. While the Government recognises that care and mobility needs are key factors affecting both extra costs incurred and the impact of a health condition or impairment on people’s everyday lives, it feels that these are currently narrowly defined and exclude important issues such as communication. It was felt that the assessment for Personal Independence Payment should keep a strong focus on care and mobility, and that it was important that it reflected wider factors and a more modern consideration of the impact of a health condition or impairment.

82. Consideration was also given to whether there is opportunity to build on assessments used in other countries or existing methods of measuring disability, such as the International Classification of Functioning developed by the World Health Organization. Whilst this was helpful to the development work, it did not identify anything which, unaltered, would be appropriate for Personal Independence Payment.

83. Having considered all the options, the Department felt that the best approach would be to develop a set of tailored assessment criteria to act as a proxy for the impact of disablement on individuals and the extra costs this brings. The Department has decided that this proxy should be an individual’s ability to participate in everyday life, with priority in the benefit going to those least able to do so.

Assessment criteria

84. It was decided to measure the ability to participate by assessing individuals’ ability to carry out key everyday activities. It would not be practical for the assessment to take account of the impact of health conditions or impairments on all everyday activities, nor to seek to include all possible areas where extra costs may be generated. This would lead to over-complexity and be challenging for consistency, administration and the time needed for assessments. As such the Department and Assessment Development Group have sought to identify a series of key activities that are fundamental to participation in everyday life and which can cumulatively act as a proxy, identifying those individuals who are likely to have the highest level of need.

85. The following eleven key activities were chosen, each relating to one of the two components of Personal Independence Payment:

Daily Living component:

Planning and buying food and drink.

Preparing and cooking food.

Taking nutrition.

Managing medication and monitoring health conditions.

Managing prescribed therapies other than medication.

Washing, bathing and grooming.

Managing toilet needs or incontinence.

Dressing and undressing.

Communicating with others.

Mobility Component:

Planning and following a journey.

Moving around.

86. These activities have been chosen to provide a more holistic assessment of the impact of disability that the current DLA criteria, taking fairer account of the full range of impairment types, including physical, sensory, mental, intellectual and cognitive impairments. For example, the introduction of communication is a significant departure from DLA and one which will ensure better account is taken of the effect of impairments of hearing, speech and language comprehension.

87. An initial draft of the assessment criteria was published on 9 May 2011, in the form of draft regulations and a supporting technical note. Draft point scores have not yet been included in the draft regulations but will feature in the next draft of the assessment criteria due to be published.

Fluctuating conditions

88. The Government recognises that it is essential that the assessment for Personal Independence Payment deals effectively with variable and fluctuating conditions.

89. The assessment will not be a “snapshot” of any one day but will consider an individual’s ability to carry out activities over a period of time, enabling the assessment to capture a reliable picture of how a condition actually affects the individual. The Department’s current thinking is that decisions should be made having considered the impact of impairments over a 12 month period and that it should consider impacts that occur for the majority of the time in that period. If one of the assessment criteria cannot be completed in the way described within the descriptors for more than six months, aggregated over the 12 month period, then it should be viewed as not being able to be completed at all. This process should allow the assessment to take the fluctuations of conditions into account.

90. A further key principle of the assessment is that it must take into account the need for activities to be carried out safely, reliably, repeatedly and in a timely fashion. Where this is not possible, the assessment will consider the individual as not being able to carry out the activity at all.

Aids and appliances

91. The Government believes that priority in the benefit should go to those individuals least able to participate in everyday life. Therefore, it considers it right that the assessment takes some account of the successful use of aids and appliances. However, such an approach needs to be undertaken sensitively and proportionately, recognising that aids do not remove an individual’s impairment and that there may be additional ongoing costs associated with their use.

92. As an example it is appropriate to highlight the Department’s approach to the use of guide dogs by visually impaired individuals. The Department has no intention of penalising visually impaired people who are only able to get around and live independently with the help of a guide dog. While the support that guide dogs provide is extremely important, they do not of course help an individual to eat and drink, to manage personal care and treatment needs or to communicate with others. In addition, while they do help people get around, they do not in themselves improve the physical ability to walk or the ability to plan a journey.

93. Concern has been raised that taking into account aids and appliances creates incentives for disabled people to not take up aids that might help them. The Government does not consider that there are undue incentives: the approach being taken is proportionate and one that continues to recognise and award points to individuals who can only carry out activities with the help of aids and appliances. It will be entirely possible for individuals who use aids and appliances to receive sufficient point scores to qualify for the benefit, as long as they meet the criteria.

Testing and further developing the assessment criteria

94. The proposals for the assessment criteria published on 9 May 2011 represent the Department’s initial views on how to assess disabled people and ensure that priority in the benefit goes to those most affected by their impairments. They are an initial draft and the Government is keen to hear views on how they will work and if they can be improved. As such the Department carried out an informal consultation from 9 May to 31 August 2011 to seek views from disabled people and their organisations. Officials have met with around 60 disability organisations to discuss the draft criteria and received more than 100 written responses. The Department is currently looking closely at all the comments that have been received.

95. The Department has also been testing the draft assessment criteria over the summer to ensure that they are accurately and consistently assessing individuals and help understand their likely impact on individuals and the future caseload. The testing involved over 900 individuals taking part in a single face-to-face consultation with a trained healthcare professional employed by a provider on behalf of the Department. Information has been gathered on the volunteers’ circumstances, their impairments and the impact of these on their everyday lives. Volunteers have also been assessed against the published draft of the assessment criteria. The testing is entirely voluntary and will have no impact on individuals’ current or future benefits.

96. The majority of participants in the testing were identified by the Department from existing DLA recipients, to ensure a statistically robust sample. This sample spans the existing rates of DLA and covers individuals with a broad range of health conditions, impairments and severities. The sample is split evenly between individuals with impairments affecting physical and mental function. The Department also worked with a number of disability organisations to identify participants from key groups that it wishes to look more closely at in the testing or who it might be harder for the Department to reach. These include individuals with autistic spectrum disorders, learning disabilities, sensory impairments and Chronic Fatigue Syndrome/Myalgic Encephalopathy (ME). The Department has also assessed a sample of individuals who previously claimed DLA and were not found to be entitled.

Testing—next steps

97. The assessment testing will be complete by mid-September. Once the Department has considered the results and feedback received from the consultation, it intends to publish a second draft of the assessment criteria. This is likely to be in the autumn. Alongside this the Government also intends to publish the results of the testing and an explanation of how and why the criteria have been refined. The Department will also have had the opportunity to re-consider the participants against the revised criteria and will publish the results of this at the same time including an indication of the impact upon the existing DLA caseload and future Personal Independence Payment claimants.

98. The Government then intends to carry out a further consultation on the assessment criteria, including draft point scores. Comments from disabled people and their representative organisations on how well the second draft of the criteria work and if they could be improved, will again be welcomed.

Delivery of Personal Independence Assessment

99. The Department is currently in the process of developing the detailed delivery model for Personal Independence Payment, including the assessment process. The proposal is that everybody claiming Personal Independence Payment will undergo an assessment by a trained individual. There have been no decisions taken yet on the backgrounds, skill sets or qualifications that will be required of assessors. While they are likely to be from a healthcare background, they may not be doctors, as other professionals such as occupational therapists may have more appropriate skills. The testing of the draft assessment criteria will help inform decisions on assessor skill sets.

100. Assessments will be delivered by a third party contracted to the Department and commercial activity is planned to begin shortly. This will allow sufficient time for the successful supplier to put in place the resources and infrastructure to support the Personal Independence Payment assessment process from April 2013.

101. As above, the intention is that most individuals will have a face-to-face consultation with the assessor. This will not be a requirement in all cases, however, and some individuals will be assessed on the basis of paper evidence, such as the claim form and supporting evidence provided by the individual or a supporting professional. Where individuals are required to attend a face-to-face consultation, they will be able to bring another person with them, such as family member, friend or advocate. The Department envisages that consultations will take place on official premises or in the claimant’s home where necessary. The Department will also ask prospective suppliers to consider options for consultations to be carried out in other locations—for example, GPs surgeries, independent living centres etc.

102. The outcome of the assessment will be advice to the Department to support decisions on the appropriate benefit award and award duration. This advice will take account of evidence submitted by the claimant or their representative in addition to the consultation itself. However, final decisions on entitlement to Personal Independence Payment will remain with departmental Decision Makers. They will be able to review and consider all information and evidence provided as part of the claim and scrutinise the advice from the assessors, before making a decision on benefit entitlement.

103. The Department fully recognises the importance of the training, guidance and support given to assessors and Decision Makers and will ensure that this is high quality. The Department will work with disabled people and their representatives on the development of such products.

Harrington review of the Work Capability Assessment

104. Although the Work Capability Assessment (WCA) and the Personal Independence Payment Assessment will operate very differently, the Department is seeking to learn from the WCA experience, including looking closely at the findings and recommendations made by Professor Malcolm Harrington in his independent reviews of the WCA.

105. Professor Harrington’s first review provided the Department with a number of recommendations regarding the WCA which were accepted in full. The Department is currently considering how to reflect recommendations from this review in the end-to-end design of the administration of Personal Independence Payment.

Independent review of the Personal Independence Payment assessment

106. The Department recognises the need to ensure the new assessment is operating correctly and the value that an independent perspective on this can bring. As such the Welfare Reform Bill includes a requirement for an independent review of the operation of the assessment to be commissioned and for the report on this to be laid before Parliament within three years of the primary legislation coming into force.

107. The independent review will be undertaken by a senior independent figure with a strong background in disability. The Department will look to ensure that disabled people and their organisations can play an active role in supporting the review.

Links to other benefit assessments

108. The Government is aware that certain individuals will be required to undertake a number of different assessments in order to access a range of benefits and support. These include social care, special educational needs and the WCA. The aims and purpose of these assessments differ significantly and so at this stage the Government has not sought to join these assessments up. However, the Government recognises that multiple assessments can be burdensome to individuals and may result in the same or similar information being provided on several occasions. The Government will therefore explore opportunities for improving the links between assessments, including the greater sharing of information, to improve the administration of the assessments and the experience of individuals.

How Disabilty Living Allowance/Personal Independence Payment should Apply to Children and People Over the State Pension Age

109. Personal Independence Payment will only apply to individuals of working age (16-64) when it is introduced in April 2013. In its response to the Disability Living Allowance reform consultation, the Government stated that it wished to learn from the experience of introducing a new benefit and reassessing the existing working-age caseload before extending it to children and young people aged under 16 and people aged 65 and over.

Children

110. The needs of children are different from those of adults and may vary at key stages of development, which is why the Department would need to develop a specific child assessment before Personal Independence Payment could be applied to children. The Government has given a clear commitment that it would consult before making any significant changes to the arrangements for children.

111. The development of the arrangements for children on DLA will also take account of ongoing work across Government. The Department is working with other government departments on a cross-Government participation strategy for improving the participation of young people in education, employment and training. This will consider the role of benefits such as DLA and Personal Independence Payment.

112. The Department for Education’s (DfE) Green Paper, Support and aspiration: A new approach to special educational needs and disability, published in March 2011, sets out the Government’s aspiration to move towards a single assessment process for a child’s social care, health and special educational needs, in order to minimise the stress and burden on disabled families who have to go through multiple assessments. The DfE plan to test the approach starting this year and committed in the Green Paper to look at the findings of the pathfinders to explore whether the single assessment process might also be used to support claims for DLA and Personal Independence Payment. The Department is continuing to work with DfE officials to progress work in this area.

Transition of children

113. The Government recognises that there has been concern about the transition from DLA to Personal Independence Payment when a young person reaches age 16. The Government recognises that this is a very important and sensitive issue and is continuing to work with disability organisations that represent disabled young people to get their views on how this transition can be as smooth as possible. It will not be the case that DLA will simply end at age 16 and individuals will have to seek alternative support. The Department will get in touch with young people and their families before they reach 16, so they know what to expect and what they have to do.

Pensioners

114. The Welfare Reform Bill provides that people will not be entitled to Personal Independence Payment after they reach age 65 or State Pension age, whichever is higher.

115. The Bill includes a power to make secondary legislation so that individuals below the upper age limit who are in receipt of Personal Independence Payment can continue to receive the benefit beyond that age, provided they meet the eligibility criteria.

116. As part of the normal process of ageing, individuals can expect to experience some health challenges, and this may prevent people from being as active and independent as they would like to be. The Government’s intention is that the upper age limit for Personal Independence Payment will ensure that support is targeted to those individuals who face barriers during their working life, and may, therefore, be less able to financially prepare themselves for retirement.

Reassessing Existing Awards

117. In the three years starting in April 2013 the Government’s intention is that all existing Disability Living Allowance claimants of working-age (16-64) will be assessed for Personal Independent Payment. Where individuals satisfy the entitlement criteria for the benefit, they will be transferred from DLA to Personal Independence Payment. Those individuals who are not entitled to Personal Independent Payment, or who choose not to claim it, will not be able to retain their DLA as an alternative.

118. The Department has started to develop processes to support this and as an intrinsic part of this have committed to involving disabled people and their representatives, both at a national and at a grass roots level, in order to shape its approach. The Personal Independence Payment Implementation Development Group has sought views on potential communication requirements and will also gather views and input on the proposals which underpin the reassessment exercise.

119. The intention is to use customer panels in order to help to build an understanding of their needs and behaviours. This will help to inform the assessment and reassessment processes.

120. The Department propose to publish an outline of the proposed reassessment strategy in advance of Personal Independence Payment clauses being discussed in Lords committee stage of the Welfare Reform Bill.

121. A number of options are being explored for how these cases could be ordered. The Government has given a commitment that the Department would consider beginning the reassessment with a statistically valid sample of cases, perhaps in dedicated locations. The Department would therefore not propose to begin reassessment of these cases until it has successfully completed an initial test of both its systems and processes in a live environment, beginning as soon as would be practicable following the introduction of the new benefit in April 2013.

Communications with Claimants and the General Public

122. The Government recognises that the communications task in relation to the reform of Disability Living Allowance is challenging; the target audiences are large and complex and their requirements, understanding and behaviours are very diverse.

123. The Department is working with disabled people and their representatives at national and grass-roots level to understand their communication needs and how best to address these. This supports the Department’s commitment in Annex 1 of the Governments response to the consultation on DLA reform to continue to put the disabled person at the heart of the development of the new benefit and the claim process.

124. Considerable progress has already been made. After the reform of DLA was announced in the Budget in June 2010, the Department began consulting informally with disabled people and disability organisations in advance of the formal consultation exercise. This included developing the new assessment with an independent group of specialists in health, social care and disability, including disabled people.

125. To supplement the formal consultation exercise, Ministers and officials met a large number of disabled people and their representative groups, as well as DWP staff, to discuss reforms and the introduction of Personal Independence Payment.

126. The Government is committed to ensuring that its stakeholders are fully informed and consulted during the development of Personal Independence Payment and that disabled people have a genuine opportunity to influence and shape the detailed design. This is being managed through regular engagement with members of the DWP Customer Representative Group Forum.

127. A Personal Independence Payment Implementation Development Group has been set up to involve customer representatives in the design and delivery arrangements, including how information about the new benefit can be communicated in the most effective way. The first customer representative research groups took place on the 26 and 27 July 2011 and focused on communications for existing DLA claimants and partner information needs, including for example information about the main elements of the new benefit for welfare rights advisors.

128. Customer panels involving disabled people themselves are being put in place. Those involved will be invited to give views on their communication needs throughout key stages of the development of the business process. Detailed customer profiles have been built to understand the characteristics, drivers, channel preferences and health issues of disabled people. These will be used to inform the research fieldwork due to begin in September 2011 which will be facilitated by a specialist external research company. The intention is that learning from these exercises will be used to inform all aspects of communications.

129. Throughout the reassessment process, the Department is committed to ensuring that information will be clear and easy to understand so that claimants know what is going to happen, when it will happen and what they need to do. The Department has already asked for views from the Development Group about reassessment communications and will use this information to help inform the approach. Further insight will also be obtained from the customer research panels.

130. The Department is looking afresh at how it communicates with claimants and their representatives in the pre-claims stage—the period of time during which a claimant finds out about the benefit and decides whether or not to make a claim. Claimants and their representatives will be asked for their views and will be involved in testing communications.

131. The Department will also involve disabled people and their representatives in designing the new claims process. This will be done through the Personal Independence Payment Implementation Development Group and through customer research panels. Information will be tailored wherever possible to reflect individual needs, such as needs of different age-groups, in terms of content and channel preferences and in line with business cost considerations.

132. To ensure that Personal Independence Payment is clearly and effectively communicated the Department is committed to learning from experience. Departmental research reports, insight data and operational analysis are being used to inform communications, particularly from the claimant’s point of view and identify potential areas for improvement.

133. When Personal Independence Payment is introduced, the Department will have had considerable experience of managing the move of individuals to a new benefit following the transition of Incapacity Benefit claimants to Employment Support Allowance (ESA). Although ESA and Personal Independence Payment are different benefits with different purposes, the Department will ensure lessons learned from that experience are applied to Personal Independence Payment communications.

134. The Department is also taking Professor Harrington’s recommendations into account in the way that Personal Independence Payment communications work. Specific examples include ensuring claimants’ are supported through reassessment.

135. The Department is continuing to draw on evidence-based research and insight to inform the strategy and plan activity, it will continue to evolve over time responding to further engagement and feedback from multiple audiences. The results will be monitored against base-lined data and targets to ensure the communications are evaluated.

8 September 2011

Annex 1

DLA REFORM—SUMMARY OF CHANGES—CHANGES MARKED IN ITALICS

Disability Living Allowance

Personal Independence Payment

Qualifying Period & Prospective Test

Have to have been severely disabled for three months and likely to be for a further six months.

Have to have been severely disabled for six months and likely to be for a further six months.

Principal entitlement rules

Care needs and mobility are the measures used as proxies for extra costs.

Focus is on the impact of a health condition or impairment on the individual’s ability to carry out everyday activities, acting as a proxy for extra costs.

Rates and components

Two Components—care and mobilityThree care rates and two mobility rates11 different award outcomes

Two components—Daily Living and MobilityTwo rates per componentEight different award outcomes

Assessment process

“Self assessment” claim form with claimant’s own description of their care and mobility needs.Additional medical evidence gathered in around 50% of cases. Medical examination in small minority of cases.Decisions are subjective rather than objective in nature.

Under PIP we intend to have a more objective, evidence based, consistent and transparent claims and assessment process.We will seek to gather more additional evidence in more cases than currently. There will be a stronger focus on information from healthcare professionals involved in supporting individuals.We intend for most individuals to have a face-to-face consultation with an independent trained assessor as part of the assessment process.

Age—Children

Children only able to access mobility rates at certain ages (up to 16th birthday). Additional rules to separate out normal childhood care/mobility needs from those associated with disability.

PIP will not apply to children when it is introduced in 2013. We will use our experience of applying PIP to the working-age population to inform our decisions about children.

Age—Over 65s

Claims cannot be taken after the age. Entitlement can continue after the age of 65 if already in receipt.

No change.

Residence and presence/ exportability

With some exceptions someone has to be ordinarily resident in Great Britain, not subject to immigration control, present in GB and have been present for an aggregate period of not less than 26 weeks in the previous 52 weeks. Care component exportable.Temporary absence is currently allowed for up to 26 weeks.No consideration currently given to entitlements received from another EEA country.

Habitually resident (to align with other benefits including the proposals for Universal Credit), not subject to immigration control, present in GB and have been present for an aggregate period of not less than 26 weeks in the previous 52 weeks immediately preceding the date on which a claim is made. The 26 out of 52 would be applied on a one off basis and not on a rolling basis.We are proposing reducing the period that temporary absence is allowed to four weeks, to align with ESA.Where another EEA competent state paying an equivalent benefit, PIP is not payable.

Hospital

DLA (both components) ceases to be payable 28 days (84 days for children) after NHS hospital admission. Mobility component can continue to be paid if a Motability agreement in place. Private patients are unaffected by these rules.

No change.

Care Home

The care component ceases to be payable after 28 days of care home residency where the costs of the accommodation are met from public or local funds. The mobility component continues to be paid. People fully funding their placement are unaffected by these rules.

Self-funders continue to receive either component of PIP. Non self-funders lose payability of both the care and mobility components after 28 days.

Award duration/ reviews

Awards can be made for a fixed or indefinite period. Awards are not routinely scrutinised.

Awards will normally be made for a fixed period. Awards will be routinely reviewed.

“Deeming” provisions

Certain conditions are deemed to meet conditions of entitlement despite there being no functional limitation, eg severe mental impairment; severe visual impairment.

There will be no automatic entitlements to PIP, with the exception of the Special Rules for people who are terminally ill.

Prepared 16th February 2012