Memorandum by the Child Poverty
Action Group
Rates of the Employment and Support Allowance
1. Regulation 67 of The Employment and Support
Allowance Regulations 2008 prescribes the various rates of ESA.
The actual amounts are contained in Schedule 4 to the regulations,
with the amounts of the support and work-related actively components
contained in Part 4 of that Schedule. For more detail see our
chart attached.
- The basic allowance of ESA is £60.50 payable
during the 13 week assessment phase.
- Those under 25 will receive a lower basic allowance
of £47.95.
- The work-related activity component will be £24
and the support component £29.
2. The components only become payable once the
assessment phase is over and, unlike the disability premium in
income support, are paid at the same rate for couples as for single
people. The overwhelming majority of ESA claimants will be in
the work-related activity group. Many claimants in receipt of
middle and higher rate Disability Living Allowance (DLA) may not
meet the eligibility criteria for the support group and the higher
rate of benefit it offers.
3. We are concerned that the Government has not
met the spirit of its commitments made in parliament regarding
the rates of ESA, and that many claimants will in fact be worse
off under ESA than they would be under the existing system: "new
customers will have a higher rate of benefit than the current
long term rate of incapacity benefit". Jim Murphy MP,
Hansard House of Commons Standing Committee 17 October 2006 Column
GC19).
4. Many claimants on DLA will receive less under
the new system than they would have under the old, due mainly
to the lower amounts payable during the assessment phase. For
example, a single person getting income support on the grounds
of incapacity, and the lower or middle rate care component of
DLA will receive a lower rate of benefit under ESA than under
the current system, and in the first year of claim they will be
about £400 worse off. Under the current system they would
receive £86.35pw from day one of their claim. Under ESA they
will receive only £60.50 for the first 13 weeks of their
claim, and then £84.50 thereafter.
5. Everybody in the work-related activity group
will receive £84.50 after 13 weeks. This compares with existing
claimants on income support who are entitled to the disability
premium who get £86.35, amounting to a reduction of £1.85
per week.
6. Those on contributory- ESA will lose entitlement
to age additions and additions for spouses. For example, under
the current system someone who became sick under the age of 35
on the long-term rate incapacity benefit will receive £102.25.
Under the new system they will receive £89.50. For couples
the losses are even greater. A couple where the claimant became
sick under the age of 45 on long-term incapacity benefit would
receive £143.95. Contributory-ESA will pay the same couple
a maximum of £123.95 (support group). The vast majority will
be in the work-related activity group and receive £118.95.
For the most severely disabled claimants therefore, who have worked
and paid NI contributions, the maximum payable under ESA is lower
than under incapacity benefit.
Disabled students
7. The rules on income-related ESA entitlement
and studying are contained in Schedule 1 para 6(1)(g) Welfare
Reform Act and Regulations 14 -18 The Employment and Support Allowance
Regulations 2008. Schedule 1 para 6(1)(g) Welfare Reform Act disentitles
anyone receiving education from the income-related allowance.
This provision does not apply, by virtue of Regulation 18 ESA
Regulations, to claimants entitled to DLA. What counts as education
is set out in Regulation 14 ESA Regulations 2008. The only
disabled students who will be entitled to claim income-related
ESA will be those studying part-time or those entitled to DLA.
Key concerns
8. This is a much more restrictive than under
the current rules which allow full-time disabled students to claim
income support on grounds of incapacity if they have been incapable
of work for over 28 weeks, are registered blind, or qualify for
a disabled student's allowance because they are deaf. This also
goes against the assurance given by Lord McKenzie in Committee:
"We also make specific provision for certain
groups of disabled students to access income support while they
are studying, and we are bringing forward that access to benefit
for income-related ESA." (Hansard Grand Committee debate,
20 February 2007, Column GC19).
9. We think limiting it to those entitled to
DLA is too restrictive and goes against the thrust of the Act
which is about helping people into work - receiving education
is likely to increase employment opportunities and lead to sustainable
and better quality work.
10. There are many examples of people with ill
health or disability who do not receive DLA, but nonetheless have
chronic ongoing health problems and are incapable of work. The
two tests are quite different, one looking at someone's care and
mobility needs, and the other looking at their ability to work/pass
a work capability assessment. DLA is a benefit with notoriously
uneven adjudication and which remains badly under-claimed. So
we would argue that in addition to using DLA as a marker other
routes should be available, such as those who currently count
as a "disabled student" for income support purposes.
Not having these qualifying routes would surely have a negative
impact on the numbers of people with disability retraining and
improving their education, and therefore employment opportunities.
11. Moreover, some of these students, such as
deaf students, will not be able to claim income support on the
basis of being a deaf student because Regulation 2(1) The Employment
and Support Allowance (Transitional Provisions) Regulations 2008
removes this right. Any income support claim made in this capacity
will be treated as a claim for ESA but the ESA claim will not
succeed if the deaf student is not getting DLA. Therefore some
disabled students could be caught without any form of financial
support.
12. The bar only applies to income-related allowance
- why restrict the educational activity of those on income-related
ESA? Whether getting the contributory or income-related allowance
both sets of claimants are sick or disabled people wanting to
pursue education. One of the points made to us by the DWP was
that they didn't want to subsidise a claimant's study. But the
income-related allowance is means-tested so any applicable income
the student gets by way of grants/loans will be taken into account
anyway. We therefore do not understand why there needs to be such
a restriction for students getting the income-related allowance.
Severely disabled claimants and the 'limited capability
for work' test
13. CPAG are concerned that some of the most
severely disabled claimants may be subject to unnecessary stress
and difficulty in the assessment of their entitlement to Employment
and Support Allowance, because the regulations do not provide
that they are automatically treated as having a limited capability
for work.
14. Under section 1(3)(a) of the Welfare Reform
Act, a basic condition for entitlement to an Employment and Support
Allowance is that the claimant has 'limited capability for work'.
Under section 8, whether a person has such a limitation is left
for determination in accordance with regulations. Regulations
20, 25 - 28, 30 and 33 of the Employment and Support Allowance
Regulations make provision for treating certain claimants as having
limited capability for work, with the effect that they will not
have to provide information or attend for a medical examination
to determine whether they have such a limitation.
15. Those regulations do not include those claimants
who are entitled to the support component. People entitled to
this component are people who the Government have described as,
'people with the most severe functional limitations', 'people
with the most serious disabilities and health conditions' (A
new deal for welfare: Empowering people to work', Cm 6730,
paras 67, 83), and 'the poorest, most disabled people in society'
(More support to help people into work - Purnell announces
rates for new Employment and Support Allowance, DWP News Release
DRC - 067, 27 March 2008).
16. To become entitled to the support component,
the claimant must satisfy the test of 'limited capability for
work-related activity' under Schedule 3 to the regulations. Claimants
that will satisfy that include those with no voluntary control
over their bowels, those who cannot eat or drink without physical
assistance and those who due to mental health problems have with
severe difficulties with learning, or tasks like planning and
communication. It seems highly unlikely that many such claimants
would in practice actually fail the test of limited capability
for work. Subjecting them to it would seem likely to be a waste
of public money.
17. The absence of an express provision to treat
people entitled to the support component as having limited capability
for work means that, although they are recognised as being the
most severely disabled claimants, they may be required to complete
questionnaires and attend for medical examinations. Subjecting
them to tests creates the possibility that some of those may encounter
difficulties with the medical examination and subsequent decision-making,
and find that they are initially refused ESA and have to appeal
to get an obviously incorrect decision changed. There is a significant
body of caselaw from the social security commissioners indicating
a history of problems with medical assessments for benefits, and
associated weighing of evidence and decision-making.
18. In so providing, the regulations do not actually
go beyond the powers laid down in the Act. However, CPAG believe
that they may not properly reflect the overall policy intention,
and certainly create the possibility that some of the most severely
disabled members of the community may be subject to unnecessary
stress and inconvenience.
19. To rectify this, the category of 'the claimant
is a member of the support group' could be added to regulation
20, for example as a new subparagraph (g).
Claims for income support on grounds of disability
treated as claims for ESA
20. Regulation 2 (1) The Employment and Support
Allowance (Transitional Provisions) Regulations 2008 provides
for a claim for income support on grounds of disability to be
treated as a claim for ESA. Regulation 1(4) defines what counts
as income support on grounds of disability.
21. The result is that the following people will
be excluded from claiming income support and will instead have
to claim ESA. The only removal of routes into income support that
seem explicable are those based on incapacity for work, e.g. -
those set out in paragraph 7(a) and (b) Schedule 1B IS Regulations.
It is not clear to us why the current routes into income support
set out below are to be removed and replaced by ESA when they
are not routes based on incapacity for work.
Persons not treated as engaged in remunerative
work
22. Regulation 6(4)(a) IS Regulations allows
a disabled person whose earnings or hours of work are 75% or less
of what a person without that disability would reasonably be expected
to undertake/earn.
23. It is not at all clear to us why this change
is being made to not allow such a person to claim income support
but instead make them claim ESA. They are in work. Their claim
for income support is not on grounds of incapacity for work. It
is on grounds of not being treated as in remunerative work to
enable them to work over 16 hours a week and still get income
support to top up their low earnings. In recognition that their
disability causes them a lower earning power than someone without
that disability.
Circumstances in which people in relevant education
may be entitled to income support - Regulation 13(2)(b) IS Regulations
24. This regulation allows a person entitled
to a disability or severe disability premium whilst in relevant
education to claim income support. Such a person could be getting
this premium by virtue of getting DLA rather than having to show
any incapacity for work. It is not clear to us then why this route
to income support should be removed.
Disabled students - Paragraph 10 (a) Schedule
IB IS Regulations
25. This allows disabled students entitled a
disability or severe disability premium to claim income support.
Again, as this entitlement could well be by virtue of getting
DLA rather than through having an incapacity for work we do not
see why access to income support is being closed off for these
students.
Deaf students
26. Paragraph 12 Schedule 1B allows certain deaf
students to claim income support - none of these conditions link
to a need to show an incapacity for work.
Registered blind
27. Paragraph 13 Schedule 1B allows those registered
blind to claim income support. Again this route to income support
is not based on a need to show incapacity for work.
28. We are also concerned that full-time disabled
students who are not getting DLA will not be able to access either
income support or income-related ESA because of these rules.
Broader policy objectives
29. CPAG is concerned that the regulations
run counter to some of the Government's broader policy objectives
on the economic security of disabled people and the eradication
of child poverty.
30. When John Hutton was Work and Pensions Secretary,
he gave an undertaking that all departmental policy would be 'child
poverty proofed', as confirmed to Parliamentarians by the then
Minister for Welfare Reform, Jim Murphy MP:
"I shall deal with some of the specific points
raised by my hon. Friend the Member for Bristol, East. She asked
about child poverty-proofing policies. I know that she and other
hon. Friends welcome the commitment by the Secretary of State
for Work and Pensions to child poverty-proof every one of the
Department's proposals and policies." (Jim Murphy, Hansard
, 6 March 2007, Column 420WH).
31. However, we believe that the regulations
fail the child poverty proofing test for the following reasons:
- The ESA rates will leave many families poorer
than they would have been on the equivalent IB rates.
- Sanctioning in the ESA regime will result in
increased hardship for families affected and there is no indication
that consideration will be given to children of claimants when
sanctioning decisions are made.
- With a government estimate of 10% of current
IB claimants expected not to retain entitlement to IB following
transition to the Work Capability Assessment, there are (according
to current DWP claimant data) up to 40,000 children whose family
income will drop as a consequence.
- Lack of automatic passporting to benefits such
as the social fund, legal aid and free prescriptions for contribution-based
ESA claimants with no other income will inevitably mean some families
fail to gain these important benefits.
32. We are also concerned that the rates announced
in the regulations do not support the Government's policy objectives
for disabled people through their independent living agenda. The
Government's long-term policy agenda for disabled people was established
by the report Improving the life chances of disabled people
(Jan 2005) from the Strategy Unit in the Cabinet Office. The
report highlighted that:
"Among workless households with children the
majority have at least one disabled parent: children are more
likely to experience poverty if there are disabled adults in their
family." (p. 37);
"Recognising the particular needs and circumstances
of disabled parents will be vital to the achievement of policy
objectives of increasing employment rates and tackling child poverty"
(p.69);
and contained the following clear policy objective:
"The Government's vision: By 2025, disabled
people in Britain should have full opportunities and choices to
improve their quality of life, and will be respected and included
as equal members of society." (p. 44)
33. However, it was also found by a DWP research
that:
"DLA/AA at their current levels are not sufficient
to meet costs (rates are lower than most, but not all estimates
- though some estimates include costs that DLA/AA are not intended
to cover)." (DWP Working Paper no. 21 Review of Existing
Research on the extra costs of disability)
34. While DLA/AA are extra support benefits and
IB/ESA are income replacement benefits, there is significant crossover
between DLA and IB claimants and the demarcation between the costs
that DLA and IB are meant to meet is unclear: DWP acknowledges
that because DLA is limited to care and mobility needs, not all
the extra costs of disability are met by the benefit. It is therefore
inevitable under the regulations before Parliament that lower
entitlement for any ESA claimants relative to what they would
have received from IB will take some disabled people further from
being able to meet the extra costs of their disability and will
undermine progress towards the Government's 2025 vision for disabled
people.
ESA rates: a comparison with IS and IB: