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Supporting disabled people, in and out of work

Submission to the Comprehensive Spending Review 2020

17 September 2020

1. Introduction

1.1 The Disability Benefits Consortium (DBC)[1] is a network of over 100 organisations with an interest in disability and social security. For our full list of members, see

1.2 Using our combined knowledge, experience and direct contact with millions of disabled individuals, people with long-term health conditions and carers, we seek to ensure that Government policy reflects and meets the needs of all disabled people.

1.3 We welcome the opportunity to make a submission to the 2020 Comprehensive Spending Review (CSR).

1.4 In doing so, we have concentrated on two aspects of our current concerns, where our recommendations have clear spending implications and which we consider constitute an important opportunity to invest in the wellbeing and social and economic participation of disabled people. These are:

• proposals to restore elements of support to disabled people which were lost in the transition from “legacy benefits” to Universal Credit (UC); and

• proposals to continue, in financial year 2021-2, the £20 per week uplift to UC and Working Tax Credit (WTC) arising from the impact of Covid-19; and to extend it to legacy and similar benefits.

2. Restoring lost disability elements to Universal Credit

2.1 The introduction of UC, gradually replacing six “legacy” benefits, has been a matter of great interest and concern to our member organisations and those whose interests they seek to represent.

2.2 These claimant groups have not done well from the changes to the social security system over the last ten years. Research recently published by the DBC[2] highlighted the financial impact and lived experience of these changes and gave much cause for concern regarding the effect they have had on many disabled people’s wellbeing and right to independent living.

2.3 Those disabled people adversely affected do not just lose money – they can lose access to transport, their independence, and in some cases, their jobs. Problems affect both benefits for basic daily living, such as Employment and Support

Allowance (ESA) and UC; and those intended to help with the extra costs of disability, such as Disability Living Allowance (DLA) and Personal Independence Payment (PIP).

2.4 Within UC itself, there is a pattern of gainers and losers, but the losses for disabled people are considerably greater than the gains.

2.5 A principal cause of losses for disabled UC claimants is the reduction or removal of elements relating to disability that obtained within the legacy system.

2.6 In September 2019, we published recommendations that sought to put this right[3]. While still fitting in with the overall design and structure of UC, they aimed to address as effectively as possible the losses faced by different groups, especially the income reductions which the evidence indicates are likely to lead to the greatest hardship.

2.7 These recommendations remain fully relevant and are set out below, with updated costings.

2.8 The costings[4] for our recommendations are at this point provisional and are based on the numbers we have estimated as being affected. We have used benefit rates for 2020-21 as figures for 2021-22 are not yet published.

2.9 As we are concerned with how UC is structured, in comparing entitlement the numbers used are based on total current or recent recipients and so reflect costs once UC is fully rolled out and any transitional protection exhausted.

2.10 This means that, for the next few years, actual costs would be considerably less than those quoted, as transitional protection has already been taken into account in official costings.

2.11 Our recommendations are as follows:

Additional support for disabled people who live on their own and do not have a carer

1. a) Introduce a Self-Care Element paid at the same rate as the Carer Element to anyone who does not have someone caring for them who is claiming Carer’s Allowance (CA) or the Carer Element or Premium.

Numbers affected: 528,000 people were in receipt of the Severe Disability Premium (SDP) in Feb 2018[5]. (There would in addition be some who do not live on their own but do not have a carer who would be eligible for carer payments, but this is likely to be relatively few as, under UC, partners and others who are working and are a carer will be able to claim the Carer Element of UC).

Cost: £1,030 million a year. NB the actual cost for a number of years would be a small fraction of this. All those currently receiving the SDP are guaranteed a transitional payment even if they move to UC following a change in circumstances (and so do not undergo “managed migration”). As a result, there would only be a cost for those who newly qualified for the proposed Self-Care Element.

b) Increase the Self-Care Element (and correspondingly the Carer Element) by £30 a month, so that those on UC who would have qualified for the SDP in the ESA Support Group have no less additional support on UC than in the legacy system[6].

Numbers affected: 528,000 currently on SDP; 150,000 claim UC with CA; and 185,000 carers claim Income Support (IS)[7].

Cost: £310 million.

Support for parents of disabled children

2. The lower rate of the Disabled Child Element should be restored to its level in the legacy system.

Numbers affected: In 2018-19, 130,000 disabled children in households with someone in work were entitled to the lower rate of the Disabled Child Element of Child Tax Credit (CTC) but not the higher rate[8] and in 2018 there were 101,000 households with no-one in work that had a disabled child entitled to just the lower rate of the Disabled Child Element of CTC[9].

Cost: £435 million a year (£245 million for those in work and £190 million for households with a disabled child and no-one in work).

Increasing and simplifying support for disabled people in work or looking for work

3. a) Anyone entitled to any award of PIP or DLA should automatically be entitled to the Disabled Person’s Work Allowance.

b) Those who are awarded some points in a Work Capability Assessment (WCA) but not sufficient points to qualify as having Limited Capability for Work (LCW) should still be entitled to the Disabled Person’s Work Allowance.

Numbers affected: 104,000 households had the Disabled Worker Element included in their Tax Credit award[10]. Of these, 43,000 would be unable to take advantage and are covered separately in recommendation 5.

Cost: £135 million a year (this is a very significant overestimate – those on DLA/ PIP automatically qualify for the Disabled Worker Element of WTC but under current rules, to qualify for additional help under UC, they would also need to have a WCA. Most of those on DLA/PIP would be likely to qualify for at least LCW and would therefore be entitled without this recommendation).

4. Someone with a serious health condition or impairment with a GP note saying that their condition or impairment limits their ability to work should automatically be entitled to a WCA to test their entitlement to the LCW or Limited Capability for Work-Related Activity (LCWRA) addition and the Work Allowance, regardless of their earnings.

Cost: no increased benefit but may increase take-up.

5. a) Work Allowances should be additive and two Work Allowances should be awarded if there are two disabled workers in a household – the second Work Allowance to be paid at the lower rate.

Numbers affected: in 2018-19, 42,000 parent households had the Disabled Worker Element included in their Tax Credit award and 1,000 households had two Disabled Worker Elements included in their WTC.

Cost: £105 million[11].

b) The Carer Element and the LCW or LCWRA component should be additive.

We do not have numbers affected or costs for this recommendation, but neither is likely to be great.

6. To ensure that disabled people with a mortgage are not prevented from trying work or keeping in touch with their workplace:

a) Support with mortgage interest should be available to those with a mortgage earning less than the lower Work Allowance, as well as those not working.

b) Anyone who has qualified for support with mortgage interest and then moves into work should not have to wait to requalify for mortgage interest support if in less than a year they need to stop working.

Cost: likely to be cost saving as current position is likely to prevent people from trying work or staying in the workplace for a few hours a week.

Restoring the LCW element would assist disabled people unable to work, disabled people looking for work and those in work

7. The LCW element should be reinstated.

Numbers affected: 414,000 people in the Work-Related Activity Group (WRAG) of ESA (Feb 2018)[12].

Cost: £635 million[13].

Simplifying the elements within UC to reflect the fact that they are there now both to support those who are unable to work but also to cover the additional costs disabled people face in work

8. a) Someone entitled to any element of PIP or DLA should be entitled to the LCW element as well as the Disabled Person’s Work Allowance (see recommendation 3).

Numbers affected: the Disability Premium is included in the benefit of 76,000 on IS and 36,000 on Jobseeker’s Allowance (JSA)[14].

Cost: £170 million (additional cost if LCW element reintroduced).

b) Except that someone entitled to the Enhanced Daily Living Element of PIP or the Higher Rate Care Component of DLA should be entitled to the LCWRA element as well as the Disabled Person’s Work Allowance.

Numbers affected: the Severely Disabled Adult Element was included in the WTC award of 46,000 households[15]; and 29,000 people on IS were in receipt of the Enhanced Disability Premium (EDP)[16]. It is likely that of these, about 3,000 would not qualify for the LCWRA element. In addition, 56,000 people in the WRAG of ESA were entitled to the EDP.

Cost: £240 million.

Under-25s

9. Under-25s in the LCW group should be entitled to the 25 and over living costs element.

Numbers affected: In November 2018, 126,000 people under 25 years of age were claiming ESA[17].

Cost: £100 million.

Ensuring that contribution-based benefits and occupational pensions are not rendered worthless by UC

10. Income other than earnings should be subject to a taper, not taken pound for pound.

Numbers affected: we do not have the numbers for households who have their Housing Benefit (HB) or WTC reduced as a result of an occupational pension and/ or a contribution-based benefit.

Cost: would depend on the level of the taper and the numbers affected.

3. Retaining and extending the Covid-19 benefit uplift

3.1 The decision to increase UC and WTC, by £20 per week, to help claimants cope with the financial shock of Covid-19 was widely welcomed. However, this was announced as a 1-year temporary measure.

3.2 Given that the financial impact of the pandemic on family budgets is far from over – not least as the furlough scheme is wound down – the DBC is among those who are calling for the uplift to be renewed in 2021-2, above normal uprating.

3.3 Moreover, we have also argued that the £20 increase should be extended to legacy and similar benefits (and backdated to April 2020) on the grounds that anything else would be discriminatory; that disabled people already face additional costs and reduced benefits; and that disabled people in particular are facing increased costs as a result of the Covid-19 emergency.

3.4 In this context, it is all the more important that any extra support the Government is able to provide does not exclude those disabled people not receiving UC or WTC.

3.5 Most respondents to a DBC survey of the effects on claimants of the pandemic[18] told us that receiving an extra £20 a week would make a real difference to their lives. They told us that it would:

• mean being able to afford the essentials and not having to choose between needs like heating and medication

• mean people being able to manage their health better

• reduce claimants’ anxieties

• reduce the likelihood of going into debt.

3.6 The proposed continuation and extension of the uplift would apply to: UC; WTC; IS; the contributory and income-related versions of ESA and JSA; CA; and the HB personal allowance.

3.7 The Joseph Rowntree Foundation (JRF) has made broadly similar recommendations, calling for the continuation of the uplift and its extension to the legacy benefits that are being replaced by UC:

“The Government must keep doing the right thing and keep families afloat. It must keep the lifeline, strengthen social security and support the recovery by making the £20 uplift to Universal Credit permanent and extending it to legacy benefits. Total cost: around £9 billion a year” [19].

3.8 Our proposal is wider, in that it includes the contributory versions of ESA and JSA, as well as CA, which – although not means-tested – are disproportionately received by households on low incomes. (Note that claimants receiving one of these benefits topped up with a means-tested legacy benefit would in effect receive only one uplift, as the former are fully taken into account in calculating the latter).

3.9 We have not, at the time of writing, been able to cost a £20 uplift to the non-means-tested benefits indicated, although we consider the case for it to be very strong.

3.10 For the continuation of the UC uplift to 2021-2 and its extension to legacy benefits, we have adopted the Joseph Rowntree Foundation’s cost estimate of £9 billion per year (see above).

4. Conclusion

4.1 We consider that the above recommendations constitute a constructive investment in the wellbeing and social and economic participation of disabled people and those with long-term health conditions.

4.2 They reflect the priorities of the CSR in that:

• They will enable disabled people better to live independently in the community, reducing pressure on public services, notably social care and the NHS.

• They will better support carers, again reducing pressure on social care and the NHS.

• They will better support families with disabled children, improving their future life chances and educational prospects.

• They will support disabled people in work more effectively and improve work incentives.

4.3 All of these will feed into strengthening the UK’s economic recovery from Covid-19 and levelling up economic opportunity among different population groups – while improving outcomes in public services, including supporting the NHS and enhancing educational opportunity.

Further details are available from:

Geoff Fimister

(Policy Co-Chair,

Disability Benefits Consortium)

Tel. 07743 813740

E-mail gfimister@blueyonder.co.uk

Appendix: glossary of abbreviations

CA Carer’s Allowance

CSR Comprehensive Spending Review

CTC Child Tax Credit

DBC Disability Benefits Consortium

DLA Disability Living Allowance

EDP Enhanced Disability Premium

ESA Employment and Support Allowance

GP General Practitioner

HB Housing Benefit

IS Income Support

JSA Jobseeker’s Allowance

LCW Limited Capability for Work

LCWRA Limited Capability for Work-Related Activity

NHS National Health Service

PIP Personal Independence Payment

SDP Severe Disability Premium

UC Universal Credit

WCA Work Capability Assessment

WRAG Work-Related Activity Group

WTC Working Tax Credit

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[1] See p.12 for a glossary of abbreviations.

[2] M. Griffin, Has welfare become unfair?: the impact of welfare changes on disabled people, DBC, July 2019: bit.ly/DBC-HasWelfareBecomeUnfair

[3] S. Royston, Mending the holes: restoring lost disability elements to Universal Credit, DBC, Sept. 2019:

[4] Rounded to the nearest £5 million.

[5]

[6] The additional £1,000 in 2020-21 for all households on UC but not on legacy benefits means that during 2021-22, if a Self-Care Element were in place, someone in this position would then not be overall worse off on UC.

[7] Stat-Xplore Feb. 2020 benefit combinations.

[8] Child and Working Tax Credits statistics: finalised annual awards – 2018 to 2019

[9] Parliamentary written answer by Liz Truss MP, 23/7/19 (to a question by Marsha de Cordova MP).

[10] CTC/WTC statistics, 2018-19.

[11] Lower Work Allowance is £287 a month, so worth £181 a month (taper at 63%).

[12]

[13] Numbers on JSA and IS have been included in costing for recommendation 8, although some would qualify anyway if recommendation 7 were enacted but not recommendation 8.

[14]

[15] CTC/WTC statistics, 2018-19.

[16] Extrapolating from ESA figures – assumed that 4% of those entitled to the Enhanced Daily Living Element of PIP or the Higher Rate Care Component of DLA do not qualify for the LCWRA element.

[17] DWP stat-explore

[18] See

[19]

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