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Welfare Reform Bill: Tackling or generating disability poverty?

17 February 2011

The Welfare Reform Bill contains some positive elements but that the overall package of welfare cuts risks increasing poverty and despair for disabled people and their families.

Neil Coyle, DA Director of Policy says:

“The Government’s plans contain some advantages for disabled people, but also significant risks surrounding how – and if – disabled people will be able to access appropriate support at crucial times”.

We welcome:

• Efforts to simplify access to benefits – the new Universal credit may deliver this in the long-term but the transition period will be fraught with risks for disabled people who could have complex support arrangements removed;
• Greater help for disabled people to find and keep suitable employment [1];
• A universal benefit taper for those who find work but who are on low earnings; 
• Genuine efficiency savings through reduced bureaucracy costs which we hope will result in higher resources to support disabled people; and
• The aspiration to tackle poverty which underpins the Universal Credit [2], but we fear this aim is undermined by the overall package of cuts to support.       

End of the DLA ‘lifeline’?
Our main concern remains the abolition of working age Disability Living Allowance (DLA). We estimate over 750,000 disabled people will lose support as a result of this proposal – which has been proposed to cut more than £2.1 billion from DLA support [3].

The replacement benefit, the ‘Personal Independence Payment’ (PIP) will not provide the same levels of support as DLA. The PIP will axe the level of support which 643,000 disabled people currently receive but even this will not achieve the Government’s cuts target [4]. It will cost £675 million to run the new assessment process – paid for by cuts to disabled people’s direct support. [4].

The Bill (Part 4, Clause 81) also reveals that people receiving PIP will automatically lose it when they reach pensionable age or 65. This means older people will lose support despite levels of needs and costs of living remaining high and is another worrying signal of the tough times ahead for disabled people and their families across Britain.

Other concerns include:

• The lack of detail on how some existing support will be maintained under the Universal Credit (eg disability and carer premiums);
• How disabled people’s needs are identified to ensure access to help to get and keep jobs. The current system, the ‘Work Capability Assessment’, is unfit for purpose but is being made tougher from April 2011. This will negatively impact on the effectiveness of the Government’s flagship Work Programme; and
• When support will be available. The Work Programme will not be functioning until summer 2011 despite other support being reduced or withdrawn already [5].

Notes:
[1] The new Work Programme will aim to incentivise help for disabled people and other disadvantaged groups through higher payments to contractors able to secure sustainable jobs.

[2] The ‘Universal Credit: welfare that works’ (DWP, 2010) consultation suggested 350,000 children and half a million working age adults could be lifted out of poverty through reform.

[3] The reform proposals mean an end to low rate care payments; DLA currently has lower, middle and higher rates of payments for people needing ‘care’. The PIP will only have two rates for ‘daily living’. See our interim report on DLA reform for further information: www.disabilityalliance.org/dlareformpress.htm. For information on the cost of the new assessment process see: http://www.dwp.gov.uk/docs/dla-reform-wr2011-ia.pdf

[4] Currently, 643,000 disabled people receive the lower rate payment of care (using the latest ONS data, available from DWP, from May 2010). Low rate care DLA is paid at £18.95 per week. Total payments amount to £634 million per year; this leaves a shortfall in meeting the cuts target of at least £366 million. The average DLA payment is £70 per week and using this figure we estimate a further 100,000 disabled people will lose support – a total of 743,000 people. The Government has also targeted 80,000 disabled care home residents for cuts to DLA mobility payments making a total number of disabled people likely to lose DLA support to over 823,000. This is a conservative estimate as we are excluding:

• children and older people who may be covered by the new assessment in due course; and
• the families/carers of the disabled people directly affected (losing access to Carer’s Allowance for example).

[5] Pathways to Work has been abolished and Access to Work (which helps employers meet the extra costs of employing a disabled person) has been restricted since July 2010.

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