Keeping supporting people might be nice, but how will we find the money? Aren’t the increases in the benefits bill unsustainable?
Although spending on health- and disability-related benefits is increasing, overall spending on all working age benefits is not. This is true for the expected future increases as well: they are not expected to push the overall benefits bill higher than the current level. The facts don’t support the argument that the spending is ‘out of control’. If the proposals the Labour government has put forward go ahead, this will lead to spending on benefits for working age people decreasing over the next 5 years, even though our population of Disabled people is projected to increase.
The increases in health- and disability-related benefits reported in the government’s statistics are partly because of changes to demographics (especially the rising pension age and aging population), and partly because the way that disability- and health-related benefits are counted has changed, meaning that some spending that in earlier years wasn’t considered to be health- or disability-related is now counted within the health and disability section of the benefits bill. Some of the increase just isn’t a real increase in spending – it’s simply a case of moving the spending around between different sections of the benefits bill, and therefore a really misleading way to present the figures.
However, the different ways of counting numbers don’t account for everything. Part of the reason there is such a big discrepancy between apparently sky-rocketing health- and disability- benefits and flatlining spending on benefits overall is that spending in other areas of the benefits bill is actually decreasing.
The main message is that the welfare bill is clearly not ‘out of control’, if we look at the whole spending rather than just focusing on part of it. We could argue that a rising percentage of the bill being spent on people facing barriers to work because of ill health and disability is evidence of better targeting of social security.
Isn’t it unfair that people with health conditions who are out of work get so much more money than others on out of work benefits?
People who are placed into the Limited Capability for Work Related Activity group after the Work Capability Assessment (these are the group judged to have the least capacity for work, and the group is also sometimes called the ‘support group’) get £416.19 per month as an additional ‘health’ payment. People placed into the Limited Capability for Work group (who are judged to be able to do undertake some activities in preparation for returning to work) do not receive any extra payment under current UC rules.
Despite the extra money, recent research from JRF found that people receiving health-related UC payments were still much more likely than those receiving non-health-related UC to be going without essentials such as heating and sufficient food. 75% (three quarters) of people receiving health-related UC were going without essentials, compared to 67% (two thirds) of people receiving non-health-related UC. https://www.jrf.org.uk/work/unlocking-benefits-tackling-barriers-for-disabled-people-wanting-to-work (these statistics are in section 3 of the report).
The additional money paid to people receiving health-related UC is entirely appropriate. In fact, it is still not making up for the additional deprivation this group of people face.
What about the ‘welfare trap’? Doesn’t giving people in groups judged to have the least capacity for work extra money create a ‘perverse incentive’ for people who don’t really need to be in those groups to claim they should be?
The government argues that the proposed changes to out of work disability benefits are necessary because the current system contains ‘perverse incentives’ that encourage Disabled people and people with long-term health conditions to take the Work Capability Assessment and to try to get into the highest possible category of need, the ‘Limited Capacity for Work Related Activity’ (LCWRA) or ‘Support’ group, where they receive an additional payment on top of the standard UC amount, even if they could potentially do some part-time work.
However, research shows that the increased payments for people in the LCWRA group are not the main incentive for claiming UC Health. Research conducted by the Joseph Rowntree Foundation (JRF) and Scope in 2024 found that only 20% of people who claimed health-related UC knew how much extra they would receive if they were placed in the LCWRA group before they applied, and almost 50% did not know they would be eligible for any extra money at all. Instead, many of those claiming did so to avoid the stringent conditionality and potential sanctions they would be subject to if they were not put in the LCWRA, which they feared would force them into work that they could not do and that would harm their health. See Scope and JRF, Making benefits work: improving support for disabled people, p39 https://www.scope.org.uk/campaigns/making-benefits-work-report and JRF and Scope, Unlocking benefits: Tackling barriers for disabled people wanting to work, section 4 https://www.jrf.org.uk/work/unlocking-benefits-tackling-barriers-for-disabled-people-wanting-to-work
Reducing benefits is also not necessary to get Disabled people to engage with employment support. People in the LCWRA group are already eligible for some government-funded voluntary employment support programmes, and these could be expanded without cutting payments.
The most impactful way that government could encourage LCWRA group members to engage with these services would be to remove the threat of losing benefits if they try a job and it doesn’t work out, by providing a guarantee that people in this group could return to the benefits system, on the same payments and without a reassessment, for two years if they had started a job but found they were unable to do it. The ‘right to try’ included in the Green Paper does not effectively tackle the problem, because it only guarantees that starting work won’t automatically trigger a reassessment – it does not ensure that people will be able to return to the social security system without a reassessment if the job turns out not to be accessible after their claim has ended.
Disabled people are already highly incentivised to get jobs. Surviving on benefits is hard, because levels are clearly insufficient. The Trussell Trust recently released figures showing that 77% of people who receive health-related Universal Credit and PIP are nevertheless going without essentials such as heating or sufficient food, and one in five are regularly using food banks: https://www.trussell.org.uk/news-and-research/news/almost-one-in-five-people-receiving-universal-credit-and-disability-benefits. We do not need more ‘incentivisation’ to work, we need work to be made accessible to us.
How come the increase in health-related out of work claims starts to happen before the pandemic?
Health- and disability-related out of work benefits claims reduced between 2008 and 2013, and then stayed almost flat until 2018. However, they started to increase significantly again in 2018/19, which is before the pandemic and therefore before the nation’s overall health was affected by Covid-19. Some people argue that this means the increase in 2018/19 is evidence of people inappropriately claiming health-related out of work benefits. There are two main arguments we can make against this claim:
Firstly, the transition between ESA and UC, which began with pilots in small areas in 2013, started affecting the benefits system on a large scale from 2018. UC counts claimants differently to ESA, and the differences cause a substantial number of cases that would not have been considered to be health- and disability-related out of work claims under the ESA rules to be counted in the UC figures. This artificially inflates the numbers of health-related UC out of work claims. It is unlikely to be a coincidence that the increases in the out of work disability benefits claims statistics first appear in 2013 but only grow substantially in 2018, precisely following the rollout of UC.
However, these factors don’t account for the whole increase in 2018/19 – DWP figures suggest they explain about 50% of that year’s increase. Some of the other 50% can be explained by the fact that problems with public health did not start with the pandemic. The UK went into the pandemic with falling life expectancy and public health indicators, partly as a result of a decade of austerity measures, which had degraded the health system. Waiting lists for treatment had ballooned, leaving many people waiting for healthcare that could enable them to return to work. See, for example, the British Medical Association’s report ‘The impact of the pandemic on population health and inequalities,’ which sets out the situation on the eve of the pandemic: https://www.bma.org.uk/media/bzxla0fv/bma-covid-review-report-5-september-2024.pdf.
Can’t disabled people all just get remote jobs in the post-pandemic era?
Truly remote jobs are still rare. Claire from Difference North East, a DPCG member organisation, recently investigated the DWP national jobs board. She found only 21 fully remote positions with ‘Disability Confident’ employers in the entire country. See https://differencenortheast.org.uk/dwp-job-search-fails-disabled-jobseekers/
Remote jobs also tend to have higher qualifications requirements, which is fine for some Disabled people, but challenging for those who did not receive appropriate provision during their education and therefore have low levels of qualifications.
My MP says 90% of PIP recipients will keep their payments. Is this true?
This figure comes from a statement made by Minister for Disabled People and Social Security Stephen Timms MP in parliament: ‘The assessment published yesterday is that 90% of those receiving the daily living PIP component will continue to receive that benefit after the changes take effect’. Timms’ numbers are based on the impact assessment for the Green Paper, and they are correct in a very technical sense; however, when looked at more broadly they are misleading because they massively understate the impact.
Here is an explanation of how the Minister came up with the 90% figure:
The Office for Budget Responsibility (OBR) predicts that 370,000 current recipients of the PIP daily living component will lose their award because of the new rules, and a further 430,000 new claimants who would have been awarded PIP daily living under the current rules will be denied it once the requirement to score 4 points on a single descriptor is brought in. The Minister seems to have taken only the figure for the current recipients who will lose awards (370,000) and divided it by the current total number of PIP claimants (3.7 million) to calculate that 10% of current claimants will lose their awards.
This is correct as far as it goes, but it implies that current recipients who lose their award are the only people who will lose out. This is obviously untrue, as an even larger number of future claimants will also be refused PIP. Other government ministers have used Timms’ figures to argue – incorrectly – that the number of people affected by the proposals will be just that 10% of current recipients who lose their award.
However, there are also further problems with the claim that 90% of current recipients will retain their award. OBR figures show that 58% of people recently awarded the PIP daily living component for the first time (‘onflows’) did not score 4 points on any single descriptor in their assessment, which means they would not qualify under the new rules, and 52% of people recently awarded the PIP daily living component in a review of their claim also did not meet the new 4-point rule. And in response to a recent Freedom of Information request made by Disabled activist Martin Bonner the DWP revealed that 87% of people who currently receive the lower rate of the PIP daily living element did not score 4 points on a single descriptor in their most recent assessment, while 13% of people receiving the enhanced rate also did not. All these people would be a risk of losing PIP when they are next reassessed – potentially over 1.5 million people – and the DWP FOI response suggests that the proposals could practically wipe out the lower rate of PIP daily living.
So why does the OBR predict that ‘only’ 800,000 people will lose their PIP award, rather than 1.5 million+? The OBR assumes that people claiming PIP (and those helping them to do so, like benefits advisors) will change their behaviour, increasingly trying to ensure they score 4 points on at least one descriptor. Ultimately, this will mean that the percentage of current recipients meeting the 4-point rule will increase. However, this change of behaviour could not possibly happen immediately, as it will take time for people to learn about the new criteria and how to satisfy them. As a result, it is likely that many current recipients who ultimately keep their PIP award will only do so after being initially refused and then having to undergo an appeals process, which we know is highly traumatic, and during which they will have no means of covering their disability-related expenses. To argue that these people do not need to worry because they will ‘keep their award’ is disingenuous.
The DWP impact assessment said that only 250,000 people will be pushed into poverty by the proposals. Why do you say it will be more? Shouldn’t we use figures that have been approved by the OBR?
The OBR’s figure of 250,000 people pushed into poverty is the net effect of all the proposals for benefits changes in the Green Paper. Three separate impacts are given:
The changes to the PIP assessment will result in 300,000 people, including 50,000 children, being pushed into poverty.
The changes to the UC Health element will result in 50,000 people (all adults) being pushed into poverty.
Reversing the previous government’s plans to change the WCA assessment, through which claimants qualify for the UC Health Element, will result in 150,000 people, including 50,000 children, moving out of poverty.
The net result is calculated by subtracting the 150,000 people moving out of poverty due to cancelling the WCA changes from the approximately 350,000 – 400,000 people being pushed into poverty by the other proposed measures (the numbers don’t add up very well because the figures presented are all rounded to the nearest 50,000).
However, the former government’s proposed changes to the WCA were never made, and Labour had not previously stated that they would press forward with them. In fact, a legal challenge against the consultation on which the proposed changes were based was successful, which means it would have been difficult for the Labour government to enact them. It is therefore extremely misleading to use the cancellation of these proposed cuts as the baseline for the poverty impact assessment. Instead, the baseline should have been the current situation.
A true assessment of the poverty impact is difficult to make based on the figures that have been given, because some people will be affected by the cuts to PIP and the cuts to UC Health, so we can’t just add together the poverty impacts from both programmes (as this would lead to counting some people twice). However, it is clear that the policies will cause at least 150,000 more people to be pushed into poverty than the figures the OBR and government are reporting.
The impact assessment doesn’t include the positive impacts from the Green Paper’s initiatives to help Disabled people get jobs, so it’s not representative and the outcome won’t really be that 250,000 Disabled people will be pushed into poverty.
Contrary to expectations, the OBR did not include an estimate of the number of people who are likely to move into work as a result of the Green Paper policy changes and £1 billion investment in employment support services in the Green Paper impact assessment. According to the OBR, this is due to ‘insufficient information from the Government on the policy details and analysis of their likely economic effects.’ The OBR will release their assessment of this element of the proposals at the next statement event, in Autumn.
It’s therefore true that we can’t currently give an accurate assessment of any potential positive impacts on employment among Disabled people that may be caused by the investment in employment support. However, existing evidence clearly shows that the £1 billion investment is insufficient to mitigate the harm of the other Green Paper measures. Recent evaluations of the government’s Health-led Employment Trial showed that the cost was approximately £1,500 per client and, in the best performing site, just over 20% of clients achieved 13 weeks or more of employment. (In other sites the results were substantially worse.) If the numbers from the best performing site were replicated, the £1 billion investment could support approximately 130,000 people to find at least some work, although not necessarily sustained employment.
The Institute for Fiscal Studies and the Joseph Rowntree Foundation both estimate that the £1 billion is only likely to cause ‘tens of thousands’ of Disabled people to move into employment. Meanwhile, 3.8 million Disabled people will be financially worse off because of the measures, and hundreds of thousands will be pushed into poverty.