Test for new £6 billion disability payment is flawed
13 July 2011
The Government risks a costly welfare mismatch by using a flawed assessment system to calculate as much as £6 billion of payments for 1.8 million disabled people, according to disability charity Scope (1).
As part of the Welfare Reform Bill – set for a second reading in the House of Lords on 19 July – the Government plans to replace Disability Living Allowance (DLA) with the Personal Independence Payment (PIP).
DLA was introduced in 1992 because day-to-day activities cost more if you are disabled. The Government says its aim is to “ensure support continues to be focused on those who face the greatest challenges to taking part in everyday life.” (2 - DWP)
The warning follows a meeting on Tuesday between disability charities and the Minister for Disabled People Maria Miller where concerns were raised.
DWP briefings show that the assessment will be based on the “impact of a health condition or impairment on an individual’s ability to carry out a range of activities which are fundamental to everyday life”. (5 - DWP)
However, a note sent by Scope to the DWP and made public shows assessing the impact of impairment in a limited range of everyday activities will tell you little or nothing about the extra costs a disabled person faces.
Drawing on original analysis by Scope and Demos, the document argues that that the test also needs to look at a range of extra, often prohibitive costs including:
- Costs as a result of living in unsuitable or poorly adapted housing
- Costs of not being able to access public transport and having to pay for private hire to run basic everyday errands
- Costs of not having friends or neighbours to provide support or help with household tasks and care needs
- Costs that come from being employed or undertaking voluntary work
Each of these factors creates extra costs for disabled people that may not be connected to the impact of the impairment (6).
For example, a disabled person who was living in unsuitable housing; who was dependent on public transport; who had no informal support from family, friends or neighbours and who had little in the way of savings, may not have an impairment as severe as other disabled people, but would have significantly higher costs as a result of living with their condition.
Scope is calling on the Government to re-think its assessment so that it takes into account these extra factors.
The concern comes as stories continue to emerge of problems with the Government’s fitness for work test – used to assess who is eligible for out-of-work support (7- Scope).
The Work Capability Assessment, Scope argues, takes a similar approach in that it makes a judgement on a highly complex issue (in this case ability to work) by assessing the impact of impairment in a limited range of everyday activities.
Latest DWP figures show the high rate of appeals for the assessment (8).
Richard Hawkes, Chief Executive of Scope, calls on the Government to avoid making the same mistake twice.
He said: “DLA needs to be reformed – but assessing the impact of impairment in a limited range of everyday activities will produce a ‘guestimate’ that won’t tell you anything about how much more it costs a disabled person to live their lives.
“PIP is in danger of being a poorly targeted payment, which will see many disabled people, especially those with less complex impairments but high disability-related costs, losing out on vital financial support.
“The Government made exactly the same mistake with the WCA – an over-simplistic test to work out who was fit for work. Since its introduction there have been many examples of people being wrongly assessed.
“We urge the Government to reconsider the draft criteria proposed for the PIP assessment and instead look into developing an alternative model that is much more multidimensional in scope and accounts for the social and environmental factors that contribute massively to the extra costs of living with a disability.
“Not only will this ensure the DWP avoids a costly welfare mismatch, but by accurately targeting the money at those who need it most the system will save money in the long run.”
Notes to the Editor:
For more information, spokespeople and case studies please contact Daniel Mazliah in the Scope press office on 020 7619 7203 or email email@example.com
1 – The budget for PIP
The DWP has talked about DLA expenditure being £12 billion - see Liverpool Echo.
But, actually, the reforms are only targeting working-age claimants. For this cohort, the expenditure for 2010-11 has been calculated as £6.6 billion.
The Government is seeking to reduce working-age DLA spending by 20% in 2015-16 – effectively keeping it at 2009-2010 levels.
Looking at the graph here, this means keeping it at around £6 billion.
There are around 1.8 million working age claimants of DLA - Joseph Rowntree Foundation.
3 – DWP timetable for testing assessment.
9 May: Publication of this document and a first draft of the assessment regulations.
9 May-6 June: Engage disabled people and their organisations to gather comments on this draft. Concurrently, carry out an exercise to ascertain if it is accurately and consistently assessing individuals.
Mid-late June: Revise and refine the criteria if necessary.
Mid June-1 August: Engage disabled people and their organisations for further comments.
End June-September: Test the impact of the criteria.
September: Refine the criteria further where necessary.
October: Publish a second draft of assessment regulations, reflecting changes made to the criteria as a result of refinement and testing.
4 – Scope submission to DWP on assessment.
5 - DWP paper - page 7
6. For more on how each of “Suitability of housing”; “Access to transport”; “Informal network of support”; “Employment status”; “Caring arrangements” has an impact (separate from severity of impairment) on the extra costs of being disabled (including case studies) – see Scope submission to DWP, which is based on analysis of the extra costs faced by 845 disabled people.
7 - See Maureen’s story.
8 - The latest (April 2011) rate.
The report shows: Of people who made a claim for ESA between October 2008 and February 2010 and who were found Fit for Work at assessment, 36% have had an appeal heard by Tribunals Service to date. The original decision made by DWP was overturned for 39% of the appeals.
DLA was introduced in 1992 because day-to-day activities cost more if you are disabled.
This can include anything from increased electricity bills, running medical equipment and doing laundry more often, to increased transport costs, specialist clothing and having to buy more expensive ready-made food, which is easier to cook.
Earlier this year Scope asked disabled people what DLA means to them.
The Welfare Reform Bill includes plans to replace DLA with PIP introducing a new assessment and cutting in the budget and caseload by 20%.
The Government says its aim is to “ensure support continues to be focused on those who face the greatest challenges to taking part in everyday life.” By introducing a new assessment based on the “impact of a health condition or impairment on an individual’s ability to carry out a range of activities which are fundamental to everyday life”.
The Government also proposes to remove the mobility component of DLA from people in residential care.
On this issue, Richard Hawkes added:
“At the same time removing it from people in residential care will leave people increasingly isolated, and broader plans to cut the number of people that receive it could leave many others in real financial distress.”
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