On 8th February I suggested that some groups might reasonably be exempted from the process of reassessment for ESA, and mentioned in particular “young people with severe disabilities from early ages or people with defined conditions like cancer”. The recent statistical release tells us that these groups have a quite different profile from most other claimants. As things currently stand 12% of all claimants are being placed in the “support group”, those who are not expected to work. In the case of “neoplasms”, or cancer, that rises to 67.7% of assessed claims; in the case of “congenital” or “chromosomal” conditions, it is 66.7%.
Category: Social security
This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.
ESA Appeals
I have been looking at the January 2012 statistical release for the review of Employment and Support Allowance. According to the tables
- 1,023,000 claimants have been reassessed (table 1a)
- 622,000 have been found fit for work (table 1a)
- 521,000 of those found fit for work have appealed (table 3), and
- 38% of those cases heard so far (80,000 out of 210,000) have been successful (table 3).
The implication is that we are are looking at a very large number of decisions that are provably wrong – more than 30% of all decisions that people are fit for work. The DWP and claimants have been forced through an expensive and time-consuming appeal process to set things right. This is a shambles.
Further note. I have amended this entry to remove a predictive figure. This was a quick, back-of-the-envelope calculation. I’ve been delighted – but taken aback – by the interest that my guesstimate attracted, but the more I look at it, the less confidence I have in any possible prediction I might make. In particular,
- the rate of decision-making has slowed,
- the statistical information in the tables does not cover the same time periods, and none of the information is particularly up to date
- the level of new appeals seems to be falling
- the success rate seems to be falling, and
- as gwenhwyfaer comments, large numbers of appeals appear to be disappearing from the process without explanation, and I cannot assume that they will eventually have decisions made.
The crime of forming a relationship
This is from a press statement by Lord Freud, reported today.
Pretending you are a single parent to get benefits when you are actually living with a partner is stealing money from the people who genuinely need help. Sometimes these claims can be fraudulent from the outset, but often a person’s circumstances change gradually and they don’t tell the Department. Either way, it is a crime and one we are determined to put a stop to.”
So gradually forming a relationship, and not knowing quite what the position is, is a crime.
Freud goes on to say:
Universal Credit will simplify and automate the benefits system to make it less open to abuse and ensure this money is going to those who need it the most.
It is hard to see how the introduction of Universal Credit will make a difference to the situation – with one main exception. In the past, claimants have only been liable to repay benefits if they have failed to disclose a material fact. Universal Credit is going to include measures to allow the government to recoup overpayments, irrespective of whether or not a claimant has reported their circumstances, or whether they can reasonably be expected to know or understand that an overpayment has been made.
The review of provision for mortgage interest
In December, the government issued an informal call for evidence about mortgage interest relief. There are still two weeks left of the consultation period. By comparison with the costs of Housing Benefit, which pays a substantial proportion of rent, the cost of mortgage interest payments (£400m) is limited. In just about every case, people who become entitled to it have received much higher incomes, and the issue of incentives to work hardly seems to apply.
Mortgage interest is part of a system of social protection; the aim is to make sure that people are insured against radical changes in circumstances. The government is rebuilding the welfare system around a very different kind of model, which emphasises safety nets and incentives to work rather than the need to protect people. The system stopped protecting owner-occupiers effectively when mortgage interest was withdrawn for most of them; there has been a growth of mortgage protection plans to make up for the deficiency. An important concession to growing unemployment has been the reduction of the waiting period, which had been extended to 26 and in some cases 39 weeks, back to 13 weeks. Among the ideas that are now being canvassed are a two-year time limit for the receipt of help, which would force people to move house, and a charge against the property that could be realised on resale, which may force them not to. Neither fits the the easy certainties which have characterised some other announcements about the plans for Universal Credit. The government is discovering, slowly, that there are different principles for different cases, and that one size does not fit all.
HMRC
Attacking HMRC on a range of issues, a Times editorial comments: “Tax Credits have repeatedly been overpaid because changes in individual circumstances occur too frequently for the bureaucracy to keep up.” That’s quite true. But the Universal Credit scheme, contained in the Welfare Reform Bill currently passing through Parliament, relies centrally on the principle that it will be possible to respond to changes in people’s needs as they happen, “in real time”. It is not possible now, and it is not going to happen like that.
The government has sidled away from the promise of a computer system that will cope with everything – no system could be expected to record changes in household circumstances as they happen. What they are currently relying on is the development of a faster PAYE system, which generally depends on income coming from employment. Changes to overpayment rules mean that claimants who are overpaid will have to repay money regardless of whether they could reasonably have known they had been told the wrong thing or were being paid the wrong amount – a situation which the Ombudsman has previously criticised for the instability it creates for low-income households.
Reassessing claims for ESA
The reports of delays in access to Employment and Support Allowance are unsurprising. The finger of blame has been pointed at Atos Healthcare. Atos has been the subject of a barrage of criticism during the last couple of years; their processes were described by the Harrington report as “mechanistic” and “impersonal”; many of the decisions made about fitness to work are wrong and 40% of appeals have been successful. Atos has issued a statement attributing the delays to the longer, more sensitive assessments introduced since Harrington.
There is however a more general issue about the capacity of the administration to deal with mass reassessment. Governments have not just undertaken in recent years to reassess all the former claimants of incapacity benefit; they also propose to introduce equivalent tests for the Personal Independence Payment, the reformed Disability Living Allowance. As people with disabilities are displaced from the labour market, and as the government requires further categories to be ready for work, including lone parents and those who are bereaved, the demands on the system of reassessment will increase. Current calculations on throughput rely heavily on people not turning up for the assessment.
There are some practical ways of relieving the burden of administration. One is to exempt more groups – such young people with severe disabilities from early ages or people with defined conditions like cancer. Another might be to offer compensation to some people to transfer to JSA voluntarily. A third might be to license a range of independent practitioners to certify the assessment. The procedure needs to be faster as well as fairer.
Stigmatising disability
The stigmatisation of claimants with disabilities is not a new phenomenon – people with disabilities have always prompted a combination of apprehension, mistrust and vilification. Precisely because it is deep-rooted in society, it can be dangerous. Governments which are critical of vulnerable groups are liable to legitimise the process of social rejection and exclusion; in the worst cases, they can exacerbate the process. That is behind the concern expressed by certain charities in a recent Guardian report.
Social security benefits for people with disabilities are not provided for a single purpose. They are provided for many reasons – among them, need, low income, social protection, compensation, earnings replacement, social inclusion and rehabilitation. Part of the problem with “othering” disability – and indeed, part of the problem with treating disability as an issue in identity politics – is that so many different issues are folded up together. Anyone can become disabled; it can happen suddenly as well as gradually. A benefits system needs to protect people from the things that might happen to them, and a system which excludes disability fails in several of its primary purposes.
Stimulating the economy: a partly baked proposal
I have written before about plans to inject money into the economy, and for the present I am going to leave aside the arguments for and against doing it. The Conservatives are pleading for tax reliefs; Liberals, for a rise in the tax threshold; Labour, for a cut in VAT and more quantitative easing. The question I want to address is a simple one: what is the best way to inject money into the economy?
There seem to me to be three main criteria. The first is effectiveness: the money needs to arrive in places where it will stimulate the economy. Too often in the past, indiscriminate financial stimuli have led to inflationary demand or to money leaking abroad. Second, there needs to be some consideration of the distributive impact. Third, the stimulus has to be practical: one of the reasons why Labour went for a VAT cut was that it could be done immediately, when changes to income tax would have been much slower. Cutting income tax fails on all three criteria. VAT meets the third criterion; it has limited benefits for the second, because VAT is only slightly regressive; and it fails on the first.
Some benefit payments could serve more effectively as a stimulus than tax cuts could. Although there is a case for higher benefit levels in general, the implementation would be too slow and complex, and it would be politically controversial. It is however feasible to make additional payments to the recipients of certain benefits. Child Benefit goes to every family with a dependent child; Winter Fuel Payment (disregard the label!) is an ad hoc payment to every older person. In other words, the administrative mechanisms exist to deliver one-off payments directly and rapidly to individual households. The distributive effect would be generally progressive (it could be made more progressive still if the payments are treated as taxable); and it would lead to an immediate, localised stimulus to spending that would fall roughly in proportion to the prevalence of deprivation. And if such payments happened to do a little to alleviate child poverty, that is a side-effect I think we should be able to bear with equanimity.
Widowed Parent's Allowance: closing down national insurance
There are so many dimensions to the benefits system that it is easy for smaller parts to be overlooked, but the Government is leaving no stone unturned. The payments made for widows and widowers are no longer quite the same as they were after the Beveridge report, but they are one of the last vestiges of an insurance system where people paid contributions to protect themselves against certain contingencies and were protected by the principle of insurance. Last month, the government issued a consultation paper proposing a reform of bereavement benefits. The consultation paper comments that these benefits tend to have been overlooked when other benefits have been reformed, and aims to bring it into line. In this case, the particular target is the Widowed Parent’s Allowance, which is payable as an insurance benefit, regardless of other income or earnings. The numbers claiming it have been falling – with only 99,000 claimants, all bereavement payments come to about 40% of what they were ten years ago. The consultation paper complains that the existence of WPA can lead to long-term dependency. “The ongoing nature of payments under Widowed Parent’s Allowance, which can continue for up to 20 years in extreme cases, without any encouragement to maintain contact with the labour market, risks creating welfare dependency.” The argument seems to be that an insurance based pension might encourage a select group of people to withdraw from the labour market – but if that is so, why are these criteria not applied to occupational pensions? What it comes down to is simple enough: this government does not believe that the state should provide insurance, and is not content to have benefits which are designed on that basis.
The consultation is open until March 12th.
The cap
The government’s proposal to cap the total amount a household can receive in benefits seems to have caused some confusion, among opponents as well as proponents. The cap gives the impression that benefits are much more generous than they are; the DWP estimate is that this will affect 67,000 claims out of 5.5 million. Neither disability, nor having a large family, would be enough to explain why some people might have an income level over £26,000 a year. The main element in the calculation has to be coverage for housing costs, either in the form of rent or interest on mortgage repayments.
The government has said that no-one will be poor because of the cap. That must be true, because if poverty is defined in terms of median income, anyone receiving median earnings (which are higher) is going to be defined as not being poor. The misleading part of the statement rests in the assumption that benefits are only there to respond to poverty. One of the fundamental principles of social security is captured in the word “security”; it’s about social protection. People who become sick, disabled or divorced should not have to strip themselves of assets in order to claim benefits. People who live in expensive houses are not forced to move out of them – or have not been up to now.