The IEA fails to understand some basic facts about disability

The Institute of Economic Affairs has published a briefing on Disability Benefits.   They claim that the cost of disability benefits could be reduced by making sure that more people with disabilities went into work.  The approach has been sympathetically reported in the Mail and the Independent.  Unfortunately, the briefing is written with a cavalier disregard for the most basic facts about disability benefits, which rather tends to undermine any arguments they wish to make about what should be done.

There are three quite simple reasons why a greater emphasis on work will not do very much.

First, disability benefits are mainly provided for people who are not part of the labour market.  Half the population with disabilities consists of elderly people (the figures used to show more than half; the 2011 census puts it at 48%).   Claims for Attendance Allowance, and a third of the claims for Disability Living Allowance, are made by older people.

Second, disability benefits are provided for many reasons which have nothing to do with work – among them meeting special needs like mobility, supporting care,  compensation for injury and even (in War Pensions)  reward for merit.  The main justification for DLA is not really to cover extra costs, as many suppose, but to compensate for long-term low incomes of people with disabilities.   None of these reasons disappears if people are in work.

Third, and following from that, many disability benefits (such as DLA and PIP) are provided regardless of people’s income or employment status.  The main benefit supporting disabilities for people of working age who are not in work is Employment and Support Allowance – and while it is true that ESA has been used to cover a hotchpotch of different circumstances, sometimes including disability, it is a sickness benefit, not a disability benefit.  Disability is neither a necessary or sufficient reason for getting it.

It’s true that the numbers of ESA claimants have persistently failed to go down, unless it is by the rather brutal approach of using disentitlement and sanctions to throw people off benefits with no income.  The main reasons why so little has been achieved for ESA claimants  are

  • the failure of psychiatric services to achieve valuable outcomes for people with long-term mental illness
  • the use of ESA as the low-income equivalent of schemes for early retirement
  • the preference of employers for employees who do not have long-term limiting health conditions
  • the penal treatment in the benefit system of part-time and therapeutic work, and
  • the perverse emphasis on individual effort to find a job, mainly focused on people who are too ill to work.

If what the IEA is saying is that more people on ESA need to work, they have about 25 years of policy failures to show that policies which try to do this are ineffective.


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