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.

People who have never worked

One of the recurring myths in the British social security system concerns generations of families who have never worked. The issue has been the subject of recent correspondence on the JISCmail list on Social Policy.

There are relatively few households in Britain where there are adults of working age that consist entirely of people who have never worked. The DWP has issued statistics for households and for individuals; this applies respectively to 1.7% of households of working age (about 350,000 households) and 1.4% of individuals. More than a third in both categories are adults under the age of 25.

The primary determinant of worklessness is the economy, and variations in the economy over time mean that the experience of previous generations is hardly ever the same as that of the current generation. Forthcoming work for the Rowntree foundation by Rob Macdonald, Andy Furlong and Johann Roden compares the search for “three generations who have never worked” to the hunt for the Yeti.

Are claims for incapacity out of control?

There’s been a lot of confusion about the stats issued for Incapacity Benefit, which was recently replaced by Employment and Support Allowance. The IB stats seem to show an increase of over a million people since the revision of the system in the mid -1990s. The Daily Mail reports that the figures trebled after 1979. That seems initially plausible, because we might expect incapacity to rise in line with unemployment, but it’s not actually true. In 1979, the principal benefits covering people now covered by ESA were Invalidity Benefit (contributory), Supplementary Benefit for people who were sick or disabled (means-tested) , Non-Contributory Invalidity Pension and Sickness Benefit. There were 1,463,000 claimants for those four benefits in 1979. There was a reduction in the early 80s when Statutory Sick Pay came in, and then a lesser increase when Severe Disablement Allowance replaced NCIP. The big increase for people with incapacities happened in the 1990s, and it mainly occurred in Income Support – the means-tested benefit – rather than in Incapacity Benefit. Incapacity Benefit figures may also have seemed to increase, but that was mainly because Sickness Benefit was taken into it in 1995, and Severe Disablement Allowance was rolled into IB for new claimants in 2001 – those inclusions probably account for 250,000 extra claimants.

The figures in contemporary reports have been retrospectively revised between 1997 and the present, in the apparent belief that people will find the numbers easier to understand that way. Unfortunately it’s led people to believe that claims have rocketed, when they haven’t. I’ve had to piece these figures together from different sources, which always raises questions about consistency, but subject to that, here are the counts in 000s of claimants for 1998, 2003 and 2008.

1998 2003 2008
Incapacity Benefit 1618 1586 1413
Severe Disablement Allowance 376 331 281
Income Support for sick and disabled people of working age 881 1100 1191
Total 2875 3017 2885

Sick note Britain?

A report by Carol Black and David Frost makes proposals that are supposed radically to reduce the flow of people moving on to Employment and Support Allowance. The argument that this can be done is built on the belief that the initial response to illness makes it more likely that people will adjust to long term sickness by claiming benefits. However, the most substantial reduction that is foreseen in the report is in the numbers of people who move directly to long-term benefits without going to employment in between. This group includes people who would formerly have claimed Severe Disablement Allowance.

Despite the reports about “sick note” Britain, benefits are not in general issued with sick notes – or “fitness for work notes” as we must now learn to call them. GPs didn’t, in general, get to sign people onto Incapacity Benefit, and they don’t sign people onto Employment and Support Allowance. However, there are some exceptions. If a person is not entitled to Statutory Sick Pay, typically because their employment has been terminated, they will be put onto ESA directly. If they have certain illnesses, principally terminal illness and life-theatening conditions, there may be no requirement to undergo a Work Capability Assessment. Those exceptions will be maintained. The main proposal in the report is that such claimants should move directly to the WCA. It is not immediately clear how this procedure is going to deliver a substantial cut in the number of successful claims.

Mis-reporting fraud

The BBC has been making some seriously misleading statements about fraud. A recent Panorama programme took people parking in “disabled” spaces and failing to occupy social housing as evidence of fraud. One claimant was filmed cycling; one was playing golf; another was gardening. People who claim incapacity benefit can indeed be found on occasion to take physical exercise. That is not evidence that their claim is fraudulent. People with mental illness, for example, may be fully able to use their bodies. People with restricted mobility may well be encouraged by their doctors to take exercise. The benefits are about the ability to work, not to walk. And people might have some personal wealth; some of the benefits are not means tested.

The bullying, censorious tone is made worse by mispresentation – for example the claim that fraud is costing £22 billion, when the DWP estimate for fraud is £1.2 billlion. The figures are reviewed by Ben Baumberg in a lucid posting at this address. For a more detailed consideration, view the sample chapter from How Social Security Works.

The length of claims

Results from the Work and Pensions Longitudinal Study are now available; the full spreadsheet is in a table. This shows the length of time of claims of different benefits for people of working age. The key figures are:

All claimants 1 year or less 10 years or more
All 4,744,510 1,770,930 1,019,620
JSA 1,328,910 1,111,110 1,050
ESA and incapacity benefits 2,586,420 421,790 922,930
Lone Parents 648,300 171,370 65,910
Carer 110,490 26,500 23,130
Others on income related benefit 70,390 40,150 6,600

Most claimants claim for less than two years. About a fifth of working age claimants are there for the very long term and about 90% of them are on incapacity benefits, which includes long term chronic disability. There is very little evidence of longer-term dependency if that group is excluded – there are very few long term claimants who are not incapacitated. There is no support in these figures, then, for the idea that people are being trapped in long term dependency by lack of incentives.

Universal credit: interim developments

The pattern of Univeral Credit is slowly taking shape, though there are still large gaps. A series of briefing notes have been published, with the latest batch on 10th October – getting on for a year after the scheme was announced. Recent announcements have told us, for example, that Carers Allowance will be paid separately, rather than being integrated into UC; that child care costs will continue to be paid, on something like the present basis (though reduced); and that there will be higher suppot for some long term claimants.

An important new departure, however, is that there will sanctions, for the first time, applied to people who are working but not earning at least the equivalent of a full time minimum wage. Those people will be encouraged to look for additional work, and may be required to accept it. This provision is likely to affect women in particular, who are more likely to be on low part time earnings. The details are in Briefing Note 13.

Reassessing people on Incapacity Benefit

One and a half million claimants of Incapacity Benefit are currently being reassessed prior to transfer to the Employment and Support Allowance. On 27th April, a DWP press release explained that most claimants who were being reassessed were either being found fit for work, or failing to complete the assessment process. Neither finding should be taken to imply that claimants are malingering. Incapacity Benefit is a provision for long-term sickness; it is not confined to people with permanent conditions, and many do get better over time. The statistics can be viewed at http://research.dwp.gov.uk/asd/workingage/esa_wca/esa_wca_25012011.pdf. There are high rates of non-completion of the process, for example, for people with infective diseases, injuries, or pregnancy. That is exactly what we should expect. More worrying is that many people are being found fit for work when they have serious medical problems, such as cancer, incontinence or degenerative diseases. Part of the problem here is the process of reassessment, which has been criticised for being impersonal, mechanistic and insufficiently informed by medical evidence; but part is the nature of the work test, which looks not at whether a person’s ability to work has been impaired, but at whether that person is deemed to be able to do any sort of work, anywhere. People who contract serious disorders need protection – time, space and support. All the emphasis in the new system falls on pressing people to return to work.

It is disturbing, too, that the release of this information should have been managed deliberately to paint benefit recipients in a negative light. A government statement on 21st April criticised the 80,000 claimants whose main reason for incapacity was alcoholism, drug use or obesity. It seems that people who do these things sometimes become ill as a result; the only noteworthy thing about that finding is that the government should want to draw particular attention to it. The information released on 28th April had been previously released in a press release in January, when it was announced in similar terms. This is beginning to look like a propaganda campaign.

Capacity for work

I have been in correspondence with Carer Watch, a network of carers which has raised concerns about the tests used for Employment and Support Allowance. ESA is available for people who cannot reasonably be expected to work – the issue of reasonableness is part of the statutory definition of the benefit. Nevertheless, the legislation has introduced a series of tests, including work-focused interviews and “action plans” related to work seeking, which make work-related demands on people who cannot be expected to work.

I think there is a discrepancy between the Welfare Reform Act 2007 and the regulations. People who have limited capacity for work are supposed to be given help in moving towards employment, for example by preparatory and supportive actions. However, the regulations focus on actions that are directly related to work, rather than on actions that will increase people’s capacity where that capacity is limited. They are specified in terms of either getting people to obtain work, or of keeping people in work. Either of those options, by definition, is not reasonable for ESA claimants.

A failure to consult

The government produced its Welfare Reform Bill on 17th February, containing provisions for Universal Credit, the extension of sanctions against unemployed people, and the abolition of Council Tax Benefit and Disability Living Allowance. It is now clear that Universal Credit will be a portmanteau benefit rather than a true simplification, with distinct rules for Jobseekeer’s Allowance, Employment and Support Allowance and Housing Benefit.

Most of this had been signalled, in advance, though for the second time the Secretary of State has jumped the gun on a consultation. Universal Credit was announced in November before the consultation on the proposals had closed; the abolition of Disability Living Allowance was announced with two days left of the consultation period.

The government’s disregard for the process of consultation means that it has been making avoidable mistakes. In the case of Universal Credit, it has left several loopholes and ambiguities unclosed: it is still not clear what will happen to childcare costs or how council tax rebates will be taken into account. In the case of the replacement of Disability Living Allowance by Personal Independence Payments, the position is vaguer still. The government was particularly concerned about the increase in claims for DLA. Most of that increase reflected its growing use by people with psychiatric problems, but the proposals for replacing the care component with an allowance for daily living fail to consider the issue of psychiatric problems at all. The consultation returns would have warned the government of what it still needed to tackle. The rush to judgment is foolish, and the reform looks ill-considered.