The background
The Paralympic athlete and cross-bench peer Baroness Grey-Thompson is the latest member of the House of Lords attempting to force the government to put the brakes on plans for reforms to disability benefits.
Ministers want to scrap Disability Living Allowance (DLA), a cash payment given to disable people with care and mobility issues regardless of their income and job status, and replace it with the Personal Independence Payment.
At the moment, around 3.2 million people claim DLA but that number is projected to rise to 3.5 million by 2016.
Ministers says the taxpayer can’t afford to carry on paying an allowance that is not automatically dependent on medical assessments, and the Department of Work and Pensions (DWP) is proposing to bring in regular checks for the new benefit.
There have been a number of contentious claims made by the government and by opponents of the bill in recent days. Let’s look at them one by one.
The claim
“There is very clear evidence that there is some £600m every year going out in overpayments.”
Maria Miller, 17 January 2012
The Minister for Disabled People refers to research done under the previous Labour government.
A 2005 review of DLA found that £630m worth of DLA was being paid out every year to people whose health had improved to the point where they no longer needed the money.
But, as Ms Miller also pointed out, some £190m was also being underpaid. Some disabled people had seen their conditions decline gradually but had not realised they were now eligible for DLA.
So the government was making an estimated net overpayment of about £440m, according to the research.
Since ministers are proposing to deal both with under- and overpayments by reforming the assessment procedure, that’s probably a more accurate figure to use.
“They plan to cut the Disability Living Allowance budget by 20 per cent despite the fact that only 0.5 per cent of claims are fraudulent. This means that one in every five genuine DLA claimants will be losing out.”
UK Uncut
It’s true that outright fraud among sick and disabled claimants is low.
The latest figures show that only 0.5 per cent of DLA claimants were fraudulent in 2010/11. The other major illness-related payout, Incapacity Benefit, was even lower at 0.3 per cent. By contrast, fraud is thought to have accounted for some 4.1 per cent of Jobseekers Allowance claims last year.
But that’s not the government’s point. The “overpayments” aren’t down to fraud, but due to the fact that people’s conditions can gradually improve, but they have no legal duty to inform DWP of their change in circumstances, and there is no automatic reassessment of claimants.
The government doesn’t say these people who are receiving overpayments are doing anything illegal. They just don’t need the extra money any more, but the system allows them to keep on receiving it.
That’s the kind of thing the department wants to stop from happening in the future by introducing regular reassessments, so claimants’ medical progress will be checked regularly.
“It isn’t a 20 per cent cut.”
Maria Miller, 17 January 2012
The minister is right when she says the proposal does not represent a 20 per cent cut to the current DLA bill in real terms.
The government is proposing that the total DLA bill will be 20 per cent less in 2015/16 than it would have been if current trends had been allowed to continue.
DWP projections are that the total amount of money paid out on the allowance will rise from today’s figure of £12.6bn to more than £14bn by 2015/16 if nothing is done. But by that year the government only wants to be spending £12bn – a one-year saving of more than £2bn on the projected figure, according to DWP documents.
At time of writing, it remains unclear how the government attempts to make the two key numbers match up. On the one hand, it says there are only about £440m (at 2005 prices) of savings a year to be made by making sure only the people who need the allowance get it.
But the aim of the reforms, according to the latest forecasts from DWP, is to save £2.8bn over three years.
Logically, the only way to do that is to reduce significantly the amount that “genuine” claimants receive or raise the bar so that a smaller number of people with severe disabilities will be able to claim.
The government has not yet said how much new claimants will get or what the initial assessment will look like.
“This is being rushed through to meet Treasury targets.”
Lord Colin Low, president of Disability Alliance, 17 January 2012
Leaving aside the question of whether the Bill is being rushed, it’s undeniably true that Treasury cost-cutting is pushing the reform agenda.
The DWP has simply been told to make the 20 per cent saving on the projected DLA bill.
That number has nothing to do with an estimate of the needs of disabled people – which were not even mentioned by the civil servants who wrote the final impact assessment on the proposed changes – and everything to do with reducing the budget deficit.
By Patrick Worrall
