Welfare Reform or Plain Old Fashioned Cuts?
Scale of the Benefit Cuts• £18 billion of cuts to welfare benefits
• £9 billion taken out of disabled people’s households.
• Impact in Scotland = £2 billion being taken out of local economy
• IS estimate at least half of that (£1 billion) is being taken from Scottish disabled people and their families)
Impact 2011 – 2015
• Families with disabled children to lose over £3,000 each by 2015
• Couples where one partner acts as a carer to their disabled partner will lose more than £3,000 as a couple by 2015
• Individuals moved from Incapacity Benefit or Severe Disablement Allowance to JSA will lose nearly £9,000 each by 2015
Numbers affected
• The welfare reforms announced in June will see 3.5 million disabled people lose over £9.2 billion.
• Moving disabled people off ESA and onto Job Seekers Allowance will account for over half (£4.87 billion) of these losses.
• The 12 month cap on entitlement to contributory ESA will, on its own, push an estimated 1 million disabled people into poverty (equivalent to 100,000 in Scotland)
Impact on Scots Disabled People
• A disproportionate amount of the cuts are falling on benefits paid to disabled people - DLA, ESA, ILF
• Many other benefit cuts will also have a disproportionate impact because disabled people are less likely to be in employment and thus more likely to be reliant on benefits for all of their income.
• Scotland will suffer more than its fair share of these cuts because we have more people with impairments & long term health conditions than other areas of the UK.
Employment & Support Allowance
• Between Oct. 2010 & Spring 2014 ALL disabled people receiving Incapacity Benefit or Severe Disablement Allowance or Income Support paid because of illness/disability will be assessed for Employment Support Allowance (ESA).
• Those assessed as fully capable of work will be sent to claim Jobseeker’s Allowance (JSA) and/or Income Support or will be moved off benefit.
• Those who cannot work or have limited capability to work will move to Employment Support Allowance.
The Work Capability Assessment (WCA)
• Since the new WCA was introduced around 69% of new ESA claimants have been found fully fit for work and made to claim JSA or have moved off benefits altogether.
• Applying the same failure rate to the 239,550 existing Scots IB recipients means that the total number of claimants will be reduced by 66% (160,000) leading to annual benefit losses of £236 million.
Disability Living Allowance
• The Government intends to reduce the amount of DLA paid out by 20%.
• For Scotland this means that one fifth of the current 340,510 DLA claimants (68,000) stand to lose entitlement entirely - leading to benefit losses of £260 million annually.
• However if the new assessment tests are restricted to claimants of working age then 1 in 3 disabled people aged 16 - 65 would need to lose ALL of their current entitlement to achieve the necessary savings.
Personal Independence Payment
The Personal Independence Payment (PIP) will replace DLA in 2013/14. There will be 4 different rates of PIP:
• The daily living component standard rate (equivalent to middle rate care)
• daily living component enhanced rate (equivalent to higher rate care)
• mobility component standard rate (equivalent to lower rate mobility)
• mobility component enhanced rate (equivalent to higher rate mobility)
NB: There is no equivalent under PIP to Lower Rate Care
Potential Losers
• The Mobility component of PIP is to be taken away from all disabled people living in residential care.
• This will save £135 million a year by 2014-15. The current mobility component is: £18.95 (lower rate); £49.85 (higher rate).
• According to figures obtained by the Learning Disability Alliance Scotland this will affect a total of 74,850 disabled people (25% more than officially announced).
• If ALL current working age recipients of Lower Rate Care, some 60,000 disabled people, were to lose their current entitlement that would only save £60 million a year.
• This means that many thousands more people currently on the higher rates of the Care Component and/or the Mobility Component would have to lose benefits to make the additional +£200 million in savings
• The draft PIP Assessment Criteria are very similar to the Work Capability Assessment Criteria. They are a series of questions designed to measure “functionality” – the ability to carry out certain tasks.
Housing Benefit (HB)
A package of changes to Housing Benefit is being introduced this year (2011). Further changes will follow in 2013. The 2011 changes will result in -
• Private sector tenants losing several HB allowances.
• In Scotland 49,730 recipients of Local Housing Allowance (97% of all LHA recipients) will lose an average of £10 a week.
• Throughout the UK 18% of those affected will be disabled people.
From April 2013 housing benefit for working age people in social rented homes will be linked to the size of property that the Government believes they need.
• This change will disproportionately impact on households containing disabled people. DWP figures show that across the UK of a total of 670,000 households affected by this change about 450,000 (66%) will contain a disabled person.
• These households will see their Housing Benefit cut by an average of £13 per week.
• Scottish Government estimates that 95,000 Scots households will be affected.
• If the two thirds DWP estimate holds good then at least 62,000 households containing a disabled person will lose up to £15 pw in housing benefit.
• Although tenants will be penalised for under-occupying, they have little option but to do this, because there is a chronic shortage of 1-bedroom properties.
• 44% of working-age Housing Association tenants need a one-bedroom property but only 24% occupy one.
Homelessness & Poverty: The Dept. for Communities & Local Government estimates that, in England & Wales, up to 20,000 households could become homeless due to the introduction of the benefits cap.
• This is on top of the 20,000 households expected to become homeless because of other changes to benefits.
• This would translate into approximately an additional 4,000 households becoming homeless in Scotland.
• The Scottish Federation of Housing Associations estimate that due to claimants losing DLA, ESA, HB and/or other benefits as many as 1 in 5 Housing Association tenants may have their incomes affected, with some very substantial income losses for some tenants.
Main Sources:
1. Scottish Local Government Forum Against Poverty report, 2010, “People, Councils, Economy” link here - www.scottishpovertyforum.org.uk/ImpactReport.pdf
2. SFHA’s research, June 2011, “The impact of proposed Welfare Reform on HA/Co-op Tenants”, link here - http://www.sfha.co.uk/sfha/latest-news/sfha-launches-report-on-impact-of-welfare-reforms/menu-id-8.html
3. Inclusion London paper, Nov. 2010, “Comprehensive Spending Review and disabled people: a brutal attack on equality”, link here - http://www.inclusionlondon.co.uk/csr-attack-on-disabled-people
4. Demos report, Spring 2011, “Destination Unknown”, link here- http://www.demos.co.uk/publications/destinationunknownspring2011
5. Scottish Government have established a Webpage on Welfare reform. Well worth a visit especially this library of resources and reports - http://www.scotland.gov.uk/Topics/People/welfarereform/Library
