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A new feature of Incapacity Benefit was that officials could ask for claimants' disabilities to be confirmed using a bespoke testing procedure – the All Work Test – carried out by doctors working for the government. Another feature was that claimants would be assessed on their ability to do any job, not just their old trade. And unlike its predecessor, Incapacity Benefit was taxable.<ref>{{cite web | title = Social security benefits: incapacity benefit: summary |author=| publisher = www.hmrc.gov.uk| url = http://www.hmrc.gov.uk/manuals/eimanual/eim76180.htm|accessdate = 2010-05-20}}</ref> Nevertheless, the caseload continued to rise. |
A new feature of Incapacity Benefit was that officials could ask for claimants' disabilities to be confirmed using a bespoke testing procedure – the All Work Test – carried out by doctors working for the government. Another feature was that claimants would be assessed on their ability to do any job, not just their old trade. And unlike its predecessor, Incapacity Benefit was taxable.<ref>{{cite web | title = Social security benefits: incapacity benefit: summary |author=| publisher = www.hmrc.gov.uk| url = http://www.hmrc.gov.uk/manuals/eimanual/eim76180.htm|accessdate = 2010-05-20}}</ref> Nevertheless, the caseload continued to rise. |
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After 2000, some recipients underwent a Personal Capability Assessment to establish whether their condition had improved: if it had, benefit payments could be withdrawn; otherwise, a Capability Report was drawn up by the examining doctor and used by Job Centre staff to plan ways to boost recipients' employability, in the hope of returning them to work.<ref>{{cite web|url=http://www.nypolfed.org.uk/assets/uploads/PDFs/incapacity2.pdf|title=A guide to Incapacity Benefit – The Personal Capability Assessment|format=pdf|publisher=Jobcentre Plus|accessdate=7 January 2016}}</ref> This new test was also used to assess some fresh claims for Incapacity Benefit. |
After 2000, some recipients underwent a Personal Capability Assessment to establish whether their condition had improved: if it had, benefit payments could be withdrawn; otherwise, a Capability Report was drawn up by the examining doctor and used by Job Centre staff to plan ways to boost recipients' employability, in the hope of returning them to work.<ref>{{cite web|url=http://www.nypolfed.org.uk/assets/uploads/PDFs/incapacity2.pdf|title=A guide to Incapacity Benefit – The Personal Capability Assessment|format=pdf|publisher=Jobcentre Plus|accessdate=7 January 2016}}</ref> This new test was also used to assess some fresh claims for Incapacity Benefit. |
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In 2004, the caseload peaked at just under 2,500,000 then began to fall slowly. |
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===2008=== |
===2008=== |
Revision as of 08:05, 22 December 2018
Incapacity Benefit is a British social security benefit that was introduced in 1995 in an attempt to control the rising number of people on out-of-work sickness benefits. In 2008, the government began to phase it out by making it unavailable to new claimants.
Between 2011 and 2016 a compulsory reassessment programme moved most pre-2008 Incapacity Benefit recipients onto Employment and Support Allowance, so that by May 2017 fewer than 3000 people were still receiving the full rate of the old benefit (another 70,000 were receiving National Insurance credits).[1]
By rooting out weak claims and encouraging people with moderate disabilities to find suitable jobs, this reassessment programme was supposed to have saved seven billion pounds a year from the welfare budget by 2018.[2] In practice, this major Whitehall project failed to generate any savings for the Exchequer.[3]
History of Incapacity Benefit
In 1995, the Conservative Secretary of State for Social Security, Peter Lilley, abolished Invalidity Benefit and replaced it with Incapacity Benefit after the Prime Minister of the day, John Major, had complained about the burgeoning caseload, saying: "Frankly, it beggars belief that so many more people have suddenly become invalids, especially at a time when the health of the population has improved".[4]
A new feature of Incapacity Benefit was that officials could ask for claimants' disabilities to be confirmed using a bespoke testing procedure – the All Work Test – carried out by doctors working for the government. Another feature was that claimants would be assessed on their ability to do any job, not just their old trade. And unlike its predecessor, Incapacity Benefit was taxable.[5] Nevertheless, the caseload continued to rise.
After 2000, some recipients underwent a Personal Capability Assessment to establish whether their condition had improved: if it had, benefit payments could be withdrawn; otherwise, a Capability Report was drawn up by the examining doctor and used by Job Centre staff to plan ways to boost recipients' employability, in the hope of returning them to work.[6] This new test was also used to assess some fresh claims for Incapacity Benefit.
In 2004, the caseload peaked at just under 2,500,000 then began to fall slowly.
2008
In late 2008, New Labour replaced Incapacity Benefit with Employment and Support Allowance (ESA) for new claims and yet another eligibility test was introduced: the Work Capability Assessment. At the same time, capacity was boosted by bringing in nurses to carry out the bulk of the medical assessments using a new semi-structured interview technique, with the findings recorded in digital format. This meant that from 2008, most new claims were scrutinised by a healthcare professional; those whose claims reached the threshold for eligibility were granted ESA - either shortly after the initial assessment, following an internal review of the initial decision, or after an external appeal.
After the introduction of ESA, the number of remaining Incapacity Benefit recipients dwindled (largely as people came off the benefit for reasons such as reaching the State Pension age): by early 2011, the Incapacity Benefit caseload had shrunk by more than 500,000.[7]
2011 to 2016
The Coalition government decided to implement the plan to reassess most remaining Incapacity Benefit recipients.[8] This reassessment programme, which began in early 2011 and was effectively completed in 2016, used an updated version of the Work Capability Assessment. Recipients confirmed as having 'limited capability for work' – often colloquially, but not technically accurately, referred to as being 'unfit for work' – were transferred onto ESA; any found fully capable of work would, in theory, have had their Incapacity Benefit payments stopped and then been invited to consider applying for Jobseekers Allowance (JSA).
In practice, many Incapacity Benefit recipients declared 'fit for work' formally appealed against the decision, at which stage 40% of decisions challenged were overturned and the claimant moved onto ESA, not JSA.[9] By May 2017, fewer than 3000 people were still receiving the old payment.
Criticisms of Incapacity Benefit
The number of claimants was "out of control"
The number of claimants of sickness benefits increased rapidly from the mid-1980s. The trend was investigated in a series of studies commissioned by the government in 1991 and published in 1993. Several possible causes were identified:
- A higher level of background unemployment; a decline in manual work; less accommodating workplaces
- An increased readiness by GPs to issue sick-notes; longer hospital waiting times; changing patterns of illness
- The relative generosity of the different out-of-work benefit payments
- Changes specific to Unemployment Benefit, with more conditions being attached to it
- More women working and paying National Insurance contributions, and so qualifying for benefits
- More claims being made by people who had not previously claimed, despite being entitled to
- Administrative changes to the benefits system in general, which tended to deter people from changing their status
The House of Commons research paper that summarised the studies' findings in the 1990s concluded that the number of new claims and their general pattern had not changed significantly; what had changed was the rate at which recipients were coming off the benefit to move back into work (after their illness had begun to improve, for instance, or by finding a job despite their disability) - it had fallen.
The bulk of the rise in the caseload occurred during the late 1980s, the 1990s and the first years of the 21st century. In 2004, the caseload began to fall slowly.[10]
Eligibility testing procedures were lax
Ministers complained about a "sick-note culture" that allowed people to drift onto Incapacity Benefit.[11] A medical certificate from a GP is the first step onto sickness benefits; although a government-run eligibility test was brought in alongside Incapacity Benefit in 1995, critics said that officials still accepted too many claims using information supplied by the claimants themselves and their GPs without asking for an All Work Test to be performed, partly because the pool of medical assessors was relatively small and partly because doctors' time was costly - which was why large numbers of nurses were brought in to perform the new test introduced in 2008.[12]
Claimants were "trapped" on benefits
Welfare reformers said that once claimants had been granted Incapacity Benefit they became "trapped" in the system.[13] In fact, there was nothing in the regulations that inherently trapped people on Incapacity Benefit: recipients were free to relinquish their payments and seek work if they felt able to, although the meagre gains from moving into a poorly paid and insecure job were thought to act as a deterrent to doing so - a phenomenon that Working Tax Credits and Universal Credit were designed to mitigate.[14]
The cost was unaffordable
In 2011, out-of-work sickness benefits had an annual cost of £13 billion: the Chancellor, George Osborne, called this "a very large budget".[15] The total annual budget of the Department for Work and Pensions in 2011 was £180 billion, with the largest slice by far - almost half - being spent on the State Pension, followed by Housing Benefit at slightly under £30 billion. Tax Credits, administered by the Treasury, cost roughly the same as Housing Benefit.
If out-of-work sickness benefits costs were combined with those of the other disability benefits - the bulk of which go to the elderly - the total would be around £33 billion.[16]
People who could work were putting in claims
DWP data on the outcomes of new claims - not reassessments of existing Incapacity Benefit recipients - drawn from the first two years of ESA's availability showed the following:
- Only 7% of new claimants were found at assessment to be both severely disabled and unfit for work
- Another 17% were also found to be unfit for work after their assessment, but were less disabled and so were judged likely to work in the future, once they had received tailored support
- 39% were found to be able to work there and then, and so were not entitled to ESA
The remaining 37% ceased claiming for unspecified reasons in the course of the 13-week application and assessment process; some might have abandoned a weak claim as the assessment approached, others might have recovered from their illness, injury or recent surgery or found a new job - the proportions are unknown.[17]
When the unassessed 37% are removed from the equation, the results were:
- 38% were assessed as being unfit for work at the time of their assessment
- 62% were assessed as being fit for work (before any appeal)
Some recipients were no longer incapacitated
Commentators and policy-makers suspected that a large chunk of people on Incapacity Benefit had got better but had kept this quiet and were still receiving payments.[18] Another, more charitable, view was that recent disability legislation and changes in the workplace might have removed some of the barriers to disabled people returning to work.
In two pilot studies of the Work Capability Assessment as a tool for judging the fitness for work of long-term Incapacity Benefit recipients – when 1,347 disabled people living in Aberdeen and Burnley, who had been on their benefit for at least two years, were assessed in late 2010 – provisional results suggested that:
- 30% of existing Incapacity Benefit recipients were actually able to work, according to the new test's more stringent criteria
- 39% were unfit for work but, with extra help, were likely to return to the world of work at some point in the future
- 31% were both unfit for work and unlikely to benefit from rehabilitation or training.[19][20]
The reliability of this provisional data has been challenged, since many of those categorised as 'fit for work' subsequently won their appeals against the initial decision, suggesting that the results of the pilot studies overstated the percentage of claimants who were capable of finding a job.[21]
With the passage of time, experience showed that the vast majority of Incapacity Benefit recipients also met the more stringent criteria for ESA as well, and the combined total of people on these benefits hardly changed between 2008 and 2015. Furthermore, the generic rehabilitation programme for those on ESA who were considered to be able to work in the future – the Work Programme – proved largely ineffective in returning them to work.
Incapacity Benefit Reassessment
In February 2005, the BBC analysed New Labour's record on welfare reform:
Thinking the unthinkable on the welfare state has been one of the New Labour mantras since before the party was elected in 1997. So it has been a disappointment to many [...] on the Labour benches that, eight years later, the thinking has still to produce any concrete results.[22]
The following year Tony Blair appointed David Freud, a former vice-chairman of investment banking at UBS, as an advisor on out-of-work benefit reform. Freud's 2007 report called for the greater use of private sector companies who would be paid by results, and for substantial resources to be made available to help people on Incapacity Benefit back into work.[23]
In 2008 a Green Paper was published, which James Purnell said was "inspired by the reforms proposed by David Freud". It declared that "between 2009 and 2013, all Incapacity Benefit claimants will be reassessed using a medical assessment called the Work Capability Assessment (WCA)".[24][25] However, a decision later that year to overhaul the test's criteria delayed the start of the reassessment programme.
In the autumn of 2010, with Freud now a government minister responsible for welfare reform, two pilot studies took place. 1347 people who had been on Incapacity Benefit for more than two years were assessed against the new criteria that would be used to gauge the fitness for work of more than two million such people from the spring of the following year.[26]
Experts raise concerns
Professor Harrington asked MIND, Mencap and the National Autistic Society to "provide recommendations on refining the mental, intellectual and cognitive descriptors" but the DWP's own doctors were not convinced by the evidence presented.[27] The department decided to set up an 'evidence-based review' to look in more detail at the proposed changes, which concluded that the existing criteria "produced consistent results on the whole" and that the WCA was already "an accurate indicator of work capability as compared with expert opinion".[28] DWP ministers replaced Professor Harrington once he had submitted his third annual report in 2012.[29] [30] As his successor they appointed Paul Litchfield, a doctor who had played a key part in designing the WCA's mental and cognitive function descriptors in 2006.[31]
In 2013, The Guardian quoted Professor Harrington as saying: "I would have preferred to do a roll-out [the IB reassessment] in the second year [2012]" and as having told the DWP this before the Incapacity Benefit reassessment programme began. The DWP told the newspaper it had no record of a warning of this kind being given by Professor Harrington.[32] Furthermore, the minister who had formally initiated the 'roll out' had said in Parliament that beforehand Professor Harrington had told him: "I believe the system is in sufficient shape for you to proceed with Incapacity Benefit reassessment".[33]
When asked later about this discrepancy, Professor Harrington replied:
Can I clarify this once and for all? In my first year — before the first report, that is — I said to [the minister] that, left to my own devices, I would prefer it if they would postpone the IB migration until I had got at least one review in, so they could just deal with the new claimants and would not be confused by another group of people coming in — a completely different group of people, as you well know. He did not say no; it was just obvious that it was a political done deal and they were going to go ahead and do the IB migration whatever.[34]
Reforms fail to make savings
The Incapacity Benefit reassessment programme had originally been expected to save seven billion pounds a year from the welfare budget.[2]
In 2015 the Office for Budget Responsibility (OBR) found that no savings had been made to date: the sickness benefit budget remained at more than £13billion a year.[35] Furthermore, because many more claimants than forecast were being placed in the Support Group, the government's fiscal watchdog raised its estimate for spending on sickness benefits by one billion pounds a year.[36]
In 2016 the OBR said that the reforms had still made no impact on the level of welfare spending — although a simple freezing of benefit payments, so that they did not rise with inflation, had made some savings for the Treasury.[3]
Professor Jonathan Portes,[37] formerly the chief economist at the DWP and later the director of the National Institute of Economic and Social Research, has described the Incapacity Benefit reassessment programme as "the biggest single social policy failure of the last fifteen years".[38]
References
- ^ NOMIS - May 2017
- ^ a b "Hutton unveils benefits shake-up". BBC News. 24 January 2006.
- ^ a b "Welfare reforms not made expected savings, says OBR". BBC. 13 October 2016.
- ^ Westminster, Department of the Official Report (Hansard), House of Commons,. "House of Commons Hansard Debates for 15 Jun 1993". www.publications.parliament.uk.
{{cite web}}
: CS1 maint: extra punctuation (link) CS1 maint: multiple names: authors list (link) - ^ "Social security benefits: incapacity benefit: summary". www.hmrc.gov.uk. Retrieved 20 May 2010.
- ^ "A guide to Incapacity Benefit – The Personal Capability Assessment" (pdf). Jobcentre Plus. Retrieved 7 January 2016.
- ^ "DWP Quarterly Benefits Summary" (PDF). May 2015.
- ^ "The Coalition: our programme for government" (PDF). p. 23. Retrieved 12 May 2010.
- ^ Jon Stone (10 September 2015). "Appeals against DWP 'fit to work' decisions more successful than ever before". The Independent. Retrieved 6 January 2016.
- ^ Jonathan Portes (16 April 2015). "Welfare savings and incapacity benefits". National Institute of Economic and Social Research. Retrieved 2 January 2016.
- ^ "Bid to tackle 'sick-note culture'". BBC News. 20 February 2008. Retrieved 15 January 2016.
- ^ "Doctors facing benefits dilemma". BBC News. 23 January 2006.
- ^ Macer Hall (23 January 2014). "Millions are trapped in 'Benefits Street' ghettos". Daily Express. Retrieved 6 January 2016.
- ^ Donald Hirsch (11 July 2013). "Does Universal Credit make work pay?". Joseph Rowntree Foundation. Retrieved 15 January 2016.
- ^ Andrew Porter (10 September 2011). "Millions face incapacity benefit cuts as welfare reforms speed up". Daily Telegraph. Retrieved 30 December 2015.
- ^ "Department for Work and Pensions Annual Report & Accounts 2011-12" (pdf). The Stationery Office. 2012. Retrieved 27 December 2015.
- ^ Kirsty Walker (27 July 2011). "The shirking classes: Just 1 in 14 incapacity claimants is unfit to work". Daily Mail. Retrieved 31 December 2015.
- ^ "Hard workers should no longer support shirkers". Daily Express. 26 January 2011. Retrieved 15 January 2016.
- ^ Neil O'Brien (4 April 2011). "Why it's time to end Incapacity Benefit". Daily Telegraph. Retrieved 1 January 2016.
- ^ "Initial reassessments of those on IB in Aberdeen and Burnley show large numbers of claimants with the potential to return to work" (Press release). Department for Work and Pensions. 10 February 2011. Retrieved 6 January 2016.
- ^ nickd (25 January 2014). "More 'sick' propaganda via BBC – Hereby corrected..." www.ilegal.org.uk. Retrieved 21 December 2015.
- ^ "Blair thinks the unthinkable?". BBC. 2 February 2005.
- ^ "Freud Report" (PDF).
- ^ "No one written off: reforming welfare to reward responsibility" (PDF). July 2008.
- ^ "Raising expectations and increasing support: reforming welfare for the future" (PDF). DWP. December 2008.
- ^ "Initial reassessments of those on IB in Aberdeen and Burnley show large numbers of claimants with the potential to return to work" (Press release). Department for Work and Pensions. 10 February 2011.
- ^ "Harrington review 2011" (PDF).
- ^ "Evidence-based review of the WCA" (PDF). gov.uk. December 2013.
- ^ "Harrington review 2012" (PDF).
- ^ "Reviewer of fitness-to-work benefit tests to stand down". BBC News. 30 July 2012.
- ^ "Hoban – committed to further improvements to the Work Capability Assessment – Press releases". GOV.UK. 26 February 2013. Retrieved 7 September 2015.
- ^ Patrick Butler (16 December 2013). "Ministers 'ignored advice on inhumane fit-for-work tests'". The Guardian.
- ^ "work capability assessments". Hansard. 1 February 2012.
- ^ "Professor Harrington: evidence to work and pensions committee". 14 May 2014.
- ^ "Office for Budget Responsibility". Office for Budget Responsibility. Retrieved 14 September 2015.
- ^ Welfare trends report (Executive summary) (pdf). budgetresponsibility.org.uk (Report). Office for Budget Responsibility. 2015. Retrieved 2 February 2016.
- ^ "BBC Radio 4 – Analysis, Inside Welfare Reform". bbc.co.uk. 2 November 2014.
- ^ "Welfare savings and incapacity benefits". niesr.ac.uk.