27 June 2006
The DWP has surreptitiously gone back on its word by ruling that all current incapacity benefits claimants will be forced onto the new Employment and Support Allowance. This means that many people currently regarded as having conditions so severe that they are exempt from even having to have a medical assessment will, in the future, have to undertake work related activities or have their benefits cut. In addition, the DWP has now ruled that whilst waiting to be transferred onto Employment and Support Allowance, all existing claimants will be obliged to draw up a return to work action plan and take part in compulsory work focused interviews.
News of the changes was tucked away in two bullet points in the Green Paper Consultation Report, published without fanfare last week. The Consultation Report presented excerpts from responses to January's Green Paper 'A new deal for welfare: Empowering people to work' which set out the proposals to abolish incapacity benefits and replace them with Employment and Support Allowance.
Under the plans, incapacity benefit and income support for people incapable of work are to be abolished and replaced with a single benefit called the Employment and Support Allowance (ESA). The vast majority of people who receive this new allowance will be obliged to draw up a personal action plan and take part in work related activities such as work trials, permitted work or cognitive behavioural therapy. A small number of claimants, judged to have conditions so severe that work will never be an option for them, will not be obliged to undertake any activities and will receive more money. (For more on the Green Paper's proposals, see Incapacity benefit reform: bribery, bullying, compulsion & spot checks 25.01.06)
The Green Paper itself stated that: "The benefits structure and conditionality requirements outlined above [i.e. the Employment and Support Allowance] will only apply to new claimants." However, the Consultation Report quietly announces that:
"We have listened to views about existing incapacity benefits claimants and have decided that they will be migrated across to the Employment and Support Allowance in time. This is to bring all claimants under the same system, helping to smooth the administration of the new benefit and reduce dual system complexity. . . However, we will ensure that existing claimants' benefits levels will be protected"
In fact, none of the views published appeared to be in favour of forcing existing claimants onto the new benefit. The truth is that the DWP have belatedly realised the enormous expense and complexity of trying to run two entirely different benefits systems for several decades. Thus claimants are being forced off incapacity benefits solely for the administrative convenience of the DWP.
Even the undertaking that "existing claimants' benefits levels will be protected" is a cause for concern. If, as the DWP have claimed all along, the new ESA is going to be more generous than incapacity benefit, then what need would there be to 'protect' benefit levels? When details of the new ESA rates are finally announced Benefits and Work predicts that some new claimants will, in fact, turn out to be worse off under the new system than they would have been under the old.
However, we do have to admit that not all Benefits and Work predictions turn out to be correct. Back in January we claimed that the consultation about the new system was likely to be a sham process, with the DWP having already decided what it was going to do. In so far as all objections by disability groups to the new two tier system and compulsory work related activities have been entirely disregarded we were right. But what we hadn't foreseen was that as soon as employers objected to improvements to the Statutory Sick Pay system, including paying employees from the first day of sickness rather than the fourth, the whole idea would immediately be dropped.
To be fair, one area of uncertainty in the Green Paper has been cleared up as a result of objections from disability organisations. It had been proposed that the new benefit would have a basic element paid at the same rate as Jobseeker's Allowance (JSA). This would have lead to young people being paid less, in the same way that they currently receive less JSA. However, the DWP have now made it clear that 'everyone in the main phase of the Employment and Support Allowance will get the same basic allowance - regardless of age'.
Even this may not be as fair as it sounds, however, because there is a waiting period of three months before claimants are assessed for ESA during which they are paid at JSA rates. It seems likely that this statement means that for their first three months of incapacity young people will indeed be paid less, on an entirely age discriminatory basis.
Many people hope and believe that these proposals will be the source of a massive rebellion by backbench Labour MPs and members of the House of Lords. The initial signs are not good, however. Of the 600 responses to the Green Paper only eight were from MPs and not a single one was from a peer.
Moreover, the DWP claims that 'Strong support was shown for reforming the current incapacity benefits regime and for extending Pathways for Work'. As evidence of this, they offer the following endorsements:
"The Disability Rights Commission welcomes the broad direction of travel in the Green Paper, the aim of increasing employment rates and a more proactive approach for employers and health professionals, together with the roll-out of the successful Pathways to Work pilots." Disability Rights Commission
"Disability Wales has long accepted the need for radical reform of the welfare state. We further welcome a reform of the welfare state that meets the needs and aspirations of disabled people." Disability Wales
"RADAR welcomes the Government's desire to improve employment prospects for disabled people. After previous false starts, RADAR commends the Green Paper as a positive attempt to reform incapacity benefits." Royal Association for Disability and Rehabilitation (RADAR)
Unless these quotes have been taken wildly out of context it seems likely that they will go a long way to undermining any potential rebellion. After all, if such prestigious disability groups are in favour of the 'reforms' how can anyone else reasonably object? Moreover, the reforms already appear to enjoy a large degree of cross-party support, so that even a substantial Labour rebellion would be unlikely to win anything other than minor concessions.
The consultation paper states that the DWP intend that the group of claimants who will eligible for the higher rate of ESA and not obliged to carry out work related activities "will be much smaller than the current Personal Capability Assessment exempt group". As all existing claimants are to be 'migrated across' to ESA this means that many people with severe conditions will in the future have to carry out work related activities or lose benefits. The only way of avoiding this would be to passport all currently exempt claimants onto the higher rate of ESA. This would be an expensive option and there is no indication that it is currently being considered.
Nor is it yet clear when or how current claimants are to be 'migrated across' to the new benefit. (It is worth noting that this choice of verb by the DWP means that existing incapacity claimants will now join another demonised group - they are about to become 'migrants' as well as potential fraudsters). Any mass migration, if it requires a new medical assessment for each claimant, would be likely to put a huge strain on DWP resources. A more likely scenario is that, as each existing claimant's incapacity for work becomes due for review, they will be assessed for ESA. This would mean that it would take up to five years for all current claimants to be transferred.
However and whenever the forced transfer is achieved, claimants can be assured that they will not be left unmolested in the meantime. The Consultation Report explains that:
"We intend, as resources allow, to require all existing claimants to complete an action plan and participate in a minimum number of work-focused interviews."
No-one, not even those who are exempt from the PCA are to be left in peace, it would seem.
The fact that such basic issues as the rate young people will receive and whether existing claimants will be covered are still subject to change at this late stage - the White Paper is due out in a few weeks time - is an extraordinary indictment of these back of an envelope proposals.
Even the name of one element has now been thrown into doubt. The DWP have belatedly realised what an eight year old could have pointed out to them, that calling the main benefit the Employment and Support Allowance and the two components the Employment Support Component and the Support Component is deeply confusing. The Department is now proposing to call the Employment Support Component the 'Work Related Activity Component'. From their point of view this also has the happy effect of removing any reference to sickness, incapacity, disability or even support from the name. It's now a benefit for people who are active and doing work related things, not for people who are disabled or who have long-term health problems.
The reform to end all reforms
The consultation paper is particularly bad news for existing claimants. But as yet there is no evidence that there will be the kind of damaging and successful protests that New Labour's attempts to 'reform' Disability Living Allowance provoked at the beginning of their tenure.
Much has been learnt by New Labour in the intervening period about news management. This time, years of work and millions of pounds worth of advertising and press releases have gone into softening up the targets. Much of the public has been successfully persuaded that the majority of incapacity claimants are either fraudsters running market stalls and hair salons or weak willed people who, for their own good, need a hefty push to get them back to work. The coming White Paper will reveal a little more about what form that final push will take.