The Welfare Reform Bill and Disability

The Welfare Reform Bill (Bill 154) was unveiled by David Cameron yesterday, after being introduced in the House of Commons on Wednesday, 16th of February 2011. The Bill is quite controversial, and will provoke varying reactions depending on your political leanings. The Broken of Britain will not get involved in the general provisions of the Bill – as a non-party political group this is beyond our mandate, whatever individual members of the group may say in a personal capacity. However, provisions that affect disabled people are, most certainly, our business. Below is an analysis of the Bill and disability.

Part 1 of the Bill contains provisions and confers regulation-making powers for the new Universal Credit. Universal credit will be paid to people both in and out of work, replacing working tax credit, child tax credit, housing benefit, council tax benefit, IS, income- based JSA and income-related ESA. The stated aim of universal credit is to smooth the transition into work by reducing the support a person receives at a consistent rate as their earnings increase. The financial support provided by universal credit will be underpinned by responsibilities which claimants may be required to meet.

Clause 4 sets out the basic conditions for entitlement, including that the claimant must accept a claimant commitment which contains the requirements that a claimant will be expected to meet in return for receiving universal credit. These requirements are set out in clauses 13 to 28 – no work-related requirements if the claimant has limited capability for work-related activity, work preparation if the claimant is found to have limited capability for work, and claimants subject to work search and availability requirements otherwise, with Clause 26 setting out harsh sanction for failure to meet any of these requirements. Subsection (1)(b) of Clause 6 prevents a person from being entitled to universal credit if they only meet the conditions of entitlement for a short period, to be prescribed in regulations – this will increase the difficulty of getting out-of-work support where disability is acute.

Clause 11 provides for an amount to be included for housing costs. A person’s
maximum amount may include an amount for housing costs if the claimant is liable to
make payments on their home. This could be in the form of rent, mortgage costs or
other housing-related costs. Where the amount for housing relates to a liability to pay
rent, it is intended that the amount will be calculated with reference to a claimant’s
household size and circumstances as well as their actual rent, as is the case currently
in housing benefit. There are changes being made to housing benefit that will be harmful to disabled people, and we must block these to avoid them being carried over.

It is clear that the most effective way to make provision for disabled people in this Part of the Bill is to amend Clause 38 which provides powers relating to the determination of limited capability for work and limited capability for work-related activity owing to a physical or mental condition. A person’s capability for work may determine the work-related requirements which may be imposed. The intention is that the clause allows for the same provision as for ESA in sections 8 and 9 of Welfare Reform Act 2007.

Part 2 of the Bill makes provision for changes to the responsibilities of claimants of JSA, ESA and IS in the period leading up to the introduction of universal credit. In particular provision is made for the introduction of a claimant commitment, in the same way as in Part 1. The claimant commitment will be a record of the requirements claimants are expected to meet in order to receive benefit and the consequences should they fail to do so. Once the universal credit clauses have come into force, ESA and JSA will continue alongside universal credit as contributory benefits.

Clause 51 must be deleted, as it time-limits entitlement to contributory ESA to 365, even where the period of limited capability for work exceeds this period, though days during which a claimant is in the support group will not count towards the 365 days of entitlement.. In particular, this may plunge couples where one or both partners are disabled into poverty, as claimants will be subject to harsh means test after this period. Additionally, subsection (3)(a) provides that claimants who are already receiving contributory ESA when the time limit is introduced will have the period that they have already spent on the benefit counted towards their 365 days of entitlement. Clause 53 and Clause 56 must be amended as it provides for the same claimant commitment and responsibilities as in the Universal Credit, with the same flaws as discussed above.

As well as the changes to be made in the interim period this Part also introduces longer-term reforms to align ESA and JSA more closely with the provisions for universal credit. Clauses 49 and 56 insert new sections into the Jobseekers Act 1995 and the Welfare Reform Act 2007 which replicate those for universal credit which relate to work-related requirements and sanctions, apart from where small differences are necessary, so that what can be expected of a claimant of contributory JSA or ESA is the same as it would be for a similar claimant of universal credit.

Part 4 is the most interesting for disabled people, discussing the Personal Independence Payment, before the DLA reform consultation has closed! In June 2010 the Government announced, as part of the Emergency Budget, its intention to reform disability living allowance from 2013-14. Subsequently, in December 2010, a consultation paper Disability Living Allowance reform (Cm 7984) was published. The consultation paper sets out the Government’s proposals to replace disability living allowance with a personal independence payment. The provisions in Part 4 set out the framework for the new benefit, while the consultation responses will feed into the detailed design of the benefit which will be provided for in secondary legislation.

This Part of the Bill must be deleted in its entirety, for the reasons that The Broken of Britain is opposed to the Personal Independence Payment. Notwithstanding the facts that the DLA reform consultation was not closed when the Bill was published, that the consultation is deeply flawed, that there is no evidence that DLA reform is required, and that DLA reform will cause hardship for disabled people, the provisions for PIP are regressive. The reduction in the number of rates of PIP has been decided before the consultation ends, as has the decision to assess prescribed activities to determine awards, and the decision to require that a person be disabled for six months prior to claiming. It has also been decided that that if a claimant is an in-patient of a hospital or similar institution, or resident in a care home, and receives “qualifying services” (as defined in subsection (4)), which are paid for to any extent out of public or local funds, regulations may provide that no amount of the daily living or mobility components of personal independence payment is payable.

The Broken of Britain is exploring various avenues to ensure that the desired changes are made to the Bill, including the complete deletion of Part 4.