Incapacity to limited capability

Issue 210 (June 2009)

Martin Williams looks at the benefit options for existing claimants of income support (IS) or incapacity benefit (IB) who are found capable of work.


Since the introduction of employment and support allowance (ESA) it has not been possible to make a new claim for IB or IS on grounds of incapacity, except in limited circumstances covered by the transitional rules.1 However, existing claimants of IB or IS on grounds of incapacity have continued to receive those benefits, and are still subject to the old test of incapacity for work, generally the personal capability assessment (PCA).

Difficulties can arise in advising a claimant who has had her/his IB or IS stopped because s/he has been found not to meet the required threshold of incapacity under that test (or has been treated as not meeting that threshold due to failure to attend/submit to a medical or return the IB50).

The DWP has published DMG Memo 12/09 which sets out its view of the options for such claimants.

Before ESA

Prior to the introduction of ESA, a claimant who had been found fit for work and was appealing against that decision had the following options for getting benefit while her/his appeal was pending.

  • S/he could choose to claim jobseeker’s allowance (JSA) and ask that disability be taken into account in terms of availability for work. This would not prejudice the appeal.
  • If s/he had failed the PCA, as opposed to having failed to return the IB50 or attend a medical, s/he could choose to claim IS and, provided the other conditions were met, would be entitled on the basis that s/he had made and as pursuing an appeal against the PCA decision.2However, if that was the only basis for entitlement, her/his applicable amount would be reduced by 20 per cent of the amount of the personal allowance for a single claimant.
  • S/he could attempt to reclaim IS or IB on the basis of incapacity. However, regulation 28 Social Security (Incapacity for Work) (General) Regulations 1995 (IFW Regs) prevented her/him from being treated as incapable of work simply on the production of medical certificates, unless s/he had a new condition or it was accepted that there had been a significant deterioration in an existing condition. If this was not accepted, the decision maker should have determined whether s/he was actually incapable of work under the PCA (sometimes by arranging a new medical). However, generally the decision maker would simply use the findings from the medical, which had previously been used to make the determination that s/he had failed the PCA, to find that s/he still failed that test.

All of these options are still available.

New rules since ESA

The possible availability of ESA complicates the situation but does represent an improvement for claimants.

A person whose IS or IB has ceased can claim ESA. S/he is not prevented from doing this by the fact that s/he has been found to have failed the PCA. S/he is treated like any other new claimant for ESA (i.e., s/he is treated as having a limited capacity for work during the assessment period provided s/he supplies medical certificates). This is because the equivalent of regulation 28 of the IFW Regs 3for ESA only prevents a person from being treated as having a limited capacity for work during the assessment period if s/he has been found not to have a limited capability for work within the last six months. A person who has failed the PCA has not been assessed as not having a limited capability for work but as not being incapable of work.

The ESA claim would not fail to be treated as an IB/IS one under the transitional rules unless the person came within the situation described in the last bullet point above.

This means that a person who is appealing against a negative PCA decision now has the additional option of claiming ESA while her/his appeal is pending. As ESA is paid at the normal rate, s/he will generally be better off doing this than claiming reduced rate IS pending her/his appeal. If the claimant has claimed reduced rate IS rather than ESA, s/he could withdraw her/his claim to IS and claim ESA instead.

If the PCA appeal is eventually allowed, the DWP says that it will reinstate the award of IB/IS from the date it stopped and pay the arrears of that benefit falling due: treating the ESA already paid as if it had been IB/IS and paying the difference owed.4

DWP guidance states that where a person who has claimed ESA while awaiting an appeal against the PCA decision is subsequently also assessed as not having a limited capability for work and appeals that decision as well, then her/his entitlement to ESA should continue at a rate where the applicable amount includes a personal allowance, any premiums and housing costs that are applicable, although not a component (as it does for all ESA claimants appealing against limited capability for work decisions). The decision maker should ask the First-tier Tribunal to list both of the appeals to be heard together. If the tribunal allows the PCA appeal, it would not need to determine the limited capability for work one.5Given the much higher threshold of sickness required under the limited capability for work test, it is unlikely that a claimant would pass this but not pass the PCA.

The option to claim ESA having been found fit for work under the PCA also exists for those who do not wish to appeal against that decision: again such people are not prevented from being treated as having a limited capability for work simply on the basis that they provide medical certificates.

A problem with the memo

DMG Memo 12/09 also contains guidance, at paras 2 to 3, on what decision makers should do when statutory sick pay (SSP) runs out for a person who has been receiving SSP with a top up of IS. The memo states that if the only basis on which the person would remain entitled to IS is that s/he is incapable of work, the IS award should be terminated and the claimant advised to claim ESA.

This is arguably legally incorrect if the claimant provides medical certificates to the DWP before her/his SSP stops. The claimant in this situation is not making a new claim for IS when her/his SSP stops – rather s/he is changing the basis on which s/he is entitled to her/his existing award of IS (R(IS)10/05) and so is not forced by the transitional rules to claim ESA.

Advisers may wish to appeal against the decision terminating IS on this basis (although while doing this the claimant should still be advised to claim ESA).


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