MPs' verdict on incapacity benefit reform

Issue 192 (June 2006)

David Simmons outlines the findings of the Work and Pensions Select Committee inquiry into the Government's proposed reform of incapacity benefits.

Introduction

The Work and Pensions Select Committee has published its report on the Government's proposed reform of incapacity benefits (see Bulletin 190, p. 4).1

The Committee of MPs supports the Government's 'laudable aim' of getting a million people off incapacity benefits within ten years, but warns that the reforms could be frustrated by over-complexity, insufficient resources and the reluctance of employers to take on disabled workers. Commenting on the report, the Committee Chair spoke of the ' . . . danger of turning a complex system of benefits into a maze of bureaucracy . . .'2

The Report's main conclusions and recommendations are set out below.

The Personal Capability Assessment (PCA)

  • The Committee welcomes the proposal to change the basis of the PCA so that it tests functional capability rather than incapacity. It particularly welcomes the promised review of the mental health assessment.
  • It is concerned, however, about the lack of detail on the proposed changes and the lack of progress in redesigning the PCA. It also criticises the exclusion of disability organisations from the 'expert panel' of health professionals set up to consider the reform of the PCA.
  • The Committee recommends that the new PCA ' . . . takes account of the complexity and reality of disabled people's lives, as well as the social elements of their disability . . .', and that the DWP should consult extensively on how to assess those with fluctuating conditions.
  • Although it welcomes the commitment to carry out the revised PCA within 12 weeks of a claim, the Committee is concerned about whether this can be achieved and says that those not assessed within 12 weeks should not suffer financially.

The Employment and Support Allowance (ESA)

  • The Committee stresses the importance of the ESA being paid at an adequate level and criticises the proposal to limit initial payments to basic JSA levels, recommending instead payments equivalent to statutory sick pay.
  • It also expresses concern about the complexity of the proposed two-tier system of the ESA and that it is unclear how claimants can move from one component to the other.

Pathways to Work

  • The Committee questions the adequacy of the training given to personal advisers on disability awareness (including mental health), expertise in giving benefit advice (including 'better-off calculations'), and the imposition of sanctions (distinguishing 'unable' from 'unwilling' claimants).
  • The Committee is also worried that existing claimants may receive less benefit and support than new claimants as the Pathway scheme is rolled out.

Employment issues

  • The Committee stresses the need for more in-work support for claimants taking up employment (including more funding for the 'Access to Work' scheme and an increase in the earnings disregard).
  • It also highlights the poor understanding many employers have of disability issues (particularly mental health) as a major barrier to progress.

Resources

  • The Committee questions whether the resources allocated for the proposed reforms are sufficient and whether there will be enough trained personal advisers.
  • It welcomes the proposal to involve the private and voluntary sectors in the new scheme but warns about the dangers of 'outcome-based funding' and recommends that the imposition of sanctions should rest with DWP decision-makers.

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  • 1. Incapacity Benefits and Pathways to Work, Third Report of Session 2005/6, 6 May 2006: HC 616-I.
  • 2. Work and Pensions Committee Press Notice, 6 May 2006.