The Welfare Reform Green Paper

Simon Osborne outlines the main benefit proposals in the recently published Green Paper.

Introduction
The benefit proposals in brief
Employment Support Allowance
A reformed Personal Capability Assessment
The consultation

Introduction
The Government published its long-awaited Green Paper on welfare reform on 24 January. Entitled 'A new deal for welfare: empowering people to work', the publication of the Green Paper marked the beginning of a formal consultation period that lasts until 21 April. This article attempts to set out the basics of the main benefit-specific proposals.

The reform of incapacity benefits occupies centre stage. But there are other features too, including the extension of support and compulsion (i.e., via more work-focused interviews) to more lone parents and older people. No compulsion is proposed for anyone other than benefit claimants.

The problem, asserts the Green Paper, is that 'there are groups of people locked into long-term dependency on benefits.' The intention is that the reforms will reduce the number of people on incapacity benefits by one million, help 300,000 lone parents into work and increase the number of older workers by one million. This is all part of an aspiration to achieve an 80% employment rate.

The benefit proposals in brief
The Green Paper is long (around 100 pages) and there is a lot of material concerning matters like health in the workplace, reducing sickness absence, removing barriers to work and encouraging flexible working. (Employers are to be encouraged and supported, but not threatened with penalties.) The main benefit-specific proposals are:

• abolition of Incapacity Benefit (IB) and Income Support (IS) for incapacity for work for new claimants, and replacement with a single Employment and Support Allowance, from 2008 (see below for more);
• 'transformation' of the Personal Capability Assessment process so that it focuses on capability to work and not just entitlement to benefit (see below for more);
• extension of the Pathways to Work pilot scheme nationally between 2006 and 2008, including application to more existing claimants ;
• voluntary-sector and private-sector organisations to be invited to manage new Pathways to Work pilots;
• requirement to exhaust periods of permitted short-term sickness on JSA before moving to incapacity benefits;
• reform of Statutory Sick Pay by eliminating linking periods and waiting days;
• introduction of more frequent work-focused interviews for lone parents who have been on income support for at least a year - every three months where the youngest child is at least 11 years old, every six months otherwise;
• introduction of pilots testing a new 'work-related activity premium' for lone parents whose youngest child is aged 11 or more and who have been on income support for at least six months;
• people aged 50-59 to be required to take part in the New Deal 25 plus;
• to extend the Local Housing Allowance for housing benefit to the private sector, after consideration of capping rules, modification of size criteria and setting rates at median rather than mid-point rent levels;
• a move towards a simpler benefits system including a 'single gateway' and a review 'to identify the challenges to creating a single system with effective solutions'.

Employment Support Allowance
This is the name of the new benefit that is intended to replace IB and IS for incapacity for work in 2008. The major features are as follows.

• It will be an 'integrated, contributory and income-related allowance'.
• It will consist of an initial allowance set at basic JSA levels, followed by an additional Employment Support component if PCA is satisfied.
• Entitlement to the Employment Support component is, in most cases, conditional on meeting compulsory requirements regarding work-focused interviews and work-related activity.
• There will be no additional amounts for dependants or age-related payments.

At the initial 'assessment phase' - i.e. when it is first applied for - Employment and Support Allowance will be paid at basic JSA level. An initial work-focused interview will apply after eight weeks, and the aim is to have applied the (reformed) PCA within three months.

If the PCA is satisfied, the claimant will move to the main phase. In most cases, this will consist of the basic JSA level plus an additional Employment Support component. For most people however, entitlement to that component will be conditional on complying with various compulsory requirements: attending work-focused interviews, agreeing an 'action plan' regarding possible work-related activity (i.e., similar to the current Pathways to Work pilots) and actually carrying out some of that activity.

A small minority - those with the most severe disabilities and conditions - would not be subject to this compulsion (the implication is that they would not have any conditionality imposed at all). This group will not be identified by reference to a particular condition but will be decisions based on the reformed PCA: i.e. on individual assessment. The Green Paper is silent on whether there would be a right of appeal regarding such decisions.

The Green Paper says that the inclusion of the Employment Support component 'will fix the total received by a claimant at a rate above the current long-term rate' - but it is not clear if the latter includes the dependant's additions and age-related payments currently payable with IB.

A reformed Personal Capability Assessment
The Green Paper (while acknowledging that the PCA is already 'one of the toughest in the world') announces the following changes.

• The PCA to provide an assessment of 'an individual's eligibility for financial support based on their functional capability' (roughly translated, this probably means benefit entitlement on the basis of incapacity for work).
• The PCA to identify those who are 'capable of taking part in work-related activity' and the help they need to get back to work, and those 'who are so limited by their illness or disability that it would be unreasonable to require them to undertake any form of work-related activity in the future' (this would include identifying those who are subject to the full conditionality requirements of the new Employment and Support Allowance).
• A review of the mental health component of the assessment with regard to the mental health component (it is unclear whether changes to the current descriptors/points of the PCA are intended).
• The Personal Capability Assessment to be renamed as 'for many people [it] has rather negative implications'.

The consultation
The formal consultation period is 12 weeks from 24 January to 21 April 2006. The Green Paper (Cm 6730) is published by the Stationery Office, and is also available via the welfare reform links on the DWP website at www.dwp.gov.uk. Responses should be sent to: The Welfare Reform Team, Level 2, The Adelphi, 1-11 John Adam Street, London WC2N 6HT, telephone 020 7712 2521, fax 020 7962 8524, textphone 020 7712 2492, email welfarereform@dwp.gsi.gov.uk.

Welfare Rights Bulletin 190 February 2006