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Additional financial support needed before lower benefit rate introduction

3 February 2017

The Work and Pensions Committee report says that, if the Department is to press ahead with introducing a lower rate of benefit for new claimants of the Employment Support Allowance (ESA) in the Work-Related Activity Group (WRAG) it must first have set out a clear plan for identifying where new claimants have additional, unavoidable living costs relating to their conditions, and how it will ensure that these costs are covered.

Lower ESA rate as incentive to work "ambiguous at best"

Under the Government's plans, new claimants deemed unfit for work from April 2017 will receive £73.10 per week, the same as Jobseekers Allowance (JSA), and £29.05 less than is currently the case.

  • The Committee says the evidence supporting the idea that introducing a new, lower rate of Employment and Support Allowance will enhance incentives to work is "ambiguous at best"
  • Where new ESA claimants have unavoidably higher living costs related to their conditions, the change may leave them with lower disposable incomes than JSA claimants
  • ESA claimants are not expected to find work as quickly as JSA claimants and are likely to need support for longer
  • The measure is now expected to save £450 million per year by 2020-21, or £1 billion in total over the same period

Halving the disability employment gap

The Government has stated it aims to halve the disability employment gap—the difference between employment rates of disabled and non-disabled people.

  • This is a laudable target, but the Government has not committed to any timeline for reaching it
  • At current employment levels, this would require an extra 1.2 to 1.5 million disabled people to move into work
  • The Committee heard one estimate - from the Learning and Work Institute - that on current rates of progress, halving the gap would take over 200 years

Radical new approach needed

A radical new approach is therefore required to see the Government's intention made real.

  • There must be a much greater emphasis on retention and supporting people who become disabled while in employment
  • The Government and Jobcentre Plus must work with the third sector agencies who have specialist knowledge and expertise to help employers to recognise the benefits of employing and retaining disabled staff

One of the most important conclusions of the Committee is that the Government should consider using incentives such as reductions in National Insurance contributions to encourage employers to consider employing people with disabilities.

Concerns over DWP's sanctions effectiveness

Likewise, the Committee heard concerns about the effects of DWP's (Department for Work and Pensions) sanctions and conditionality policies on disabled people's progress towards work. Sanctions, where applied, should be a means to an end rather than an end in themselves.

  • The Committee heard that inappropriate sanctions can cause significant hardship, making it less likely, rather than more, that a disabled person will move into work
  • The Committee calls on the Government to develop a Code of Conduct for Jobcentre staff on safeguarding vulnerable disabled claimants, including how to consider claimants' mental and physical wellbeing when deciding whether to make a referral for a sanction

Work Coaches should be better equipped to handle WCA

The Department's decision to exempt some severely disabled claimants from repeated reassessment for ESA is welcome. But the Committee has deep concerns about the new Work Capability Assessment model proposed by the Government in its recent green paper on work and health.

  • If Work Coaches are to be more involved in the WCA and be handed much more discretion over setting benefit conditionality, they must do so from a better trained, better informed position
  • The Committee again calls for a new front-line, senior disability specialist role for Work Coaches to be developed

Committee comments

Heidi Allen MP, Conservative member of the Committee, said:

"To make the Government's ambition a reality we need to unleash the expertise of the 3rd sector.   This will only be achieved by direct commissioning of their services by Jobcentre work coaches who themselves have detailed knowledge of disability and health conditions. This will require significant upskilling of Work Coaches and a change to the payment by results method used in the legacy Work Programme and Work Choice initiatives.

Until this support mechanism is up and running and working well, I believe the DWP should delay the removal of the ESA WRAG benefit. People with disabilities and long term health conditions require extra financial support above Jobseeker's Allowance while they make their slow but steady return to work."

Neil Coyle MP, Labour member of the Committee, added:

"The Government set a five year timeframe for an aim it now recognises it will not meet within the next ten years. The Committee agrees that the aim remains laudable, but the Government's lack of new timetable or measurements for success is alarming.

The Committee is agreed that disabled people the Government has assessed as not being fully fit for work should not lose out under benefit cuts, until new employment support promised by DWP is delivered. Ministers must also make good on commitments to reduce other non-avoidable costs disabled people experience before new ESA benefit cuts are imposed."

 Mhairi Black MP, SNP Member of the Committee, said:

"We heard countless pieces of evidence that the imposition of benefit sanctions push disabled people further from work, and where there is substantial risk of damage to their health as a result. I am delighted that the committee has united behind my bill, that would establish a code of conduct to protect those at risk from benefit sanctions. It's imperative that the Department now take our recommendations on board to at-least, deliver safeguards to protect disabled people from the devastating effects of cruel and callous sanctions regime and ensure that their progress towards work is not impeded."

Rt Hon Frank Field MP, Chair of the Committee, added:

"We expect the Government to respond to this report before the proposed new lower rate of ESA is due in April. If they intend to proceed with these cuts, we expect an explanation of how this will not be detrimental to its target of halving the disability employment gap, by making finding and keeping a job even more difficult for disabled people than it already is."

Further information

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