In March, the government proposed reforms aimed at supporting
people with health conditions to get into, and remain in, paid
work. The most radical proposal is to scrap the Work Capability
Assessment (WCA), the assessment used to determine eligibility
for incapacity benefits, which are targeted at individuals deemed
too unwell to work. Instead, eligibility will be disconnected
from work capability, and based on receipt of personal
independence payment (PIP) – a benefit for those whose disability
adds to the financial cost of daily tasks (such as dressing
themselves) and mobility.
A new report published today by the Institute for Fiscal Studies
finds that:
- Before accounting for any change in behaviour,
520,000 individuals would see their benefit
entitlements fall under the reform, typically by £390 per month.
These are people who have a health condition that is deemed to
limit their ability to work but is not deemed to add significant
extra costs to daily living, such as those suffering from severe
anxiety. 320,000 individuals – who have not been
found to have an incapacity for work but who struggle with daily
tasks – will see their benefit entitlements rise by the same
amount. That is an overall annual saving to the government of
£900 million.
- Scrapping the WCA would strengthen the financial incentive to
work for 1.8 million people, but it would weaken
it for 440,000.
- The reform would ask more of work coaches – typically not
health professionals – who would have to judge how to set work
requirements for benefit recipients without their
capability to work being formally assessed.
- Many people would have an increased incentive to
apply for PIP as otherwise they would
be left on a lower income, and there will be more money at stake.
- Basing entitlement on the assessment used for PIP, spending
on which has been rising even faster than spending on incapacity
benefits, risks leading to greater spending in the long
term.
This is one of two proposed changes to incapacity benefits
announced just this year. The other, rather less fundamental,
change proposes tightening the eligibility criteria in the WCA
prior to it being abolished, reducing entitlements for new
claimants of incapacity benefits and those being reassessed. This
reform is due to be implemented in 2025 at the earliest, and will
become irrelevant when the assessment is scrapped entirely a few
years later. Previous reforms of a similar nature have often
failed to deliver expected savings.
Sam Ray-Chaudhuri, a Research Economist at IFS and an
author of the report, said:
‘The government proposes moving to a system where being unable to
work will no longer directly confer any additional financial
support from the benefits system. On the whole, this strengthens
financial incentives to work, but getting the reform right will
rely on work coaches’ ability to set personalised work
requirements that take into account what recipients can
reasonably be expected to do – despite there being no formal test
of capacity to work and work coaches typically having no medical
training.’
ENDS
Notes to Editor
'The effects of reforms to the Work Capability
Assessment' is an IFS report by Sam Ray-Chaudhuri, Tom
Waters and Isabel Stockton
