Benefit reforms ‘will cost disabled people £9 billion’

Government benefit reforms are set to cost disabled people more than £9 billion over the next five years and push them “further into poverty and closer to the fringes of society”, according to a respected think-tank.

The Destination Unknown report by Demos, says the welfare reforms are set to hit 3.5 million disabled people by 2015.

The losses are partly caused by a planned change to the way benefits are increased – or uprated – annually, from the use of the retail price index to the lower consumer price index (CPI).

Many disabled people are also set to lose out through the reassessment of disability living allowance (DLA) claimants, as the government moves to cut DLA costs by 20 per cent.

And many will be affected by the reassessment of long-term claimants of incapacity benefit (IB), through the controversial work capability assessment (WCA), with the first pilots beginning in Aberdeen and Burnley this week and national retesting starting next spring.

The report says that a typical disabled man and his wife, who is his carer and is also disabled, would lose £3,143 over the next five years through the uprating change.

A disabled man on employment and support allowance – the replacement for IB – would be nearly £1,300 worse off by 2015, with the possibility of further losses if his DLA was reduced or stopped.

And a disabled person moved from IB to jobseeker’s allowance because he was found “fit for work” after a reassessment would lose nearly £9,000 by 2015.

Among its recommendations, the report calls on the government to reform the WCA, and allow disabled people to take a lump sum from their future housing benefit entitlement to buy their own homes.

A Department for Work and Pensions spokesman said they “don’t recognise” the figures in the report and could not “pre-judge” the results of next week’s government spending review.

Richard Hawkes, chief executive of the disability charity Scope, which funded the report with the Barrow Cadbury Trust, said: “Benefits are not optional extras – they are vital lifelines to help disabled people participate in our society.

“Without them, hundreds of thousands of disabled people will be forced into a cycle of long-term unemployment, poverty and social exclusion.”

The report’s publication came as Iain Duncan Smith, the work and pensions secretary, told MPs that 900,000 people had been claiming IB for more than 10 years, while the government had spent a “staggering” £133 billion on incapacity benefits in the past 10 years.

Ed Miliband, the new Labour leader, told the prime minister in the Commons this week that his party backed the government’s reforms to IB and DLA.

He said he would “work with him” on the reforms “because they are important reforms and they need to be done”.

13 October 2010