Benefits increase now seems not quite so generous

Disabled people will receive an above-inflation increase in disability benefits in April, the chancellor has announced in his pre-budget report.

But there were criticisms of the move later, when it emerged that the recipients will have to cope with a lower settlement in 2011 to make up for the 2010 increase.

The chancellor, Alistair Darling, said inflation-linked benefits were not due to rise in April 2010 because such payments will be linked to the September retail prices index (RPI), which was minus 1.4 per cent.

He said such a freeze would not have been fair and announced that child benefit and some disability benefits – including attendance allowance, disability living allowance and employment and support allowance – would increase by 1.5 per cent. Incapacity benefit will rise by 1.8 per cent, slightly higher for technical reasons.

Pensions minister Angela Eagle said later: “Despite negative RPI, we don’t want the disabled, carers and other vulnerable groups to miss out on an increase this year.

“Rather than freezing these benefits we are providing support now to help them through the recession.”

But a Department for Work and Pensions spokeswoman admitted that the inflation-linked increase in 2011 would be reduced by 1.5 percentage points.

She said: “Essentially we decided to do it sooner rather than later. It is providing help to people now when they need it.”

Steve Webb, the Liberal Democrat shadow work and pensions secretary, said: “Alistair Darling appears to have hoodwinked those listening to his pre-budget report about what this could mean for people with disabilities and families in the long run.

“This ruse will mean a real terms cut in benefits for children and people with disabilities in 2011 and all ministers must take responsibility for this.”

Meanwhile, Darling’s promise to protect the NHS budget from cuts raised concerns that this pledge could come at the price of cuts to social care spending.

Andrew Harrop‚ head of public policy at Age Concern and Help the Aged‚ said: “With huge public spending cuts now likely outside the NHS‚ schools and policing‚ people reliant on care services can only fear the worst.”

He added: “Ministers have said that addressing the crisis in the care system is one of their top priorities‚ but the chancellor has failed to match this rhetoric with a commitment on funding.”

10 December 2009