Budget: Osborne scraps WRAG as part of £13 billion-a-year benefit cuts

The government is to slash financial support for hundreds of thousands of disabled people on out-of-work benefits, as part of measures that will cut £13 billion-a-year from the social security budget by 2020-21.

The chancellor, George Osborne (pictured), announced in yesterday’s budget that he was scrapping the extra support provided to disabled people found not to be “fit for work”, but able to carry out some “work-related activity”.

From April 2017, new claimants placed in the work-related activity group (WRAG) of employment and support allowance (ESA) will receive the same weekly payment as those on jobseeker’s allowance (JSA), an annual loss of about £1,500 a year, and a move that will cut £640 million a year from disabled people’s income by 2020-21.

The announcement came despite DWP figures, revealed by Disability News Service last week, which showed that the proportion of disabled people living in poverty rose sharply in the fourth year of the coalition government.

Osborne claimed in his budget speech that the existence of the WRAG was creating “perverse incentives” that were preventing more disabled people returning to work, with the number of people claiming out-of-work disability benefits falling by just 90,000 since 2010.

But his move was described by Disability Rights UK as a “bitter blow”, and by Mind as “insulting and misguided”, while disabled blogger David Gillon tweeted: “When it resorts to claiming disabled ppl are lazy and don’t want to work #Budget2015 engages in worst kind of scrounger rhetoric.”

One key question yet to be answered is whether current ESA claimants who are reassessed after April 2017 will be treated as “new” claimants and therefore see their benefits cut, even if their support needs are found not to have changed.

Pat Onions, founder of Pat’s Petition, was one of those who raised concerns about this possibility, as well as heavily criticising the decision to scrap the extra support for new claimants.

It is also not clear whether those still caught in the ESA assessment system in April 2017, or existing claimants of old-style incapacity benefit, severe disablement allowance or income support who may still be waiting to be reassessed for ESA, will be treated as new claimants.

A new welfare reform and work bill, published today by work and pensions secretary Iain Duncan Smith, suggests that ministers have not yet decided what should be done with these groups, stating that the work and pensions secretary “may by regulations make such transitional or transitory provision or savings as the secretary of state considers necessary or expedient”.

The chancellor also announced a series of other measures that will cut support to disabled benefit claimants, as part of reforms that will see working-age social security spending fall by 2.3 per cent a year in real terms over this parliament, nearly four times the speed of cuts under the 2010-15 coalition (0.6 per cent a year).

Osborne said that his budget would “keep moving us from a low wage, high tax, high welfare economy to the higher wage, lower tax, lower welfare country we intend to create”.

Among the measures he announced, most working-age benefits will be frozen – a real terms cut – for the rest of the parliament, although disability living allowance (DLA), attendance allowance and personal independence payment (PIP) will continue to rise by inflation every year.

The support group top-up component of ESA will escape the freeze, but the main component of ESA and the WRAG top-up will also be frozen until 2020, as will housing benefit and tax credits.

Many disabled people will also be affected by the decision to reduce the cap on total benefits that a couple can receive from £26,000 a year to £23,000, and £20,000 for those outside London.

Although the benefit cap does not apply to households containing anyone receiving PIP or DLA, thousands of disabled people who are not eligible for PIP or DLA will be affected.