Disability campaigners have slammed £2bn cuts to sickness benefits announced by chancellor George Osborne as part of the comprehensive spending review.
In future, many recipients of employment and support allowance – the replacement for incapacity benefit – will only be able to claim it for a year before losing their benefit altogether.
Disability Alliance director of policy Neil Coyle said: “It’s very concerning.” He said the work capability assessment, which determines eligiblity for ESA, was “universally seen as too tough”, meaning people claiming ESA were those with significant disabilities.
The time limit will apply to people who receive ESA on the basis of past national insurance contributions and are placed in the “work-related activity group”, which means that they are deemed to have some future prospect of returning to the labour market.
It will not apply to people who are so severely disabled that they are deemed unable to work. Affected claimants would be means-tested and those with a partner working full-time or savings of over £16,000 would lose eligibility for ESA.
“The test in place for assessing a person’s eligibility for ESA is already incredibly stringent and only those living with physical or mental impairments deemed severe enough can pass,” said Deborah Jack, chief executive of the National Aids Trust. “So for the government to announce that these people will now only be able to receive this benefit for a year is essentially penalising them with a time limit that is in no way relevant or reflective of their individual situation.’
There was also criticism for plans to remove the mobility component of disability living allowance from 60,000 care home residents, a move that will save £135m a year and will be introduced from October 2012.
“This is a fundamentally unfair change that would have a hugely detrimental impact on thousands of disabled people, leaving many effectively trapped in their homes, unable to afford to go out,” said Guy Parckar acting director of policy and campaigns at Leonard Cheshire Disability. “Many people in residential care already have their income capped at £20 a week once their care has been paid for and rely on this benefit to be more independent. This change will hit one of the most vulnerable groups in society and we urge the government to reconsider.”
The benefit would be removed from disabled people who had been in a care home for over 28 days and received state funding for their care.
The Department for Work and Pensions said the measure would bring care home residents into line with hospital in-patients, who lose access to the benefit on the same basis. Minister for disabled people Maria Miller said: “This measure will ensure funds are targeted where they are most needed and will not apply to residents who meet all of the costs of the care home fees themselves.”
Overall, £7bn is to be saved from the welfare bill annually, in addition to £11bn a year announced in the June Budget, in what Osborne has claimed will be “the greatest reform to our welfare state for a generation”.
The chancellor confirmed that a new universal credit would replace benefits and tax credits over the next two parliaments.
“The guiding rule will be this: it will always pay to work. Those who get work will be better off than those who don’t,” Osborne said.
People on disability living allowance will be excluded from the new benefit cap which will prevent those on benefits from receiving more than the average income of working families.
Further details of the universal credit will be set out in a Department for Work and Pensions White Paper.
The reform will be complemented by a new work programme, in which private and third sector providers would be paid for helping people back to work on the basis of the savings they create for the taxpayer.
The Treasury said savings from withdrawing child benefit from higher-rate taxpayers would fund above-inflation increases in child tax credit, ensuring that “the overall impact of the spending review will have no measurable impact on child poverty in the next two years”.
Osborne said benefit bills had risen by 45% under the previous government, with welfare totalling one-third of public spending.
Carole Cochrane, chief executive of the Princess Royal Trust for Carers, warned that the benefit changes could nullify the additional £2bn announced for adult social care in the CSR.
“We feel there is a real risk that support provided by social care will be wiped out by the loss of the family household income through benefit reductions,” she said.
“Our latest research revealed the perilous financial situation that carers are already in; with one in three carers not wanting to wake up in the morning because of their dire financial circumstances. Carers and their families can’t afford to lose any more.”
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