News

The benefit system works in mysterious and perverse ways. Improvements in some areas can lead to problems in others - and two recent cases illustrate this point.

A social worker contacted me about some people with learning difficulties with whom she works. Until April 2002, her clients relied on an annual grant from the Social Fund to replace clothes and household items which are damaged due to wear and tear. But these clients were then given the "bonus" of being awarded incapacity benefit without a national insurance test. This increase in income had the effect of taking them above income support levels in many cases. And if you can't get income support you can't get a community care grant from the Social Fund either.


The effect is that each claimant loses a grant of about £700 in exchange for an increase in their benefit of less than £20 a week. This loss wipes out most of the gain. Those young people in independently rented accommodation are worse off, as their £20 "excess" income means a £13 contribution towards their rent as well. With the loss of the grant, they are about £350 a year worse off. Some young people even lost their right to free prescriptions when they lost their income support.

The only way around this problem is to try to have the income support entitlement increased so that it leapfrogs the incapacity benefit level. The most obvious way is to see whether the young person's income support should include more than just the basic "disability premium".

For example, if they receive the highest rate of disability living allowance (care), their income support should include an enhanced disability premium as well. They may also receive the severe disability premium if they get DLA (care) at middle or higher rate and they are treated as living alone and no-one is awarded invalid care allowance for them.

Either of these premiums could help get a disabled young person back on to at least a small amount of income support on top of any incapacity benefit.

The second case also involved invalid care allowance, which was recently extended to new carers older than 65, and severe disability premium. I heard from one 66 year old who had claimed the allowance (worth £42.45 a week) for looking after her disabled 88-year-old mother. The carer was pleased as the allowance was £10 a week higher than the retirement pension she used to get (her pension was reduced as she had worked abroad for many years).


But because the allowance was now in payment, her mother lost her severe disability premium within her income support, worth £42.25 a week. In total, the family lost more than £30 a week because of the "improved" system for older carers.

We resolved this case by the daughter withdrawing her claim for invalid care allowance on the grounds that she was no longer providing 35 hours' care a week. The premium was re-instated.

This situation is relatively rare - many older carers can get "underlying entitlement" to invalid care allowance (and by extension the income support carer premium) because it is below the normal retirement pension level without it affecting the disabled person's income support. Even so, it shows how gains can become losses unless attention is paid to detail.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.