Winners are losers

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.