Employment and Support Allowance: how it will work

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Hailed by the government as a positive change designed to move one million people off incapacity benefit into paid work, employment and support allowance (ESA) is a new benefit starting on 27 October 2008.

The changes affect anyone making a new claim for benefit because of limited capability for work caused by ill-health or disability on or after this date.

People already receiving incapacity benefit, severe disablement allowance or income support (IB/SDA/IS) because of “incapacity for work” on 27 October won’t have to claim ESA, but the government intends to move everyone on IB/SDA/IS over to ESA in the future. When this will be isn’t clear, and experience shows that such changes may not happen until years later.

Claim

However, people who stop receiving IB/SDA/IS for more than 12 weeks (or 104 weeks if they have been in some types of paid work or training for at least 16 hours a week) will have to claim ESA if they need benefits again.

The government also plans to use the new medical assessment (known as the work capability assessment or WCA) for everyone on IB/SDA/IS from 2010 and from 2009 for those aged under 25.

To make matters even more complicated, there are two versions of ESA. One is based on national insurance contributions but there is also an income-related version which is very similar to income support. Both versions pay the same core rates of benefit, but the income-related version pays more because of premiums, for example, for carers or severe disability, or housing costs for homeowners. Like jobseekers allowance, many people will have contributory ESA topped up by income-related ESA. However, unlike income support there is no disability premium in ESA.

Basic rate

For the first 13 weeks of a claim, claimants will receive the basic rate of ESA which will be the same as jobseekers allowance. Then they will have a work-focused interview to discuss their plans for finding work or improving work prospects. Work-focused interviews may be waived completely or deferred to later if the interview is not appropriate or will not be of assistance.

During this time, people will also undergo the WCA, and if they score above a particular threshold they will then move onto a higher rate of ESA. If they don’t, their ESA will be stopped – with a right of appeal to an independent tribunal.

Capability

A separate test to be carried out at the same time as the WCA will be used to decide whether the individual has limited capability for work-related activity. If this is the case, they will be paid the support component (£29 per week) on top of the basic ESA rate and if they qualify on low income grounds for the income-related ESA, they will also receive the enhanced disability premium added (£12.60 per week).

If the individual does not pass the limited capability for work-related activity test, (but does pass the WCA), the work-related activity component (£24 per week) will be added to their basic ESA. They must then agree an action plan and attend five more work-focused interviews. Failing to attend an interview or agree an action plan without good cause will result in the work related activity component being cut by 50% for four weeks and then stopped completely until they comply.

Work-focused interviews will mostly be carried out by private contractors, though sanctions for non-attendance can only be imposed by DWP staff.

Sanctions over support

Sophie Corlett, Mind’s director of policy, is concerned about this: “Increased conditionality is the wrong approach to get people with mental health problems back into work. Pressurising people into work before they are ready will not be beneficial to the employee or the employer. There is a fatal misunderstanding here about how to get the best out of someone. We need to see the use of carrots, not sticks, as a form of motivation.”

Corlett isn’t the only one concerned. Paul Treloar, policy director at the Disability Alliance, says: “The best person to make decisions about what employment is acceptable is the disabled person themselves, thus we would like to see people being given choices and encouragement rather than threatened with sanctions.”

Currently, people on IB/SDA/IS can be exempted from the personal capability assessment if they fall into certain categories – if, for example, they receive the highest rate disability living allowance care component or they have a severe mental health problem or learning disability.

Exemptions

ESA will have far fewer exemptions – for patients undergoing certain types of chemotherapy, pregnant women where there is a risk to health, who are in the later stage of pregnancy or who have recently given birth, carriers of certain infectious diseases or hospital in-patients. It will also be possible to be “treated as” passing the WCA if someone has an uncontrollable life-threatening disease or if there is a risk to health or safety if someone was found to not qualify for ESA. This latter category will be a crucial fall-back position for the many social care service users who currently don’t have to face medical assessments.

Corlett says: “There is a danger that large numbers of people could fall foul of the new test and be coerced into unsuitable employment without the necessary support.”

Income cuts

ESA will have improved rules which will allow some individuals to do certain types of work for less than 16 hours a week. The amount which can be earned before affecting income-related ESA will be the same as contributory ESA – up to £88.50 per week at current rates (expected to rise in October).

But, there are problems with ESA rates and most claimants will receive less compared with now. Treloar says: “We are disappointed that ESA rates have been set at levels which mean that most will be paid less than current levels of means-tested income support. While a minority of single ESA claimants in the support group will be better off, analysis suggests that almost everyone in the work-related activity group and most couples will be worse off. Some by as much as £12 a week.”

The suspicion lingers in the sector that if the ESA fails to move significantly more people into paid work then the changes will prove merely a way of cutting benefits.

Assessing for capability

There’s a lot more testing and sanctioning in employment and support allowance (ESA). Many of the tests will not be carried out by doctors, but by other health professionals and past experience suggests that these can be rushed or of poor quality.

Altogether, people will face three tests, usually carried out at the same time: the work capability assessment, the limited capability for work-related activity assessment and the work-focused health-related assessment. The latter does not form part of assessing benefit entitlement but examines people’s aspirations and the barriers they face obtaining paid work.

If sufficient evidence is included in the initial ESA claim, a Department for Work and Pensions (DWP) decision-maker can bypass the two main assessments and social care practitioners can play a useful role supporting service users with this.

The work capability assessment (WCA) uses a scoring system which is similar to the current test. But there is a wider range of scores for problems such as mental health, learning disability and continence (inevitably, given the abolition of exemptions). The scores for lower level incapacities have been abolished in ESA and while for IB/SDA/IS one can score sufficient points by collecting a range of lower scores, this will not be possible under the new test. The DWP estimates that 60,000 people a year will fail the ESA medical assessment and most will then move onto jobseeker’s allowance which will be significantly less than the rate of ESA payable after 13 weeks.

Key points

● Employment and support allowance (ESA) starts on 27 October.

● The changes affect anyone making a new claim for benefit because of limited capability for work caused by ill-health or disability on or after this date.

● A new medical assessment, the work capability assessment (WCA), will be used for everyone on incapacity benefit, severe disablement allowance or income support from 2010 and from 2009 for those aged under 25.

● For the first 13 weeks of a claim, claimants receive the basic rate of ESA which is the same as jobseekers allowance. Then they have a work-focused interview to discuss their plans for finding work or improving work prospects.

● If people score enough points in the WCA, they then move onto a higher rate of ESA. If they don’t, their ESA stops.

● A separate test also carried out at the same time as the WCA will be used to decide whether they have limited capability for work-related activity.

Neil Bateman is an author, trainer and consultant in welfare rights and social policy issues. Read more about him on his website.

• More information about ESA is available on the Disability Alliance and Child Poverty Action Group websites.
  
• Find more on ESA in the Community Care archive.
  
• Is ESA a benefit cut or a way out of poverty? Share your views here.

This article is published in 24 July edition of Community Care magazine.