DLA reform: Making the benefit fit the budget

How many of your clients receive disability living allowance? How will it affect them – and you – if the DLA budget for people of working-age is slashed by 20% in three to four years time.

That will happen, if government plans to scrap DLA and replace it with a new personal independence payment (PIP) are approved by parliament.

So what would PIP look like, if introduced in 2013-14 as scheduled?

It would be concentrated on 16 to 64-year-olds, although it may in future also apply to those under 16, and those who keep DLA past their 65th birthday.

Like DLA, PIP would not be means-tested or based on national insurance contributions.

However, it would seemingly be aimed at those with more severe conditions. It would have two rates for “daily living”, replacing the three rates for care in DLA, so may exclude people currently receiving the lower care rate of DLA.

Two rates

While it would have two rates for mobility, as with DLA, these would be based on a person’s ability to get around, not primarily on their walking ability. That could mean, for example, that people who cannot walk but are deemed to be mobile through the use of wheelchairs, could be excluded.

The introduction of PIP would see the end of the automatic right to DLA that some people have because of their medical condition.

The ‘waiting period’ before a person qualifies for PIP would be six months after the onset of an impairment, instead of three as with DLA, although people who are terminally ill would still be able to apply immediately.

There would be no more lengthy claims forms. Instead, there would be a face-to-face assessment carried out by a Department for Work and Pensions-contracted doctor.

Denial

Though the DWP denies this, this could be like the work capability assessment (WCA) carried out for employment and support allowance claimants, which has led to a 65% refusal rate and a massive increase in appeals.

Existing claimants of incapacity benefit are being reassessed for ESA from 2011-14 and on this evidence many will be found fit for work and shunted on to the lower paying jobseeker’s allowance. As many of this group also claim DLA at the lower care rate, they face a double whammy.

Some carers could lose access to carer’s allowance as this is awarded to people on the basis that the person they care for claims DLA or attendance allowance.

DLA is undoubtedly a complex benefit. Many decisions, both for and against claimants, seem to have little consistency or reasoning. But PIP will have many of the same complexities but a more tightly-drawn set of eligibility criteria, a move that seems primarily driven by the pressure to cut costs. It appears that the DWP has simply made the benefit fit the budget.

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Gary Vaux is head of money advice at Hertfordshire Council

Please send any questions for him to mithran.samuel@rbi.co.uk