2011 04 Welfare Benefits

Sunday 1 May 2011

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Policy - DLA to be replaced by a ‘personal independence payment’

The government's proposal to replace disability living allowance (DLA) with a Personal Independence Payment (PIP)can be found in: 'Disability Living Allowance reform', (Cm 7984), (clck here for link) a consultation document, although the deadline for responses has passed.

The figures

Over 3 million people currently receive DLA (1.8 million are people of working age) with the total amount spent on the benefit this year forecast to be £12 billion. The Paper states that this is “a lot more than was originally expected” and refers to how the introduction of the lowest rate of the care component in 1992 was estimated to help 140,000 people, whereas today there are 880,000 people in receipt of lowest-rate care. The Paper comments:

“The complexity and subjectivity of the benefit has led to a wider application than originally intended. To ensure that the new benefit is sustainable and affordable in the long term, we must reform DLA to make sure we focus on those that need the greatest help to live independently.”

The case for reform

The Paper starts from the premise that DLA “has become confusing and complex” and that the rising caseload and expenditure is “unsustainable”. The Paper then goes on to criticise the application process for DLA:

“The current assessment for DLA consists of a claim form completed by the individual and considered by a Decision Maker in the Department, alongside other relevant evidence such as General Practitioner (GP) reports. The process is based on unclear criteria and often does not make the best use of available evidence. As a result, awards can be subjective, inconsistent and do not always focus support on those who need it most. Disabled people also tell us that the DLA claim forms are too long and can be difficult to understand. We believe that the existing assessment for DLA is therefore no longer fit for purpose.”

The Paper goes on to state that DLA can also act as a barrier to starting or restarting work:

“DLA is widely perceived to be an out-of-work benefit and receiving it appears to reduce the likelihood of being in employment, even after allowing for the impact of health conditions or impairments. There is evidence that people who receive DLA have lower work expectations. One reason for this appears to be that people fear they may have less money if they enter work. This is particularly the case for recipients of higher-rate DLA awards, who are often in receipt of a range of benefits.”

What will be new?

New elements in the Personal Independence Payment (PIP) include:

  • PIP will consider the impact an individual’s impairment or health condition has on their daily life instead of measuring the individual’s ‘care’ and mobility needs.
  • PIP will have two components linked to a range of activities that will be considered in the new assessment. One will be awarded on the basis of the individual’s ability to get around (the mobility component), the other on their ability to carry out other key activities necessary to be able to participate in daily life (the daily living component).
  • The claimant will need to continue to qualify for a further six months before an award of PIP can be made.
  • The PIP assessment process will include information from the claimant and health care professionals who look after them, and, in most cases, there will be a facetoface meeting with a healthcare professional who will look at the individual’s circumstances'.
  • PIP will take greater account of aids and adaptations.
  • PIP may include a form of the habitual residence test in addition to the current condition of being present in the UK for a period 26 weeks in order to be eligible for the benefit.

The activities that will be assessed under PIP

The Paper asserts that the PIP assessment “is intended to be a broader, more objective measurement of the impact of an individual’s health condition or impairment on everyday activities than those currently captured on the DLA claim form.” This represents a shift away from the medical model which is central to DLA:

“The new assessment will not be based solely on the medical model of disability and focused entirely on an individual’s impairment, but will instead focus on the ability of an individual to carry out a range of key activities necessary for everyday life.”

The Paper is thin on details but the following passage gives an indication of the types of activities that the PIP assessment will consider:

“Activities we assess could include, for example, planning and making a journey, and understanding and communicatingwith others. The extent to which an individual could carry out these activities would determine their eligibility for Personal Independence Payment and the level of their award. This should ensure that priority is given to those individuals who need to overcome the greatest barriers to living full and active lives. As part of this work, we know it is essential to ensure that the assessment adequately reflects the support needs of variable and fluctuating conditions.”

Some responses to the proposed reform

The “National Autistic Society” in its response (click here for link) says of the proposal to take aids and adaptations into account:

“Currently, if a person with autism has a support worker who helps them to use buses, this confirms that person’s entitlement to lower rate mobility as they obviously cannot travel independently. We are keen to ensure that under the new PIP rules, the fact that this support is potentially available to the claimant does not mean that they are no longer entitled to DLA.”

Mencap in its respond (click here for link) says, in relation to ‘DLA and work’:

“DLA is being misrepresented as an ‘out of work’ benefit. This is unhelpful and blurs its intended design – that is, a benefit intended to recognise the extra costs of disability, whether or not an individual is in paid employment. Such a focus fails to acknowledge that some people may be unable to work either due to their disability and/or discrimination. 65% of people with a learning disability have said they would like to work2. However, due to the multiple barriers to employment that this group face, less than 7% of those known to social services are in any form of paid employment. Stigma and prejudice about people with a learning disability remains one of the most significant barriers to employment faced by this group. A Mencap survey in 2008, found that over 60% of the general public thought that people with a learning disability cannot work.”

“Sense”, the national deafblind charity in its response (click here for link) says in relation to the removal of automatic entitlement:

“Sense is deeply concerned the Government’s decision to get rid of the automatic entitlement to DLA mobility component for deafblind people will leave many out in the cold and the needless bureaucracy will create confusion and cost the tax payer more.”

“Rethink”, the leading national mental health charity, (click here for link) on face-to-face assessments for PIP says:

“If a formal face-to-face assessment of disability is to be employed, then we must learn lessons from the Work Capability assessment. In particular the assessment should be reliable and valid, be as simple as possible, comprehensive and easy to administer and use clinicians who are adequately trained and accustomed to assessing people with mental health problems. The process must be subject to rigorous scrutiny and evaluation.”

‘Rethink’ on the reduction to two rates of benefit say:

“We are very concerned that people with mental health problems currently receiving lower rates of DLA may not qualify for PIP. We believe that this would be not just deeply damaging to those people concerned but also a mistake in terms of looking to reduce expenditure. Although such claimants may be receiving relatively small amounts of DLA, our experience suggests that this money can be instrumental in helping them to remain involved in their local community and staying well and out of hospital. Activities such as attending a class or travelling to a community group may seem relatively inconsequential but can have an immensely positive impact on people’s lives. For this reason, it should also be recognised that removing this support may well lead to deterioration in many people’s conditions, the knock-on cost of which, for health and social care services, would eclipse the savings made within the welfare budget.”

The ‘Disability Alliance’ in its response - ‘End of a lifeline? Ending Disability Living Allowance to introduce Personal Independence Payment’ (click here for copy) make the following general comments on the rationale behind the reform says:

“The Welfare Reform Bill states the intention of cutting DLA expenditure by 20% by 2015/16 – estimating a total loss to disabled people of £2.1 billion. This figure is higher than disabled people expected – previous analysis had used the current level of expenditure on working age adults only and Disability Alliance used a conservative figure of £1 billion being cut with 750,000 current disabled people using DLA losing support.

We believe the Government’s approach risks exacerbating the link between poverty and disability and comes at a time of considerable cuts to public services which will disproportionately impact on disabled people. We believe that DLA cuts represent disabled people shouldering a disproportionately large share of the burden of tackling the national deficit.

We have further concerns over the process for introducing the PIP and reform. But overall, the manner of Government announcements, lack of detail, shifting figures and rationale and poor analysis of risks has led disabled people to fear that the PIP represents the ‘end of the lifeline’ which DLA has provided. This is in the context of broader cuts to disabled people and their families’ support.”

Case law

In KS v Secretary of State for Work and Pensions (DLA) [2011] UKUT 29 (AAC), Judge Rowland announced the demise of the “traditional cooker” as an essential element in the “cooking test” for Disability Living Allowance. The claimant suffered from Ménière’s disease causing him to suffer from vertigo attacks, which sometimes resulted in him blacking out. Consequently he used “a slow cooker” to reduce the risk of injury to himself if he blacked out. A tribunal dismissed his claim for DLA. On appeal to the Upper Tribunal it was argued that the fact that the claimant had to use a ‘slow cooker’ due to his disablement was sufficient for him to qualify for the lowest rate of the care component. This was because the “cooking test” was to be judged by whether the claimant can prepare a “labour intensive reasonable main daily meal freshly cooked on a traditional cooker” and this proposition had been approved in Moyna v Secretary of State for Work and Pensions [2003] UKHL 44; [2003] 1 WLR 1929 (also reported as R(DLA) 7/03),. The Judge rejecting this submission made the following observations on the role of ‘traditional cooking’ and the “cooking test” (click here for transcript):

“The traditional cooker has become firmly embedded in the jurisprudence on the “cooking test” and it even makes an appearance on page 28 of the claim form for disability living allowance. However, it is not mentioned in the legislation and I have some difficulty in seeing why any sensible purposive construction of the legislation should insist on its use as the yardstick of the cooking test if adequate alternatives are available. The House of Lords in Moyna was not concerned with the method of cooking and Lord Hoffmann, giving the leading speech, did not explicitly approve the test the Commissioner had applied in that case, although he also did not criticise it. It was the meal that Lord Hoffmann said was required to be “traditional” and his emphasis was on it being home-cooked as opposed to it being convenience food or ready-cooked. That emphasis is not surprising, given both the purpose of the legislation and the obvious fact that what is traditional in one community in modern Britain may not necessarily be traditional in another,” (at para [15]).

In IB v Birmingham City Council and the Secretary of State for Work and Pensions and EHRC (as intervener) (HB) [2011] UKUT 23 AAC, the claimant was severely disabled, suffering from spinal and muscular dystrophy and was assessed as requiring 24-hour care. This was provided by a team of live-in carers employed by social services. The claimant lived in a self-contained flat in the private sector, which included a separate bedroom to accommodate his carers. However, the claimant was only eligible for Housing Benefit in respect of a single bedroom under the size criteria for Local Housing Allowance pursuant to regulation 13D(2) and (3) of the Housing Benefit Regulations 2006 (SI 2006/ 213) and Schedule 3B to the Rent Officers (Housing Benefit Functions) Order 1997 (SI 1997/1984). The claimant sought to rely on the principle that in certain circumstances there can be discrimination contrary to Article 14 in the failure to take positive measures to treat differently persons whose situations are significantly different, first established by the ECtHR in Thlimmenos v Greece (2001) 31 EHRR 15, and acknowledged and approved by the Court of Appeal in AM (Somalia) v Entry Clearance Officer[2009] EWCA Civ 634. It was submitted that the claimant’s special needs as a severely disabled person make this such a case, so that it is contrary to Article 14 for him not to have been given the extra room allowance. The claimant also pointed to the introduction of the special extra room allowance for the severely disabled from April 2011 (see SI 2010/2835) as a de facto acknowledgment that the previous rule was unjustified.

In the course of his decision Judge Howell QC noted that: (i) the increase from applying the two bedroom criteria instead of the single would be offset by the loss of the severe disability premium; (ii) the claimant already gets a “substantial amount of extra cash assistance under the benefits system by reason of his disability which is not available to non-disabled people”; and (iii) that the limitation of the room rates to “occupiers” is unrelated to disability or any other personal characteristic and applies to all alike. The Judge also referred to the wide margin of appreciation given to states in matters of social policy and the allocation of public resources and said this was particularly relevant to a complaint that additional amounts of social assistance, beyond those the national social security and social assistance systems already provide, are required as a matter of law to be awarded to groups of people by virtue of Article 14. The Judge concluded that the discrimination claim failed based for the same reasons given in AM (Somalia) The Judge said he gave particular weight to the following factors: (i) the practical need for a single clearly-defined rule; (ii) the existence of the supplementary system of discretionary housing payments to alleviate hard cases; and (iii) the unknown quantity of other groups who might with equal justice “emerge to claim special treatment and extra cash” The Judge observed that the evaluation and the provision of the extra resources for those who are severely disabled were questions for the legislature and the executive rather than the courts and it was an area which was “outside the proper scope of intervention under Article 14,” (click here for transcript).

Housing Benefit cuts start to bite for new claimants from April 2011

In its June 2010 budget, the Coalition Government announced major changes to the housing benefit scheme in the private rented sector by way of the local housing allowance (LHA) rules. These are due to start coming into effect from April 2011.

The cuts will affect all new claimants only. There is “transitional protection” for existing claimants until where the local authority determines a new maximum rent on the anniversary of the current claim. The claimant will then have protection for up to 9 months.

The immediate reductions - From April 2011

LHA will be capped at:

£250 per week for a 1 bedroom property;

£290 per week for a 2 bedroom property;

£340 per week for a 3 bedroom property; and

£400 per week for a 4 bedroom property.

LHA rates will be set at the 30th percentile of local rents instead of the median. (The cap for each size category will still apply if relevant.)

The changes are introduced by the Rent Officers (Housing Benefit Functions) Amendment Order 2010 (SI 2010/2836) (click here for link) in force from 18 March 2010 which amends the Rent Officers (Housing Benefit Functions) Order 1997 and the Housing Benefit (Amendment) Regulations 2010 (SI. 2010/2835) (click here for link) in force from 1 April 2011, which amend the Housing Benefit Regulations 2006 (SI 2006/213).

Note: From April 2011, claimants with a disability which means they require a non-resident carer may be entitled to extra HB to cover an extra bedroom:

Future reductions - From 2013/2014

From 2013/14 the basis of annual increases in the rate of LHA will change. LHA will be uprated in line with the consumer price index (CPI) inflation instead of actual rent increases. Studies have shown that on average rents have risen 2.57% per year above the CPI (moving broadly with earnings rather than prices), so this change will mean that the proportion of homes where the rent will be covered by LHA will gradually fall over time.

According to the Notting Hill Housing Trust Group’s written evidence to the Select Committee, the number of homes available will fall below 30% by 2013-14.). This means LHA will become increasingly divorced from actual housing costs.

“The Exodus of the poor from Central London”

The Cambridge Study, commissioned by Shelter (click here for link) considered the effect of three changes: the caps, the 30th percentile and the future plan to increase maximum HB by consumer price index inflation, instead of by reference to the actual local rents (from 2013). It identifies some areas which will fall within the “largely unaffordable” bracket and which will have no properties available for LHA claimants by 2016: City of London, Kensington and Chelsea, Westminster (3%). Others will be barely affected – Newham, Barking and Dagenham. However, Newham has described the effect of ex-tenants seeking cheaper accommodation in outer London as “importing additional poverty into the borough” and making it increasingly harder to provide public services.

According to the DWP’s own impact assessments, the cap in the proposed HB reforms is likely to have a negative impact on the following groups of claimants:

  • large families;
  • households affected by disability;
  • black and ethnic minority persons and;
  • pensioners.

CPAG has issued judicial review of the restriction of maximum household size to four bedrooms and caps on the amount of HB a household can receive (click here for link). CPAG has argued that the changes are contrary to the fundamental purpose of the HB which was originally intended to be a national scheme to prevent homelessness. CPAG also argues that the government has failed to have due regard to the general equality duties, under the Race Relations Act 1976 and the Sex Discrimination Act 1975, because ethnic minorities and lone parents will be disproportionately hit by the two cuts being challenged.

The cuts may also be in breach of the Human Rights Act 1998 because they have a disproportionately negative effect on these groups - such that there is a duty to introduce an exemption which recognises the material difference in their situation based on the Thlimmenos principle.

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