Welfare Reform Act 2012 and disabled people
The following measures are included in the Welfare Reform Act 2012 that is currently going through Parliament.
Universal Credit
Universal Credit will provide a new single system of means-tested support for working-age people in and out of work. Support for housing costs, children and childcare costs will be integrated in the new benefit. It will also provide elements for disabled people and carers.
A key objective of Universal Credit is to support all people to participate fully in society, including remaining in or returning to work. Therefore, Universal Credit will provide more generous support for disabled adults and disabled children than it does for people in similar circumstances who are not disabled.
We intend that people who are assessed as having limited capability for work, or limited capability for work-related activity as well, should be provided with more support than other people to reflect the extra costs of having longer durations on benefit.
- Universal Credit policy briefing notes
- Universal Credit - equality impact assessment (258KB)
- Universal Credit – impact assessment (286KB)
Changes to Employment and Support Allowance
Time limiting contribution-based Employment and Support Allowance to one year for people in the Work Related Activity Group
The Welfare Reform Bill applies a one-year time-limit to contribution-based Employment Support Allowance (ESA) for those in the Work Related Activity Group. This change will be introduced in April 2012 and will have an immediate effect on people who are currently claiming contribution-based ESA as well as new claims.
People in the ESA Support Group will be unaffected by the change, as will anyone receiving income-related ESA regardless of which group they are assigned to.
After a year, those people who have no other means of supporting themselves may qualify for income-related benefits – there will always be a safety net for those who need it. Of those affected by time limiting contribution-based ESA, we estimate that 60 per cent will be able to claim some income-related ESA. Other benefits such as Housing Benefit and Disability Living Allowance may be available to those claimants affected by the introduction of a time-limit.
- Proposed changes to contribution-based Employment and Support Allowance – questions and answers (70KB)
- Time-limiting contributory element of Employment and Support Allowance – equality impact assessment (124KB)
- Time-limiting contributory element of Employment and Support Allowance – impact assessment (152KB)
Abolition of Employment and Support Allowance “youth” provisions
The Welfare Reform Bill 2011 abolishes the “youth” provisions which allow certain young people to qualify for contribution-based Employment and Support Allowance (ESA) without having to pay National Insurance contributions. These provisions are referred to as the ESA "youth" provisions.
From April 2012, all new claims under ESA "youth" will be subject to the same National Insurance contributory conditions as all other claimants. If they qualify for contribution-based ESA, and are then placed in the Work Related Activity Group, a one year time-limit will also apply.
It is estimated that 90 per cent of those affected by the abolition of ESA "youth" provisions will qualify for income-related ESA, either at the same rate as they would have been getting on contribution-based ESA or at a lower rate as a result of other income being taken into account.
- Proposed changes to contribution-based Employment and Support Allowance – questions and answers (70KB)
- Youth provisions in Employment and Support Allowance – equality impact assessment (117KB)
- Youth provisions in Employment and Support Allowance – impact assessment (96KB)
Employment and Support Allowance claimants’ requirement to undertake work-related activity
From 1 June 2011, the Employment and Support Allowance (Work-Related Activity) Regulations introduced a new requirement for certain recipients of Employment and Support Allowance (ESA) to undertake work-related activity. This is any activity which helps the claimant to obtain work, remain in work or to be more likely to obtain or remain in work.
The Welfare Reform Bill 2011 will make it clear that work-related activity can include work experience or a work placement, depending on the individual’s circumstances. We expect these powers to be introduced by April 2012.
Work experience and work placements can help the claimant understand more about their career options and skills, increase confidence, and provide valuable experience that makes them more attractive to an employer.
Advisers would use the power flexibly and devise a tailored plan suitable for each claimant expected to undertake work-related activity. This means that the nature and amount of work-related activityrequired could vary from claimant to claimant but the requirement must always be reasonable in the individual circumstances.
Those receiving ESA who are in the support group, lone parents with a child under the age of 5 or carers will not be required to undertake work-related activity.
Personal Independence Payment
The Government plans to replace Disability Living Allowance (DLA) with a new cash benefit, called Personal Independence Payment from 2013-14.
Benefit cap
From 2013 the Government will introduce a cap on the total amount of benefits that working-age people can receive so that households on working-age benefits can no longer receive more in benefits than the average wage for working families.
On its introduction it is estimated that the cap will be set at £500 per week for couple and single parent households and the cap will be set at £350 per week for single adult households without children.
In recognition of the additional needs that disability can bring, all households that include somebody who is receiving Disability Living Allowance or Constant Attendance Allowance will be exempt from the cap. This exemption will be extended to include a member who is in receipt of Personal Independence Payment which will replace DLA for individuals of working age (aged 16 to 64) from April 2013.
To increase the incentives to work, households entitled to Working Tax Credit will also be excluded from the benefit cap.
War widows and widowers will also be exempt.
In the first instance the benefit cap is likely to be delivered by local authorities through Housing Benefit payments. In the long term it will be administered as part of the new Universal Credit system.
