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Massive incapacity benefit u-turn: no move to ESA, no compulsory activities

14 May 2008
Almost all 2.6 million current incapacity benefit claimants are being abandoned to ‘a culture of incapacity and despair’ in an astonishing government u-turn.

DWP u-turn road signCurrent claimants will still be forced to take the new, much harsher work capability assessment. But, even if they pass, they will remain on incapacity benefit rather than being moved onto the higher paying employment and support allowance. Nor will they take part in Pathways to Work with its programme of enforced interviews and action plans.

For well over a year, the government’s line has been that all current incapacity benefits claimants will be ‘migrated’ onto ESA. In February 2007 The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton) told the House of Lords:

“As has been made clear during the passage of the Bill, it is our intention that, over time and as resources allow, existing incapacity benefit cases will be migrated across to the employment and support allowance, so that they too may benefit from the new complementary structure of benefit and support, which will also help to smooth administration and reduce complexity.”

The noble Lord did not give a timescale for the migration, but it was clear that the intention was to do so sooner rather than later:

“We want to migrate existing customers on to the new regime as resources allow, but we need to do so in a controlled manner. Therefore, we do not intend to start the mandatory migration process immediately at the commencement of the employment and support allowance. This is consistent with previous changes of this scale and will allow us to make sure that the new process is bedded down, to make sure the migration is as smooth as possible for customers and to reduce the risks around such a large undertaking.”

Bedding down was a process that was expected to take months and the initial impression given by the DWP was that claimants under 25 and those with children would be ‘migrated’ in 2009 with everyone else following between 2010 and 2013.

However, the DWP have clearly had a change of policy, one that was signalled with typical political doublespeak when Alistair Darling announced in his budget speech that all incapacity claimants would be assessed under the WCA between 2010 and 2013. What Mr Darling did not say was what would happen to those who passed the WCA - would they be 'migrated onto ESA or wouldn't they?

Instead, it was left to an obscure Jobcentre Plus newsletter for 'stakeholders' and 'partners' to spell out the reality of the huge u-turn. According to the In Touch newsletter, from 2010 to 2013 incapacity benefit claimants will indeed ‘be subject to a WCA when they are due to have their benefit entitlement reassessed’ . However:

‘Those who satisfy the WCA will remain on IB, and will be able to volunteer for Pathways.’

In other words, with the possible exception of claimants under 25 and those with children, for whom the situation is still unclear, no incapacity claimants will be moved onto ESA before 2014 at the very earliest. Five and a half years is not a credible bedding down period for the new system - particularly as Pathways has been piloted for years and the new WCA test is largely a revision of the PCA - and it now seems more likely than not that there are no current plans to ever migrate incapacity benefit claimants.

Costly claimants
What might the reason be for such an astonishing about face?

It seems extremely likely that it’s simply down to a faltering economy. It will be cheaper to keep current claimants on the lower paying incapacity benefit than to move them onto the higher paying ESA. This is especially true for claimants who would be eligible for the support component.

In addition, the whole outsourced Pathways process is likely to prove very expensive initially, even in the unlikely event that it does eventually pay for itself via savings in benefits. By far the most costly and time consuming claimants to move back into work will be those who have been out of work for the longest period. It is undoubtedly much cheaper, at this stage at least, simply to write them off.

Relief and despair
For many current incapacity claimant this news is likely to come as a huge relief. Provided they can manage to pass the WCA they have the prospect of being left unmolested by the DWP's private sector bounty hunters. The relative peace of mind this will offer may well be seen as worth the loss of the several pounds a week of additional income under ESA.

Always provided, of course, that the DWP don't go ahead with their threats to introduce further 'conditionality' into the incapacity benefit regime, though even this is unlikely to involve the private sector. The news today that the DWP is to carry out a large scale consultation on further welfare reform suggests that ministers no longer have a clue what to do with incapacity benefit claimants.

But this u-turn also leaves some big questions unanswered. For example, what has happened to the whole concept of reducing benefits complexity now that we will have a system under which sick and disabled people may be in receipt of incapacity benefit, income support or employment and support allowance, with different rules attaching to each?

And how will the WCA be adapted for incapacity benefit claimants, for whom no support group exists? Will those who pass the test for the support group be the new category of exempt claimants?

But, most important of all, what are the government’s long-term plans for current incapacity claimants. Are they to be abandoned on lower paying incapacity benefit until death or retirement removes them from its rolls? After all, noble lord McKenzie told his peers that the reason why claimants were being migrated was:

“to move away from a culture of incapacity and despair to a new regime of rights and responsibilities, where there is opportunity for all.”

And only two months ago James Purnell , Secretary of State for Work and Pensions, announced that ““Gone are the days when writing a sick note is writing people off for life, ESA will give more financial support to the poorest, most disabled people in society while extending the opportunity of employment to all those who can work.”

Now, it seems, that the government have decided that a culture of incapacity, despair and being written off for life are fine by them, as long as the write-off can be financed on the cheap.