Making Work Pay for Disabled People
The report is summarised below. You can download the full report here 1.09 MB , and there is an editable Google doc version here.
Summary:
For some of the disabled people we support, work does not feel financially worthwhile. While money is rarely the only factor influencing a disabled person’s decisions about employment, the benefits system could do much more to ensure that work genuinely pays. The government is taking some positive steps to help people into work, but isn’t making the most of key tools at its disposal. This report highlights how our social security system could be reformed to make employment more financially rewarding for disabled people across three key areas:
Access to the work allowance. The work allowance can make a significant difference. For example, our client Elif is entitled to the Limited Capability for Work Related Activity (LCWRA) component of Universal Credit (UC) and the work allowance, and is £183.64 a month better off in work than she would be if she had neither. However, many disabled people struggle to qualify for a Limited Capability for Work (LCW) or LCWRA element, which currently determines access to the allowance. And planned government reforms will only make access worse. By restricting eligibility to UC health to those receiving the daily living component of Personal Independent Payment (PIP), almost 50,000 people who currently receive LCW or LCWRA but not PIP daily living would lose both UC health support and their work allowance. Instead of limiting access further, the government should be expanding disabled people’s entitlement to the work allowance.
The level of the work allowance. Despite the work allowance being an important mechanism, further steps could also be taken to ensure it helps disabled people be able to keep more of their benefits income before this starts being reduced. As it stands, an individual on UC will see their UC reduced after working 7.77 hours a week at National Living Wage (NLW) if they receive help with housing costs, and 12.93 hours a week if they do not. Raising the allowance would allow disabled people to keep more of their earnings before benefits are reduced, making work more financially worthwhile.
Protecting benefits when moving into work. Employment can put health and disability benefits, Carer’s Allowance, and linked support such as free prescriptions at risk. This creates further barriers to work for disabled people. The government’s proposed ‘right to try’ - which prevents employment from triggering a PIP review or Work Capability Assessment (WCA) reassessment - is a positive step but does not go far enough. Protections must be extended so that taking up work does not undermine entitlement at routine or future assessments for health and disability benefits. And more broadly, the department for Work and Pensions (DWP) should move away from blunt measures when assessing a person’s capacity for work, and take a more flexible approach to assessing whether and how much someone can work.
Instead of taking these important steps to reform the benefits system so that work pays more for disabled people, the government appears to be focused on cutting the already limited financial support available to disabled people. This short-term drive to cut costs is unlikely to deliver the long-term aim of increasing disabled people’s employment. Until the focus shifts from balancing budgets to investing in the support disabled people need to enter and thrive in work, those outcomes will remain out of reach.
The report is authored by Becca Stacey