The out-of-work benefits system for people with a health condition or disability is ‘broken' and should be scrapped in favour of a single working age benefit, a major report has urged.
Think tank Reform's report Working welfare: a radically new approach to sickness and disability benefits has called for the government to set a single rate for out of work benefits and reform the way claimants are assessed.
Reform wants the government to cut the weekly benefit paid to 1.3m sick and disabled people from £131 to £73. This is the same amount that Jobseeker's Allowance claimants receive.
The report has recommended that the savings resulting from removing the disability-related additions to the standard allowance should be reinvested into extra costs benefits (Payment Independence Payments) and support services.
The report's authors argued that having a higher rate of weekly benefit for sick and disabled people encourages stigma and for "people to stay on sickness benefits rather than move into work."
Charlotte Pickles, author of the report and a senior research director at Reform said: "Tweaking the system is not enough, achieving radically different results will require radical reform."
Current system
In the UK the employment rate for disabled people is 48%, compared to 81% for the rest of the working-age population.
Depending on the severity of health conditions, claimants currently receive receive either Jobseeker's Allowance (JSA), Income Support, ESA Work Related Activity Group (WRAG) or ESA support group.
Meanwhile claimants who experience additional costs due to substantial care
or mobility problems can claim Personal Independence Payment (PIP.) This can range from £21.80 to £139.75 a week depending on the person's condition.
When Employment and Support Allowance, which replaced Disability Living Allowance, was introduced there were around 2.6 million people dependent on sickness benefits. Today there are 2.5 million.
The ESA is currently s a benefit of £102.15 a week received by those who may be able to work at some point in the future. The government is currently consulting on reducing this by £30 a week in line with the JSA allowance. Recently the House of Lords voted against this proposed cut.
Back to work support
In the quarter to May 2015, just 1% of claimants in the much criticised ESA Work Related Activity Group (WRAG) were deemed able to carry out activity to help them move towards work and left the benefit as a result.
Reform said the current WCA combines an assessment of eligibility for benefits with an assessment of a claimant's capacity for work.
This model "inadvertently encourages claimants to focus on demonstrating how sick they are, rather than engaging in an open conversation about what they might do with support."
The report recommended the government should move to a single benefit with a single online application including a ‘Proximity to the Labour Market Diagnostic' to determine a claimant's distance from work and a health questionnaire to decide if a separate occupational health assessment is needed.
If it is, this should be carried out by an appropriate health professional, with oversight from an occupational health specialist.
Unlike the ‘pass/fail' WCA model, the assessment should take a broad view of a claimant's multiple health-related barriers to work, including ‘biopsychosocial' factors.
The claimant and health adviser should also, where appropriate, jointly produce a rehabilitation plan, and this should come with a personal budget, the think tank reocommended.
Reform recommended that the government should also scrap the current requirement to provide a Fit Note from a GP.
Pickles added: "The current out of work benefits system is failing people with a health condition or disability. The number of claimants has barely changed in a decade, despite Labour's introduction of ESA.
"Less than 1% of claimants leave ESA each month, yet more than half want to work. For many people, the current system is trapping them. The Government should move to a single rate of benefit paid to anyone out of work, set around the current JSA rate.
"They should recycle the savings from reducing ESA payments into better support for disabled people, increasing the rates of the extra costs benefit Personal Independence Payment and investing more in personalised back to work services.
"They should also scrap the WCA and introduce an online eligibility assessment to access the single rate benefit, with a completely separate occupational health assessment if needed.
"The latter should focus on what a claimant can do and, where appropriate, lead to a co-produced occupational health plan. Tweaking the system is not enough, achieving radically different results will require radical reform."
Further reading
Cost of disability £550 a month - Scope
Is it time to ditch the State Benefit link on Group IP?
Benefits cuts put cancer patients at risk of homelessness
Stress and mental ill health remain major causes of employee absence
