The new ESA statistics are being abused but, says Owain Thomas, they could spur IP sales.
This week saw the latest release of government statistics covering applications for Employment and Support Allowance (ESA).
Once again the quarterly figures show that less than a quarter of applicants for the new benefit are successful.
With only 6% of claimants allocated to the most severely impaired Support Group and 16% placed in the Work Related Activity Group (and hence expected to search for some form of work with help) it is clear that access to paltry state benefits is difficult at best.
And this, of course, is good news for the income protection (IP) market.
As most advisers will know, IP is the natural fit to replace state incapacity benefits, and with those providers who publish claim rates hovering at or above 90% paid, its obvious that claimants are far more successful than those applying to the state.
However, what is not good news is the treatment of this data by certain members of the national media, and the Daily Express especially.
A headline on its article from Wednesday this week read ‘75% on sick are skiving' and went on to say: "Officials who carried out fitness tests on people claiming incapacity-related benefits found that 39% were well enough to get a job.
"A further 36% simply abandoned their claims as soon as they were told to undergo new work capability assessments introduced to weed out scroungers," it added.
This, unfortunately does not include those who have been callously treated by a system that has been tightened to extremes since the new benefit was introduced in 2008.
COVER has carried many reports about the new system, including those from the Department of Work and Pensions (DWP) itself, that rail against the severity and insensitivity of the new work capability assessments.
Decisions that included insisting chemotherapy patients attend work focused interviews have given job centre staff 'grave concerns' about the process and the citizen's advice bureau as seen a huge increase in the number of complaints it receives about the process.
More recently to DWP published reports branded the testing procedure as ‘impersonal and mechanistic' and underlined that there had been a ‘considerable shift in threshold' for claimants to be successful.
Given these circumstances, branding declined claimants as skivers is insulting and immoral.
As has been noted by some, the 36% who abandon their claim even includes those who have died in the process.
So now is surely the time to turn the tables on this negative press and for the IP industry to come together and publish all claim payment rates to show that where the state doesn't live up to expectations, insurers do.
