The government says
that putting people on less generous benefits that are dependent on their
showing willingness to work could save £3.4 billion.10 Add in proposed cuts of
£1.8 billion to Housing Benefit, and we’re talking nearly half of the £11
billion the government wants to trim from the total benefit budget. Much of the
other half will be saved by pinning pension and benefit increases to the
consumer price index, which excludes mortgage and rental costs
Incapacity Benefit is intended to replace job income for
people whose medical condition makes them unfit to work. It is paid at a rate
of £91.40 a week for long-term claimants. Currently 2.6 million people of
working age, or one in 15 of the total working-age population, claim IB: the
largest group of economically inactive people, bar pensioners, in the
population. This, along with ESA, costs £8.5 billion a year. The government
wants to cut this budget by £2 billion, or 23.5%.
Employment and Support Allowance is payable at the
same rate as IB for people in the Work-Related Activity Group, who are deemed
to be able to resume or start work with support, and at slightly more (£96.85)
for people in the Support Group, who are deemed unable to work. However, as
explained above, it is intended to be considerably more difficult to claim and
is paid at rates similar to Income Support (which is £64.30 a week for
over-25s) while people are undergoing the assessment process.
Contributions-based ESA will only be payable, under new proposals, for one year
for people who are in the WRAG and who are getting paid non-means-tested
benefit from their National Insurance contributions. After this, it will only
be paid on a means-tested basis; the government predicts that 40% of people on
ESA will lose any entitlement to it at this point.
Disability Living Allowance is intended to pay
for the additional costs of living with a disability; anyone who fulfils
certain criteria can claim it, including people in work. At present, three
million people claim it (60% of them of working age) at a cost of £12 billion a
year. The majority of DLA claimants of working age are also on IB and/or Income
Support, though a large minority are employed. NAT estimates that 7500 people
with HIV, one in nine of those diagnosed, access DLA.
DLA is split into a
‘care component’ payable at three rates and a ‘mobility component’ payable at
two rates. The maximum payable for people on the highest rates is £121.25 a
week, with the lowest rates taken together coming to £37.90. At present,
medical certification is provided by claimants’ GPs, with medical inspection by
the DWP only in some cases.
The government wants
to cut a minimum of £1.4 billion, and up to £2.4 billion (20%), from the DLA
budget and to this end is going to replace it with a benefit called the
Personal Independence Payment (PIP), due to start in 2013 (see more in main
DLA is a ‘gateway’
benefit to a lot of other disability allowances including travel passes and the
disabled parking Blue Badge scheme. People who receive the higher mobility rate
are also entitled to join the Motability scheme, which provides a car in lieu
of that part of the allowance.
Housing Benefit (HB) is the single most expensive benefit
apart from pensions, at a cost to the taxpayer of £21 billion a year. The
government wants to save £1.8 billion from this budget. They will do this by
placing a cap on benefit payable to people in private accommodation so that the
maximum payable will cover just the lowest 30% of rents in the local area:
previously this cap was 50%. This has been criticised as forcing people to move
out of expensive areas like London and Brighton. This will disproportionately affect people with
HIV, who are concentrated in such cities and attend clinics there.
One other important
change, amongst others, is that people who have been on Jobseeker’s Allowance
for more than a year will lose 10% of their Housing Benefit.
The government eventually plans to unite all employment- and income-based
allowances into a single allowance called Universal
Credit. This will include ESA, Income Support, Jobseeker’s Allowance,
Housing Benefit and tax credits, but will exclude PIP, Carer’s Allowance and
some local benefits such as Council Tax Benefit.