Employment and Support Allowance: a short introduction

Employment and Support Allowance (ESA) will be introduced this October. This replaces Incapacity Benefit and Income Support on the grounds of incapacity for new claims.

As part of the ESA process, all persons claiming will undergo a Work Capability Assessment.  This will look at what they are able to do in the workplace and will determine which benefit rate they receive.

When ESA launches this autumn, the rates below will apply.

It is estimated more people will not pass the Work Capability Assessment compared to the old assessment – resulting in 20,000 fewer people joining the sickness benefits system each year. People who do not satisfy the assessment will have to claim Jobseeker’s Allowance and will be expected to attend interviews and work programmes to help them return to work.

Full notes will be written in the autumn of 2008.  Copies will be emailed to members of Law Centre (NI) and posted on our website. 

Meanwhile, the following article, written for the Law Centre's magazine Frontline by Siobhán Harding, policy officer at Citizens Advice, gives a fuller description of ESA and expresses concerns over the workings and impact of the new benefit.

Employment and Support Allowance

What is ESA?

Employment and Support Allowance (ESA) is a benefit for people incapable of work because of ill health and/or disability. It replaces Incapacity Benefit for new claimants on or after 27 October 2008. It also replaces Severe Disablement Allowance (SDA) and Income Support paid on the basis of incapacity for work for new claimants from this date.

People claiming Incapacity Benefit, SDA or Income Support on grounds of incapacity for work before 27 October will continue on these benefits until a later date when it is likely that they will transfer to ESA. From April 2010 all Incapacity Benefit claimants whose claims started before 27 October 2008 will be required to take the Work Capability Assessment.

There are two types of ESA - Contributory ESA and Income-related ESA. Many of the rules for entitlement to Contributory ESA are similar to those for Incapacity Benefit. Income-related ESA will be paid to people who meet the general conditions of entitlement for ESA but do not meet the contribution conditions for Contributory ESA. It will also be paid to people entitled to Contributory ESA who are on a low income. These claimants will get both Contributory ESA and Income-related ESA. The means test for Income-related ESA will be similar to the Income Support means test.

Once a person has claimed ESA, they will receive it initially for up to thirteen weeks. During this time, a work capability assessment (WCA) will be carried out to determine what should happen to the person’s claim after the initial thirteen weeks. This replaces the personal capability assessment (PCA) for Incapacity Benefit. The WCA will be carried out by a doctor from Medical Support Services (MSS). The legislation allows for this to be carried out by a health professional, although in Northern Ireland it will be a doctor approved by the Department.

Work capability assessment

The WCA is actually made up of three separate assessments, although not all ESA claimants will have all three assessments. The assessments are:

Work-focused interviews

Claimants will be expected to participate in an initial work-focused interview unless they are terminally ill, have a serious medical condition or are in the support group. The work-focused interview will usually take place about eight weeks after the initial claim. As with work-focused interviews currently being used for Income Support and Incapacity Benefit claimants, a personal adviser will discuss work prospects, the steps the claimant is prepared to take to move into work and the support available. The interview can be waived or deferred in certain circumstances.

Amount of ESA

The amount a claimant can receive is determined by whether they are entitled to Contributory ESA or Income-related ESA or both. During the first thirteen weeks, an ESA basic allowance will be paid at a flat rate, set at the same rate as JSA. This is £60.50. A claimant under the age of 25 will receive a reduced rate during this thirteen week assessment phase of £47.95. After the thirteen week assessment phase, a claimant who continues to receive ESA will be able to receive one of two additional payments with their ESA, known as components, on top of the basic allowance. A claimant in the work-related activity group will be entitled to the work-related activity component and a claimant in the support group will be entitled to the support component. The work-related activity component is £24.00 and the support component is £29.00. A claimant under 25 will receive the full rate of the basic allowance after the first thirteen weeks rather than the reduced rate.

For Income-related ESA, a claimant’s applicable amount may also include various premiums which they may be entitled to both during the thirteen week assessment phase and after this time. These will be calculated in a similar way to the premiums for Income Support and Income-based JSA. However, there is no disability premium as the support component and work-related activity component of ESA are meant to replace this. The four premiums that will be payable are carer’s premium, severe disability premium, enhanced disability premium and pensioner premium.

Sanctions

A claimant in the work-related activity group will have strict work-related conditions imposed which they must meet in order to continue receiving the full rate of ESA. If they fail to do this they may be sanctioned. If a sanction is imposed, for the first four weeks the additional payments (that is, the work-related activity component) will be reduced by 50 per cent. After these four weeks, the work-related activity component will be removed altogether. The sanction will last as long as the claimant fails to comply with the requirement to take part in an assessment, participate in interviews or participate in an identified work-related activity.

Concerns

The government believes that change is needed so that the focus is on what a person can do rather than what they cannot do. It has estimated that this will result in ten per cent of people losing their current entitlement and being required to claim other benefits, most likely JSA.

It is difficult to provide detailed policy comment on ESA and how this shift in focus will work in practice as it has not yet been introduced. However, there is likely to be a significant impact in Northern Ireland as there are currently 112,000 Incapacity Benefit claimants here, 10.39 per cent of the working population. This compares to GB where there are 2.6 million claimants (seven per cent of the working population). Seventy four per cent of Incapacity Benefit claimants have been on the benefit for longer than two years, with 43.3 per cent of all Incapacity Benefit claimants suffering from a mental or behavioural disorder.

Previous assurances by government ministers that the main phase rate of ESA for those in the work group would be paid above the present long-term Incapacity Benefit rate have been broken. For example, people in the work-related activity group will receive just £84.50 after thirteen weeks. This compares with existing claimants on Income Support who are entitled to the disability premium and get £86.35 – a reduction of £1.85 per week for those on ESA. When combined with the lower income of £60.50 for the thirteen week assessment phase, this group will be over £400 worse off in the first year of their claim.

Concerns have also been raised about the new WCA which is designed to be tougher than the existing PCA. Changes have been made to the physical descriptors which will make it more difficult for people with intermittent or variable conditions to satisfy the test. Substantial changes have been made to the assessment for mental disabilities adding rather than taking away from the complexity of the assessment. The current assessment tends to focus on activities as they are affected by mental illness but the new assessment also focuses on the consequences of cognitive and intellectual problems. It is expected that more claimants with mental disabilities will accrue the necessary points under the new assessment but people with milder mental health problems may find the assessment harder to pass because the lower score descriptors have been removed.

There are also concerns about people, particularly vulnerable groups such as those with mental health problems, being placed into a work situation that in reality they cannot cope with. The network of Personal Advisers must be adequately resourced and have the ability to provide robust support mechanisms to claimants. This will ensure that the needs of those who need extra help and support are met and that people do not find themselves in a work environment which is beyond their capabilities.

It remains to be seen how ESA will work in practice and how it will impact on the lives of those with disabilities in Northern Ireland. It is hoped that it will not in effect undermine some of the government’s broader policy objectives on disabled people and on child poverty by reducing the income of families with disabled parents.

Siobhán Harding, Citizens Advice

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