A Law Centre (NI) Response - February 2010

1.  Introduction

Law Centre (NI) is pleased to respond to SSAC’s request for evidence relating to the DWP’s proposals regarding the ESA (Transitional Provisions) (Existing Awards) Regulations 2010 (the Regulations).  This response addresses some UK-wide matters arising from the proposals and also focuses on specific Northern Ireland issues.

Law Centre (NI) is a public interest law non-governmental organisation.  We work to promote social justice and provide specialist legal services to advice organisations and disadvantaged individuals through our advice line and our casework services from our two regional offices in Northern Ireland.  It provides a specialist legal service (advice, representation, training, information and policy comment) in five areas of law: social security, mental health, immigration, community care and employment.  Law Centre services are provided to over 450 member agencies in Northern Ireland. 

2.  Northern Ireland Circumstances

As Northern Ireland is not referred to in the Department’s proposals, it seems fair to assume that that the circumstances in Northern Ireland have not informed these proposals.  Northern Ireland presents particular circumstances with regards to welfare and arrangements to move people into employment. In Northern Ireland, the approach to social security, training and employment programmes is divided into two government departments: the Department for Social Development (DSD) is responsible for social security benefits including benefit sanctions whereas the Department for Employment and Learning (DEL) is responsible for training and employment programmes. This is in contrast to GB, where both areas are handled through the Department for Work and Pensions (DWP).

We are aware that statistics for Great Britain confirm that 69 percent of claimants are being found fit for work following a WCA with only 10 percent of claimants being placed in the ‘support group’.  These figures demonstrate a higher rate of claimants coming off benefit that originally projected by the Government.  Further although more limited, data in relation to WCA appeals confirms that to date 62 per cent of DWP decisions on appeals on ‘Fit for Work’ decisions have been upheld.  Unfortunately statistical data on ESA and in particular the WCA is limited and we have been unable to obtain a statistical breakdown regarding the impact of ESA and WCA on claimants in Northern Ireland.  The most recent figures available from May 2009 indicate that there are 7,828 claimants on ESA in Northern Ireland.¹

3.  Key Issues

We highlight a number of areas of concern in regards to Part 1 of the document relating to Changes to ESA.  These concerns are detailed below.

3.1    Abolition of Income Support

We welcome a number of the proposals to streamline the move from Incapacity Benefit to ESA and to protect a customer’s overall benefit income at the point of transfer by ensuring that no one who converts to ESA has his/her benefit reduced.  While we remain unconvinced that ESA (and JSA) alone will be able to offer the flexibility required in more complex circumstances, such as when a claimant qualifies for support under more than one category eg a lone parent with caring responsibilities for a disabled child. The Law Centre continues therefore to support the retention of Income Support.

3.2    Transitional Protection

These concerns notwithstanding we note the DWP’s plans to offer transitional protection to customer’s transferring from one benefit to another.  There is an important role for DWP (DEL and DSD in Northern Ireland) in ensuring equity between different groups of claimants and, more generally, in the structure of benefit entitlement when changes of this nature occur.  There is often a tension between the political impulse to moderate numbers of potential losers and scale of losses, and the desire to avoid further complicating benefits administration.  Consideration must be given to whether the proposed changes will have the effect of discriminating unfairly between those who establish entitlement before the date of change and thus benefit from transitional protection and those whose entitlement arises only later. The consequence is that individuals whose circumstances are otherwise identical are subject to different social security regimes.  On balance, we favour the use of transitional protection given the scale of the change.

There are two groups of claimants who will lose out significantly.  First, claimants whose private income exceeds their child allowance will lose entitlement to income related benefits except for Housing Benefit.  This will lead to a loss of passport benefits including free school meals.  This can represent a significant worsening of financial circumstances.  Second, a number of claimants moving from Incapacity Benefit to ESA will move off a benefit which is not taxable income to one that is.  Where the claimant (or partner) has other income this will have a significant impact.  Unlike the first group of claimants this group will be better off than others on ESA.  In our view, as a minimum the first group should receive protection of passport benefits and the second group should be made fully aware of the ramifications of the change. 

3.3    Timing

We are concerned by the timescale outlined within the consultation document with conversion scheduled to begin from October 2010, albeit with a phased start to test the conversion process.  The large customer numbers being migrated is a significant undertaking and we are unconvinced that the timescale proposed is realistic.  We therefore recommend that the time scale is either extended or that older claimants on Incapacity Benefit who will be near to retirement but not reaching pension age by the conversion period also be made exempt.  This would reduce the number needing to be migrated and make the conversion programme more manageable.

3.4    The Conversion Phase

We note the proposed changes that will result in customers who have private income that exceeds their child allowance potentially losing entitlement to income related benefits, other than Housing Benefit and Council Tax Benefit.  We would welcome further information regarding what happens to entitlement to passport benefits in such cases.

3.5    Erosion of the Transitional Addition

We also note the statement that transitional protection will not extend beyond 6 April 2020. This is in line with the Welfare Reform Act 2009’s transitional protection for those receiving dependent additions in April 2010 and for Carer’s Allowance also ending in April 2020 if entitlement has not already ended.  We do not think that carers or those on maternity leave who have not worked sufficiently long enough to claim statutory maternity pay should be penalised where they have a partner who is also not working. 

3.6    Appeals

We note the statement that there are no reliable estimates at this stage for the numbers likely to appeal because the ESA appeal rates have not yet reached a steady state.  We would welcome information regarding what the early figures indicate as these emerging findings will give some indication as to the likely trend even if they are not final at this stage.  We are aware that figures regarding WCA appeals heard on ‘Fit for Work’ decisions on ESA claims have been released by DWP and would welcome similar publication of wider ESA appeal decisions.  The numbers failing the WCA test for new claimants was underestimated by the Department.  We accept that for long standing Incapacity Benefit claimants the percentage failing will be lower, nonetheless, there is the danger of a further under-estimate which will quickly blow of course the tight timeframe envisaged for conversion.

3.7    Compliance with the conversion process

We are concerned by the continued focus by the DWP on the use of sanctions in its changes to the welfare system in the UK.  The proposed increased use of sanctions could have substantial cost implications given the potential associated rise in appeals. The Department should produce its evidence that demonstrates that sanctions are effective especially in light of the report of the Social Security Advisory Committee, which questions the efficacy of sanctions.² The use of sanctions is likely to have substantial adverse implications for dependents as well as claimants.

The imposition of conditionality and sanctions as part of the conversion scheme may have a negative effect on the relationship between a claimant and his/her Personal Adviser.  Further, given the risks of non-compliance for many people with mental health issues non-compliance, as a result of ill health, consideration must be given to the detrimental effect the ongoing threat of loss of income would have on an individual.  It therefore becomes particularly important that good quality information and support is provided to claimants moving from Incapacity Benefit to ESA.  The unrealistic timeframe gives rise to a concern as to whether this prerequisite can be met.

4.  Conclusion

Law Centre (NI) welcomes the opportunity to respond to this consultation paper.  We trust you will find our comments helpful.  If there is any further way in which we could contribute to this process we would welcome the opportunity to do so.