DR UK raise “hidden” 55% ESA cut for under 25 year olds with Minister

Tue,4 April 2017
News Benefits

Disability Rights UK has written to the Minister for Disabled People to raise concern about three significant “hidden” welfare benefit cuts to disabled people.

Read extract from letter

The welfare benefit cuts are:

  • a 55% per week reduction in the rate of Employment and Support Allowance/Universal Credit for under 25 year olds; (Note: this has been amended following representations by Disability Rights UK)
  • full-time disabled students not bring eligible for Universal Credit until they have received a work capability assessment; and
  • the freezing of the lower disabled child element of Universal Credit.

They are “hidden” as they have been subject to no specific Government announcement, no statement of policy intent, no specific impact assessment and subject to no prior consultation.

ESA for under 25 year olds

The Government’s intention to remove the work-related activity component (WRAC) for post April 2017 ESA claimants is well-known (having been announced in by in the Summer Budget 2015).

The reform was widely criticised by Disability Rights UK and all other disability charities and disabled persons’ organisations. For example see our submission for the Parliamentary review on the proposed £30 week cut to ESA.

However, what was hidden in the run-up to the issuing of the new regulations is an effective reduction of around 55% a week in the amount currently awarded to certain under 25 claimants of ESA and UC.

The personal allowance for an under 25-year-old ESA and UC claimant is £57.90 per week.

Prior to 3 April 2017, following a work capability assessment (WCA) identifying their limited capability for work, an under 25-year-old ESA and UC claimant was paid the work-related activity component (WRAC) or the support component.

However, in addition their personal allowance was increased to that paid to those 25 years or over - £73.10 per week.

However, the new regulations also provide that their personal allowance remain at only £57.90 a week even after being found to have a limited capability for work.

This is the same rate as Job Seekers Allowance for the under 25s.

This is a very significant weekly loss of benefit of £50.25 (a reduction of around 55%).

But neither the Explanatory Notes to the Welfare Reform and Work Act 2016 nor its Impact Assessment refer to the reduction in the personal allowance for under 25s.

The stated policy aim of the removal of the WRAC was that it was acting as a “perverse disincentive” to disabled people gaining employment.

Does the Government believe that a 55% cut to the ESA rate for young disabled people will be a greater incentive to them finding work? Is there any evidence that this cut will further its aim to halve the disability employment gap?

Disabled Students and Universal Credit

A disabled full time student is eligible for ESA if they receive DLA or PIP.

They are “treated as having a limited capability for work” on this basis.

A work capability assessment (WCA) is carried out only to see if they should be in the support group (and so receive a higher amount of ESA).

However, we have recently confirmed that under UC a disabled student cannot – except in very limited circumstances – be treated as having a limited capability for work.

This means that they cannot be awarded UC for living or rent costs until they have had a face to face WCA and been found to have a limited capability for work.

Not only will this mean some disabled people will not be able to face the financial week to week cost of being a student but they will also not be able to take up a residential college place.

Whereas many students work in the evenings and vacations to top up their loans, for disabled students this is usually much harder (for instance, employers are unwilling to put in adjustments for temporary work; Access to Work may not be available fast enough to enable someone to do a holiday job).

Disabled Child Addition of Universal Credit

The rates of the higher disabled child element of Universal Credit (UC), the child tax credit disabled child element and the child tax credit severely disabled child element have all been increased from April 2017.

The increases are as follows:

  • the disabled child UC Higher rate addition increase from £367.92 to£372.30;
  • the child tax credit disabled child element increases from £3,140 to £3,175 a year; and
  • the child tax credit severely disabled child element increases from £1,275 to £1,290 a year.

However, the lower disabled child addition for UC remains the same and will be frozen for four years i.e. it will remain at £126.11 until 2020.

There seems no logic to this, especially given the increases in the above rates of benefit related to disabled children.

DR UK is very concerned that we have been unable to discover any stated policy intent behind the freezing of lower disabled child element.

An extract of DR UK’s letter to The Minister of Disabled People is available here