WCA Reforms Will Reduce Claimant Caseload by 37 Times More Than It Will Increase Employment

Mon,4 December 2023
News Benefits
In his Autumn Statement, the Chancellor announced that the Government is to push ahead with cost-cutting plans to tighten the work capability assessment (WCA), aimed to save the Department for Work and Pensions (DWP) nearly £1.3 billion a year by 2028.

While the WCA for existing claimants is not subject to change, new claimants of employment and support allowance (ESA) and universal credit (UC) will be subject to a revised test from 2025.  

The WCA is used in ESA and UC to determine what work-related conditions a Disabled person must meet to keep getting their benefit.    

If you are found to have a ‘limited capability for work-related activity’ (LCWRA), no work-related activity conditions will apply to you, and you will also be entitled to an extra amount of benefit.   

If you are found to have a limited capability for work  (LCW) while you have no work search conditionality, you are expected to undertake work related activity.  

Those in the UC LCWRA receive an extra payment of £390 per month 

In brief, the WCA changes, aimed at reducing the numbers of claimants in the LCWRA group are: 

  • Amending the LCWRA “Substantial Risk” regulations to realign Substantial Risk with its “original intention” of only applying in exceptional circumstances.  
  • Removing the LCWRA Mobilising activity  
  • Reducing the points awarded for the LCW Getting About descriptors. 

The Office for Budget Responsibility was created in 2010 “to provide independent and authoritative analysis of the UK’s public finances,” 

In its Economic and fiscal outlook: November 2023, OBR reflect on and forecast changes in light of the effect of policies in the Autumn Statement

The OBR says that the WCA changes are: “... estimated to reduce the caseload of those with the most severe incapacities [LCWRA] by 371,000 (13 per cent) by 2028/2029, with a corresponding increase of 342,000 (78 per cent) in the less severe incapacity caseload [LCW], resulting in a net reduction in the overall incapacity caseload of 29,000.” 

As those in the LCWRA group receive UC of an additional £390 per month, the OBR forecasts that the fiscal savings arising from the policy will amount to £1.3 billion a year between 2026/2027 and 2028/2029. 

“However, the OBR also says that: we expect the WCA reform to raise employment by around 10,000 by 2028/2029, as the loss of income from the health element (£390 a month) and higher conditionality requirements in LCW and intensive work search incentivises these individuals to seek employment.” 

Ken Butler DRUK’s Welfare Rights and Policy Adviser said: “The Government says that the WCA changes are to increase the number of Disabled people in employment. 

“However, the OBR’s conclusions as to the effects of WCA reforms are changes are shocking in its refutation of this. 

“Not only was the DWP consultation on them limited to 8 weeks, no Equality Impact Assessment of them was published. 

“Now it seems that not only does the Government intend to cut benefits from hundreds of thousands of Disabled people to save 1 billion. 

The net result will be that only a tiny fraction of those losing benefit will gain employment”   

The OBR report Economic and fiscal outlook: November 2023 is available from obr.uk 

See also our related news stories: