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Tuesday, December 16, 1997 Published at 12:05 GMT

UK: Politics

Disability benefits spending doubles

The Government has come under attack for proposing to reform the welfare system. Much of the criticism has focused on fears that one of the targets of the reform will be the seemingly ever-growing bill for disability benefits.

Spending on benefits for the long-term sick and disabled has doubled since the early 1990s. It is now an estimated £23.9bn for the current financial year, according to the Department of Social Security.

Since 1992-93, expenditure on these benefits has increased by around 14% a year in real terms. The number of people receiving disability benefits - now standing at around 3.7bn - has increased by an average of 9% over the same period.

Spending on some disability benefits has risen faster than on others. For example, expenditure on Disability Living Allowance has grown by around 19% each year in real terms since 1992-93.

There are a number of reasons for the increase in disability benefit spending:

  • Disability Living Allowance accounted for a large part of the increase in spending. It was introduced in 1992 to replace and extend Attendance Allowance and Mobility Allowance.

    The benefit was widely publicised which encouraged take-up, possibly from those who may have been entitled to benefit but had not previously claimed it.

  • Expenditure on Invalidity Benefit increased with the growth in unemployment in the 1980s. It has been suggested that some people were encouraged to claim invalidity benefit rather than unemployment.

    The Conservative government tried to tackle this problem in 1995 by replacing Invalidity Benefit with Incapacity Benefit in 1995. This tried to tighten the eligibility rules by introducing new tests. It has not reduced this area of spending, however, though it has halted the previous rise.

  • The ageing population has inevitably increased spending on disability benefits for the over 65s.

  • There has been a large increase in the number of people qualifying for Disability Premium, which is paid to those receiving Income Support. The total has doubled from 375,000 in 1991-92 to 786,000 in 1996-97.

    Eligibility for the Disability Premium is linked to entitlement to other disability benefits, so this increase is largely a reflection of an overall increase in disability claimants, as well as the increase in the overall number of people claiming Income Support.

    The above factors have led to a big rise in disability spending, but this surge is not likely to continue. The DSS expects it either to stabilise or even to decline.

    The types of disability benefit and the latest figures for them are:

    Disability Living Allowance

    In February 1997, there were 1,849,000 claimants. This was an increase of 161,000 since February 1996 and of 704,000 since February 1993. The Department of Social Security predicts that £4.95bn will be spent on DLA in 1997-98.

    DLA is a benefit for people who become disabled before the age of 65. It is payable to people who are disabled and need help with personal care or getting around.

    There are two components to DLA - a care component and a mobility component. To get DLA, claimants must have needed help for three months and be expected to need help for a further six months. Once they have been awarded DLA they get it as long as they continue to meet the conditions of entitlement.

    Incapacity Benefit

    This used to be called invalidity benefit. It was changed to Incapacity Benefit (with the introduction of tighter restrictions on who can receive it) in April 1995.

    The latest figures are for May 1997, when there were 2,373,000 claimants. The DSS predicts that £7.6bn will be spent on Incapacity Benefit in 1997-98.

    Incapacity Benefit is paid to people who are incapable of work. For the first 28 weeks, claimants are assessed as to whether they can perform their own occupation, after that time they are assessed on whether they can do any work at all.

    There are two short-term rates and one long-term rate (for people who have been sick for more than a year). Both the higher short-term rate and the long-term rate are currently treated as taxable income.

    Attendance Allowance

    In February 1997, there were 1,151,000 claimants. DSS expenditure plans predict £2.7bn will be spent on Attendance Allowance in 1997-98.

    Attendance Allowance is a benefit for people who are so severely disabled, physically or mentally, that they need a great deal of help with personal care or supervision.

    Disability Working Allowance

    There were 12,663 people claiming Disability Working Allowance in April 1997. This compares to 11,965 in January 1997 and 9,413 in April 1996.

    Disability Working Allowance is a benefit which tops up the earnings of disabled people who are in low paid work.

    Other disability benefits

    Other disability benefits include Mobility Allowance, Industrial Injuries Disablement Benefit, Severe Disablement Allowance and Invalid Care Allowance.

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