The Centre for Regional Economic and Social Research Centre at Sheffield Hallam University has completed research and a report into the the likely impact of current reforms to incapacity benefits.
In summary, the reports key points are:
- Major reforms to the incapacity benefits system are underway. These include a tougher medical test, the re-testing of existing claimants and the time-limiting of entitlement to non-means tested benefit. The impact of the reforms has so far barely been felt.
- The report estimates that by 2014 the reforms will cut incapacity claimant numbers by nearly one million, of which more than 800,000 will be existing incapacity claimants who will lose their entitlement. These figures are based on experience in the areas where the reforms have been piloted and on the DWP’s own assumptions about the impact of the reforms.
- The loss of entitlement is entirely the result of new benefit rules. It does not necessarily indicate that the health or disabilities that previously gave entitlement are anything other than genuine
- Nearly 600,000 incapacity claimants will be pushed out of the benefits system entirely, either because they will fall foul of the time-limit on non-means tested entitlement or because they fail to qualify for other means-tested benefits. The reform of incapacity benefits will push up the numbers on Jobseeker’s Allowance by approaching 300,000. Combined with the new requirement on many incapacity claimants to engage in ‘work-related activity’, the increase in compulsory labour market engagement will be around 900,000.
- The highly skewed distribution of incapacity claimants across the country means that the older industrial areas of the North, Scotland and Wales, in particular, will be most affected by the reforms. The reforms will impact barely at all on the most prosperous parts of southern England.
- Although some incapacity claimants will re-engage with the labour market, there is little reason to suppose that the big fall in claimant numbers will lead to significant increases in employment. Incapacity claimants often face multiple obstacles to working again and their concentration in the weakest local economies and most disadvantaged communities means they usually have little chance of finding work.