Hundreds of thousands of households across the UK will be affected by changes to welfare benefits from April 2013 - part of government plans for the biggest shake-up of the welfare system for decades. Ministers argue the changes are necessary to tackle the rising cost to the taxpayer and in order to cut the budget deficit. They also say it will simplify the system and provide greater incentives for people to work. In 2011-12, Disability Living Allowance (DLA), Employment Support Allowance, Income Support, Working Tax Credits and Housing Benefit amounted to over £50bn of the welfare bill total of £160 bn. For the purposes of this blog, we will look at the changes to these benefits as well as the potential for return to work rates following injury to increase, which will impact multiple stakeholders.
The government has progressed with plans to replace DLA with Personal Independence Payment (PIP) for new claimants between the ages of 16 to 64. Initially, changes started in the North East of England and in June 2013, PIP was rolled out to the rest of the UK. Existing DLA claimants will gradually change to PIP by 2018.
What’s in a name?
PIP is committed to supporting people affected by disability and/or ill health to lead independent and active lives. The assessment will focus on the affects of the condition on the person’s life rather than the diagnosis given to them. The PIP assessment will be performed by an independent health professional and following this, the claimant will be expected to attend regular reviews. This recognises that an individual needs may fluctuate and therefore their benefit may need to change in line with this.
The outcome is…
Similarly to DLA, PIP is made of two components – a living component which will measure how a claimant can manage their daily activities, and a mobility component which will measure how the claimant can perform a list of physical activities. The results of the assessment are no different financially to DLA and will mean that a claimant will be awarded between £21 to £134.40 per week to assist with extra costs caused by their condition.
Universal Credit (UC) represents a Universal Change to employment related benefits
UC commenced in parts of Greater Manchester in April 2013 and will gradually roll out across the UK to replace Jobseekers Allowance, Employment Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Housing Benefit.
UC will be paid once a month in a single payment direct into the claimant’s bank. Once the claimant returns to work, the amount of UC will reduce gradually depending on the hours worked and the income received.
What are the implications of these changes on rehabilitation in the UK Insurance industry?
The motivation behind the welfare reform is to facilitate people back to work and move them off welfare benefits. The hope is that return to work rates following compensable injury will be increased. There has been a great amount of research over the years to demonstrate the holistic benefits to an individual of working versus not working and it is hoped that these benefits will spread across society.
For rehabilitation case managers, never has it been more essential to work with statutory bodies, including the Department of Work and Pensions, to ensure that all rehabilitation provided remains goal driven and outcome focused, with the ultimate aim of returning injured parties back to the work place as quickly as possible. We await with interest as to how this develops.