A lack of job opportunities for disabled people is one major reason why public spending on disability benefits has undergone a four-fold increase in the past 18 years, according to a review commissioned by the Joseph Rowntree Foundation.
Spending on specialist disability benefits reached £22 billion in 1996-7. But a review of recent research concludes that the bill has risen because there are more disabled claimants rather than any improvement in the generosity of payments.
The increase in numbers claiming benefit because they are out of work has resulted from existing claimants remaining on benefit for longer periods, rather than growth in the rate of new claims.
Richard Berthoud of the University of Essex argues that this is likely to reflect the tendency for employers in a hirer's market to become more selective in their choice of staff, thereby excluding disabled people and other 'marginal' workers. But he also suggests that conventions about who is expected to work have changed in 20 years making it more acceptable for people to stay at home if their impairments make it very difficult for them to work.
Incapacity benefit Examining the decision by the previous Government to tighten assessment procedures for those claiming Incapacity Benefit, the report finds that the number of people starting a long-term spell on benefit fell substantially after the change took effect in 1995. The new medical test may, therefore, be achieving its objective of curbing expenditure.
Fewer existing claimants lost their entitlement than expected. However, few of those who were disallowed found jobs, raising a question over whether they were 'capable of work' as the new procedures implied.
Disability Living Allowance Disability Living Allowance, introduced in 1992, boosted an already steady increase in numbers claiming help with extra costs such as care and mobility. As with Incapacity Benefit, much of the growth in claims was among people whose disabilities were in the middle range of severity.
Research suggests that one in ten currently claiming the allowance may not be entitled to do so. On the other hand, as many as half all severely disabled people who could be claiming help with extra costs are not doing so. Underclaiming is at least as extensive as overclaiming.
Disability Working Allowance Disability Working Allowance (to be replaced with a tax credit next year) has had a much smaller impact than hoped in improving incentives for disabled people to accept low-paid jobs. The available evidence suggests that financial incentives make little difference to the prospects of people who cannot find jobs in the first place.
Richard Berthoud said: "The fact that the cost of disability benefits has risen so rapidly does not necessarily mean that they are over-generous and should be curtailed. Both Incapacity Benefit and Disability Living Allowance have gradually extended down the scale of severity over the years. But the evidence strongly suggests that the overwhelming majority of claimants continue to be severely disabled.
"There is good reason for the Government's review of social security to reconsider the existing range of benefits to see if their effectiveness can be improved. However, excessive zeal in excluding marginal claims might deprive people of benefit whose disabilities exclude them from employment - and impose significant extra costs."
