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Disability Benefits

Volume 165: debated on Friday 19 January 1990

The text on this page has been created from Hansard archive content, it may contain typographical errors.

To ask the Secretary of State for Social Security whether, in the last six months, his Department has issued revised guidelines to doctors assessing fitness for work of people in receipt of disability-related benefits.

To ask the Secretary of State for Social Security how many pensioners will receive an increase in their income as a result of the proposals he announced in his statement on benefits for the disabled on 10 January; and what is the estimated cost (a) gross, (b) net of benefits, (c) net of tax if appropriate and (d) net of benefit and tax if appropriate in each financial year 1990–91 to 1998–99.

[holding answer 15 January 1990]: It is estimated that about 40,000 pensioners annually will benefit from the extension of attendance allowance to terminally ill people without any waiting period. By 2000–1, it is expected that a further 80,000 pensioners will benefit from the removal of the upper age limit for payment of help with mobility needs. It is also expected that by 2000–1, some 50,000 pensioners will be in receipt of one of the proposed new lower rates of the disability allowance (having claimed before reaching age 65).

Effects on expenditure
Gross (cost) £ million
(a) Cash
1990–919
1991–9219
1992–9320

Gross (cost) £ million

1993–9421

1989–90 prices

2000–1145

(b), (c) and (d). There are no offsetting changes to other benefits from these proposals, and the benefit gains are not taxable.

To ask the Secretary of State for Social Security if, pursuant to his statement on benefits for the disabled of 10 January, he will publish in the Official Report his estimate of the cost of the new disablement employment credit (a) gross, (b) net of benefit savings, (c) net of tax if appropriate and (d) net of benefit and tax if appropriate in each financial year 1992–93 to 1998–99 giving his estimate of the numbers who will be eligible and the expected take-up rate.

[holding answer 15 January 1990]:(a),(b) The net effect on expenditure of the disability employment credit is difficult to predict and will depend on whether recipients of the proposed benefit were previously receiving out-of-work benefits. Our initial, tentative, estimate is that gross expenditure on the disability employment credit might be about £80 million a year. Consequential benefit savings—through non-payment of full incapacity benefits—are estimated to be about £90 million a year.

£ million cash
£ million 1989–90 prices
Net change in expenditure ( + = cost, - = saving)1990–911991–921992–931993–942000–01
Increase in adult's disability premium in Income Support and Housing Benefit+ 18+ 19+ 19+ 19+ 25
Introduction of £10 carers premium in Income Support and Housing Benefit+ 6+ 15+ 15+ 15+ 20
Increase in disabled childs premium in Income Support and Housing Benefit+ 8+ 8+ 8+ 8+ 10
Extension of Attendance Allowance to disabled babies+ 5+ 6+ 6+ 6+ 5
Extension of Attendance Allowance to terminally ill people without a waiting period+ 13+ 28+ 29+ 30+ 25
Increase in top rate of Invalidity Allowance to £10+ 1+ 1+ 1+ 1+ 1
Extension of Mobility Allowance to people who are deaf and blind+ 4+ 51
Additional funds for the Independent Living Fund2+ 19+ 26+ 27+ 28
Introduce Disability Allowance+115+230+280
Abolish upper age limit for payment of help with mobility needs+100
Introduce age-related addition in Severe Disablement Allowance+ 15+ 50+ 50+ 55+ 50
Introduce Disability Employment Credit3- 10- 10-10
End entitlement to Reduced Earnings Allowance in new rates-1-17- 41- 61-130
End accruals of new rights to Invalidity Benefit Additional Pension0- 5- 25-370
TOTALS4+ 88+141+214+296+ 6
1 Additional expenditure on mobility allowance for the deaf-blind is included in the Disability Allowance totals after 1992–93.
2 Subject to decisions about the future of the Independent Living fund.
3 The net effect on expenditure of the Disability Employment Credit is difficult to predict and will depend on whether recipients of the proposed benefit were previously receiving out-of-work benefits.
4 Totals revised upwards since the Autumn Statement to reflect a small downwards adjustment of estimated savings from the change in the Reduced Earnings Allowance. Totals may not equal sum of components because of rounding.

(c), (d) The disability employment credit itself will not be taxable, although any associated earnings will be subject to income tax and national insurance contributions in the normal way.

Eligibility for the proposed disability employment credit will depend not only on prior or current receipt of qualifying benefits but also on level of potential earnings and availability of suitable jobs. Existing data do not provide sufficient information about these factors to enable us to produce reliable estimates of the number who will be eligible or of take-up rates. Our tentative estimates suggest some 50,000 people could receive the new benefit.

To ask the Secretary of State for Social Security if, pursuant to his statement on benefits for the disabled on 10 January, he will publish in the Official Report a breakdown of the additional net cost of his proposals broken down by measure for each financial year 1990–91 to 1998–99;

To ask the Secretary of State for Social Security what is his estimate of the net cost or savings of the totality of the proposals contained in "The Way Ahead" in each of the financial years from 1990–91 to 2000–01; and if he will make a statement.

[holding answer 15 January 1990]: It is not possible to provide reliable estimates of the cost of each measure for every year, particularly in the longer term, since the costs depend on a large number of factors which cannot be accurately forecast. The table therefore gives estimates for the first four financial years, together with an indication of the likely effects of 2000–01. The figures for 2000–01 are subject to considerable margins of uncertainty.

To ask the Secretary of State for Social Security if, pursuant to his statement on benefits for the disabled on 10 January, if he will publish in the Official Report his estimate of (a) the number of people who will be eligible for each level of the care component and the mobility component of the new disability allowance, (b) the number of people who would have been eligible for attendance allowance and mobility allowance but will get the lower rate of the care and the mobility component and (c) the cost (i) gross, (ii) net of benefit, (iii) net of tax if appropriate and (iv) net of benefit and tax if appropriate of the disability allowance in each financial year 1992–93 to 1998–99.e app

[holding answer 15 January 1990]:(a) Current projections of the likely number of recipients of the proposed disability allowance by 1993–94 are:

Self-carecomponentNumber of recipients
Higher rate150,000
Middle rate250,000
Lower rate140,000
Mobility component
Higher rate700,000
Lower rate150,000
Attendance allowance will remain to provide help with care needs for an estimated 600,000 people aged over 65.

(b) People will qualify for the upper level of the mobility component and the two upper levels of the care component on the basis of assessment criteria similar to those currently employed for mobility allowance and attendance allowance respectively.

(c) (i) and (ii). Details of the cost of introducing the disability allowance are set out in the table:

£ million

Expenditure on disability allowance

Expenditure on other 1 benefits

Total

Cash

1992–93+75+40+115
1993–94+160+70+230

1989–90 prices

2000–01

2+300

+80+380

1 Income support and housing benefit.

2 Includes £100 million additional expenditure on help withmobility needs due to abolition of upper age limit for payments.

(c) (iii) and (iv). Adjustments net of benefit and tax are not appropriate: the disability allowance will not be taxable.

To ask the Secretary of State for Social Security, pursuant to his statement on benefits for the disabled on 10 January, if he will publish in the Official Report(a) his estimates of the cost of the age-related addition to the severe disablement allowance (i) gross, (ii) net of benefit savings, (iii) net of tax savings if appropriate and (iv) net of benefit and tax savings if appropriate for each financial year 1990–91 to 1998–99,(b) his estimate of the number of people who will be eligible for the new addition and the expected take-up rate,(c) the number and percentage of invalidity allowance and invalidity pension claims which will be replaced by the new addition and (d) his estimate of the additional number of people who will gain benefit because of the new addition and those who will lose it.

[holding answer 15 January 1990]:(a) It is not possible to provide reliable estimates of the costs of this measure for every year, particularly in the longer term, since the costs depend on a number of factors such as the future claims load which cannot be accurately forecast. The table therefore gives estimates for the first four years after implementation, together with an indication of the effect in 2000–01. Figures for 2000–01 are subject to considerable margins of uncertainty.

Effects on expenditure
£ million (cost)
(i) Gross(ii) Net of other benefit changes1
Cash
1990–913515
1991–9211850
1992–9311550
1993–9412055
1989–90 Prices
2000–0111050
1 Income-related benefits.
(iii) and (iv): Severe disablement allowance and the proposed age-related addition are not taxable.

(b) It is estimated that about 250,000 people will be eligible for the addition. All of these will receive the addition automatically with their existing severe disablement allowance payments.

(c) Invalidity allowance and invalidity pension claims are not affected by this proposal.

(d) Some 250,000 recipients of the severe disablement allowance will receive the addition. None will lose benefit. The number of severe disablement allowance recipients who will be better off in net terms is about 120,000.

To ask the Secretary of State for Social Security, pursuant to his statement on benefits for the disabled on 10 January, if he will publish in the Official Report his estimate of the savings incurred in each financial year 1990–91 to 1998–99 as a result of ending new entitlement to the invalidity pension additional pension (a) gross, (b) net of benefits, (c) net of tax if appropriate and (d) net of benefits and tax if appropriate; what is his estimate of the number of people who will get (i) a reduced additional pension and (ii) no additional pension in each of the years; and if there will be a reduction in national insurance contributions as a result of this measure.

[holding answer 15 January 1990]: It is not possible to provide reliable estimates of savings from this measure for every year, particularly in the longer term, since the level of savings depends crucially on a number of factors such as the future claims load and earnings growth which cannot be accurately forecast. The table therefore gives estimates for the first three years after implementation, together with an indication of the effect by 2000–1. The figures for 2000–1 are subject to considerable margins of uncertainty.

Effects on expenditure

£ million (saving)

(a) Gross

(b) Net of other benefit changes1

Cash

1990–91
1991–92

2Nil

Nil
1992–93105
1993–943025

1989–90 prices

2000–01475370

1 Includes consequential adjustments to invalidity allowance payments and income-related benefits.

2 Ending the accrual of new rights to invalidity benefit additions pension from 1991–92 does not affect payments of additional pension until the following financial year.

(c), (d). Invalidity benefit additional pension is not taxable.

Numbers affected

The table gives details of the average number of recipients in eachyear who will receive:

(i)A reduced additional pension1

(ii)No additional pension1

1990–91
1991–92NilNil
1992–9395,000Negligible
1993–94265,000Negligible
2000–01870,00035,000

1 This table simply shows the numbers with reduced additional pension (AP) entitlements. For many there will be consequential adjustments to invalidity allowance or income-related benefits which will offset Dart or all of the reduction in AP entitlement.

The effect on national insurance fund expenditure will be taken into account in determining future levels of contributions.

To ask the Secretary of State for Social Security, pursuant to his statement on benefits for the disabled on 10 January, if he will publish in the Official Report his estimate of the savings incurred in each financial year 1990–91 to 1990–99 as a result of ending new entitlement to the industrial injuries reduced earnings allowance (a) gross, (b) net of benefits, (c) net of tax if appropriate and (d) net of benefits and tax if appropriate.

[holding answer 15 January 1990]: It is not possible to provide reliable estimates of the savings from this measure in every year, particularly in the longer term, since the savings depend on a number of factors, including the future claims load, which cannot be accurately forecast. The table therefore gives estimates for the first four financial years, together with an indication of the likely effect by 2000–1. The figures for 2000–1 are subject to considerable margins of uncertainty.

Effects on expenditure
£ million (saving)
(a)Gross(b)Net of other benefit changes1
Cash
1990–9111
1991–921817

(a)Gross

(b)Net of other benefit changes1

1992–934341
1993–946461

1989–90 Prices

2000–01140130

1 Income-related benefits.

(c), (d) Reduced earnings allowance is not taxable.