Changes to benefits system

Employment and Support Allowance - Working for a better lifeImportant changes were made to the benefits system in October 2008 which will have a major impact on claimants of incapacity benefits.

The aim is to simplify the system, and support claimants to return to work in line with the Government’s welfare to work policies and target of 80% employment rate.

Employment and Support Allowance is the new benefit that replaces Incapacity Benefit and Income Support (on incapacity grounds) for new customers from 27 October 2008.

There will be a new test called the Work Capability Assessment (PDF, 67KB), the aim of which is to assess what work people are capable of doing rather than what they are not capable of doing. Claimants will be placed into the following two groups:

1. Work related activity group

It is anticipated that 90% of claimants will be in this group and although they have ‘limited capability for work’, they are able to take part in a work related activity. Sanctions may be implemented if a claimant in this group does not engage in certain work related activities, such as work focused interviews.

2. Support group

10% of claimants with more severe health problems who have ‘limited capability for work’ and ‘limited capability for work related activity’ will be in this group.

They will not be expected to take part in work related activity, although the programme to support a return to work will be available to them, and they will not face any sanctions. The percentage of claimants in this group will increase over time as, proportionally, more people from the work related activity group move off the benefit and into work.

The new test to assess capability for work incorporates several changes from the previous test. It has been updated to include an assessment of more of the conditions that exist today and also to assess physical and mental abilities equally, whereas the previous test was weighted more towards physical disabilities.

This reflects the increase in the proportion of Incapacity Benefit claimants with mental and behavioural conditions over the last ten years—currently these account for 40% of Incapacity Benefit claimants in the West Midlands.

The aim is to migrate all claimants onto the new Employment and Support Allowance by 2013 and take a million people nationally off benefits and into work.

There are currently 239,000 people claiming incapacity benefits in the West Midlands region—7.3% of the working age population.

Over half of them have been claiming for more than five years, and 40% are claiming for mental and behavioural disorders.

Over the past decade, while numbers of jobseekers have declined, there has been a steady long-term increase in the number claiming incapacity benefits. There are more than twice as many claimants of incapacity benefits in the West Midlands as there are claimants of jobseekers allowance.

At the Observatory, we anticipate that the changes will have implications for data analysis, particularly when looking at time series. We work closely with Jobcentre Plus and will be looking to ensure any implications for analysis are communicated effectively to our partners in the West Midlands.

For further information on the changes see the Department for Work and Pensions.

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