Rise in financial hardship key driver of increase in disability benefit claims

A rise in financial hardship across the country has been a key driver of the increase in disability benefits, analysis by the New Economics Foundation (NEF) has found, casting serious doubts on the government’s justification for cutting payments.

The government’s recent proposal to cut disability benefits set out how the rise in people claiming was double the rise in the number of disabled people, suggesting support was going to people it wasn’t intended for.

However, latest NEF research shows that only 46% of disabled people claim personal independence payment (PIP), compared to 40% pre-pandemic. This means the rise in claims could simply be down to a rise in people applying for the benefits to which they were already entitled.

Meanwhile, researchers found that the rate of successful PIP claims has remained steady since the pandemic, at around 50%, suggesting the benefit is going to the ​“right” people, even with more people applying.

The analysis, published ahead of a debate in parliament today on PIP reforms, also found that knowing the rate of deprivation in a region and the number of disabled people living there allowed researchers to predict the rate of PIP payments with 94% accuracy.

This suggests that the rise in disability benefits has been down to these two main factors: a rise in the number of disabled people eligible for state support and a rise in deprivation, which has forced those previously not claiming support to look for additional financial help from the government.

Senior economist Max Mosley said:

“Our analysis suggests that PIP is going to exactly the sort of people it is intended to support, but that higher rates of disability and financial hardship are driving more people to claim.

“The government’s plans to restrict access to PIP will lead to hundreds of thousands of disabled people missing out on support they very much need.

“This could well prove to be as politically toxic for the government as cutting the winter fuel payment.”

ENDS

Contact

James Rush – james.rush@neweconomics.org

Notes

The New Economics Foundation is a charitable think tank. We are independent of political parties and committed to being transparent about how we are funded.

The full analysis is available to read on the NEF website

The government’s recent green paper on cutting disability benefits sets out how the number of disabled working-age people in England and Wales has risen by 17% since the pandemic, but the number of people receiving incapacity or disability benefits has increased by double this rate – 34%. The paper states that ​“the rate of increases in claims and expenditure is not sustainable, outstripping growth in disability prevalence.”

Figure 1 estimated using the Labour Force Survey (LFS) and the Interim Evidence Pack (published as part of Pathways to Work documents): we take the estimates of total disabled people from the LFS (using the Equality Act definition) and compare it to the total number of people claiming PIP/​DLA or incapacity benefit

We estimate how much of the regional variation can be explained using disability prevalence (using the same LFS data and definitions as above in Figure 1) and a score for relative regional depravation using the Index of Multiple Depravation (IMD). We then estimate how much regional variation in PIP claims is explained by disability prevalence. We then add the IMD score as a second variable.