Rising charges of incapacity colliding with higher monetary hardship are pushing extra individuals to hunt assist
A part of the federal government’s justification for its cuts to incapacity and incapacity advantages is that the variety of disabled working-age individuals in England and Wales has risen by 17% because the pandemic, however the variety of individuals receiving incapacity[i] or incapacity advantages[ii] has elevated by double this fee – 34%. The implication appears to be that these advantages are going to folks that they weren’t meant to assist.
Whereas this sounds, on paper, like a regarding pattern, in actuality it could merely point out that professional demand for these advantages shouldn’t be solely decided by whether or not extra individuals are disabled.
First, allow us to think about why the variety of disabled working-age individuals could have risen by 17%. We all know that the pandemic had large knock-on penalties for well being and well being inequalities. This has been compounded by a cost-of-living disaster that has additionally had profound impacts on our well being. Psychological well being has been notably affected, with 36% extra individuals in touch with psychological well being companies in 2024 than in 2019. That is mirrored in a steep rise in claims for incapacity advantages the place psychological well being issues are cited as somebody’s ‘main situation’.
Nonetheless, this authorities argues that the variety of individuals receiving incapacity and incapacity advantages has grown twice as quick as the speed of progress in disabilities. It could appear intuitive {that a} rise in claims for these advantages could be pushed primarily by an increase within the variety of disabled individuals, however in actuality many disabled individuals don’t declare related monetary assist. This may very well be as a result of they don’t seem to be conscious of what’s accessible, they’re delay by the often-strenuous means of proving eligibility, or they don’t really feel they want extra assist.
The rise in incapacity and incapacity profit claims is due to this fact depending on traits in each incapacity and the proportion of disabled people who find themselves eligible for and apply for assist. By evaluating the whole variety of disabled individuals – outlined utilizing the Equality Act – to the quantity claiming incapacity and/or incapacity advantages, we are able to see that the proportion of disabled individuals claiming these advantages stood at round 40% earlier than the pandemic however has since grown to 46%.
Whereas the federal government argues that the rise in charges of incapacity is out of step with the rise in these claiming incapacity and incapacity advantages, this might merely be all the way down to higher professional take-up fee throughout the disabled inhabitants, fairly than elevated claims from individuals for whom the profit was not meant.
The principle change that the federal government is proposing in response is to tighten eligibility for the private independence cost (PIP), resulting in 800,000 fewer individuals receiving the profit by 2029 – 30. PIP is the profit for which there was the largest post-pandemic enhance in claims – 28% of disabled individuals acquired the profit in 2019, rising to 33% in 2023. As a result of it’s non-means examined and never based mostly on working standing, it additionally permits us to discover a wider vary of mediating components which may clarify why claims have elevated.
The very first thing to think about is whether or not the evaluation success fee has modified for individuals making use of for PIP. A falling success fee would counsel extra individuals are making use of who the profit was not meant for or that the evaluation is getting more durable to go. A rising success fee would counsel the evaluation is getting simpler to go or that extra individuals are making use of with disabilities which have a higher influence on their lives.
Nonetheless, we discover a pretty static success fee, suggesting that the profit is constant to go to the individuals it was meant to assist although extra individuals are making use of. This implies that not all disabled individuals who could also be eligible for PIP are claiming, which in flip means that different components are mediating whether or not individuals apply past simply the severity and influence of their disabilities.
One other technique to perceive these traits is to take a look at how ranges of PIP claims fluctuate throughout the nation. By doing this, we are able to look at how a lot this distribution is accounted for by incapacity prevalence and – crucially – what else would possibly assist to clarify any variation. We discover that the geographical unfold of the areas which have the very best variety of disabled individuals (on the left of determine 3) is similar to the areas of the nation which have probably the most quantity of individuals claiming PIP (on the correct).
Determine 3: The areas of the nation with the very best incapacity prevalence have the very best PIP claims
Variety of disabled individuals and PIP caseload by native authority
Notes: Figures taken from December 2024 for incapacity prevalence and January 2025 for PIP caseload
Supply: NEF Evaluation of the Labour Drive Survey (LFS) Private Independence Fee: Circumstances with Entitlement from 2019 (DWP)
We will see this additional by putting all of the areas on the x axis of determine 4 based mostly on how many individuals declare PIP, and the variety of disabled individuals in that area on the y axis. This exhibits that there’s a robust correlation between these two variables, that means that, as you’d count on, areas with excessive numbers of disabled individuals additionally see excessive numbers of PIP claims.
Whereas this correlation is powerful, there may be nonetheless some unexplained variation, comparable to Buckinghamshire which has a excessive proportion of incapacity prevalence however a decrease variety of individuals claiming PIP than we’d count on. However as Buckinghamshire is a extra prosperous area, it’s doable that fewer disabled individuals within the area really feel the necessity to declare incapacity advantages.
We will prolong this evaluation with a collection of regressions to check if regional social and financial drawback performs a task in explaining regional PIP caseload at a specific cut-off date. By itself, the variety of disabled individuals explains 71% of the PIP caseload in a specific area. However after we add every area’s relative deprivation utilizing the Index of A number of Deprivation (IMD) we are able to clarify 94% of the regional PIP caseload.
We all know that disabled individuals have struggled particularly in the course of the cost-of-living disaster. 12% of disabled individuals report not to have the ability to pay their payments up to now 12 months, in comparison with 5% of non-disabled individuals. The proportion of disabled individuals who can’t reliably afford sufficient wholesome meals rose from 11% in 2021 – 22 to 16% in 2023 – 24. For non-disabled individuals, these figures rose from 3% to six%.
Relatively than indicating that PIP is being awarded to individuals much less in want or deserving of the assist than up to now, our evaluation means that the rise in claims is symptomatic of rising charges of incapacity mixed with worsening hardship. An increase in incapacity makes extra individuals eligible for PIP, whereas worsening hardship signifies that extra individuals who have been beforehand eligible for PIP, however didn’t apply for it, now really feel the necessity to apply for added monetary assist.
On this foundation, it appears unlikely that the proposed tightening of eligibility for PIP as the federal government is planning will obtain a lot aside from inflicting additional hardship for a bunch struggling probably the most because the pandemic. It’s additionally seemingly that the associated fee financial savings from this usually are not as excessive as assumed, because it’s typically the case that profit cuts and/or tightened eligibility end in individuals transitioning from one advantages system to a different one (eg, council tax aid) as they seek for various monetary assist.
As an alternative, the federal government must develop a plan for addressing the underlying components which can be main extra individuals to develop into disabled or expertise ill-health, in addition to an financial technique to scale back the variety of individuals expertise monetary insecurity.
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