Taking incapacity benefit was once seen as a better option than claiming unemployment benefit. It was suggested in some quarters that governments indirectly encouraged claimants to draw invalidity benefit (as it was then) rather than add to the unemployment numbers. However, the law of unintended consequences soon took over and the number of claimants rose from around a million in the mid-1980s to more than 2.5 million by the turn of the century.
The huge outlay involved prompted governments of all hues to introduce reforms to reduce the cost to the Exchequer. The latest of these initiatives was the introduction of Employment Support Allowance (ESA) in October 2008 as a replacement of Incapacity Benefit (IB). Initially IB remained for existing claimants, but by 2014 they should have all been moved over to the ESA regime.
ESA has a distinctly different focus from IB. A key feature of ESA is the Work Capability Assessment (WCA), which is carried out during the first 13 weeks of the claim. During that period your basic benefit payment is £67.50 a week (for a single person aged 25 or over), the same rate as Jobseeker’s Allowance. As the name suggests, the WCA is a measure of what work you can do. Under IB, the assessment was more a gauge of your disability than your
ability. Once the WCA is over, you are allocated to one of three groups:
- ‘Fit for work’, with no further ESA entitlement.
- ‘Work Related Activity Group’, with a basic benefit of £94.25 a week. To maintain your entitlement to the full level of benefit you must comply with ESA work-related conditions. For example, you could be required to attend regular work-focused interviews with a personal adviser. From April 2012 this benefit is likely to be paid for a maximum of 12 months in many instances.
- ‘Support Group’, with a basic benefit of £99.85 a week. This category only applies if you are considered to have ‘a limited capability for work-related activity’. Claimants qualifying for this higher level of benefit do not have to undertake any work-related activities.
Statistics recently released by the DWP show that the assessment process has markedly limited the chance of a successful benefit claim. For the period covering claims since the start of ESA to the end of November 2010, initial assessments produced the following results:
- 39% of claimants were deemed to be ‘fit for work’.
- 17% of claimants were placed in the ‘Work Related Activity Group’.
- 7% of claimants were placed in the ‘Support Group’.
- 36% of claims were closed before the assessment was completed.
- 1% of claims are still in assessment.
These statistics – and the lowly benefit levels of successful claims – are a stark reminder of the importance of having adequate income protection. The best income protection plans pay out if you are unable to follow your ‘own occupation’. This is a much lower threshold than applies for the WCA, which basically only allows the highest ‘Support Group’ payment if you are unable to follow any occupation.
If you do not have income protection, or your current cover needs review, you owe it to yourself and your family to take action now.