My guess, for what it’s worth, is that this policy has never been properly thought through.

Earlier this year the LibDem annual conference suported a motion on the government’s welfare reform bill which challenged one of its most controversial aspects, the limiting of contributory Employment Support Allowance (ESA) to one year for people assessed as capable of some ‘work-related activity’ The aim of the motion was to ensure that those disabled people who had paid national insurance would not be forced on to means-tested benefits after an arbitrary period.

But there is another measure in the bill which will also exclude large numbers of people from non-means tested entitlement which has attracted far less attention, and which is arguably no less arbitrary than the proposal which LibDem conference challenged. It is contained in clause 52 of the bill, which as drafted will prevent hundreds of thousands of young people with congenital or early-onset disabilities from accessing contributory ESA when they reach working age, whether or not they are deemed capable of any ‘work-related activity’. People who have been disabled since childhood will no longer be entitled to benefit in their own right as adults but will be subject to means testing based on the income of their family.

The provision that clause 52 abolishes allowed people under 20 with work-limiting conditions to be treated as if they met the national insurance contributions for ESA. The rationale is obvious: people with conditions that begin in childhood may never be able to accumulate sufficient contributions to entitle them to the non-means tested benefit, and even for a system which has its fair share of anomalies, this was clearly an arbitrary exclusion. While hardly perfect, this arrangement prevented a situation where people with lifetime or early-onset conditions would generally have less favourable entitlements than people who became disabled in adulthood.

We can get a rough idea of the numbers who will affected by clause 52 and the conditions they are living with from figures on children receiving Disability Living Allowance, the non-means tested benefit which compensates for the additional costs faced by disabled people (but which does not, it is worth stressing, provide support for everyday living costs, which are met through ESA or its predecessor Incapacity Benefit). Not all DLA recipients receive ESA/IB, but 75% of those aged 25 to 34 do, and this gives an indication of how many of the children currently receiving DLA will be affected by clause 52 when they reach adulthood.

There are an estimated 327,000 children under 16 currently receiving DLA. As the chart shows, by far the most important disabling condition is learning disability (41%), followed by mental health (10%), disabetes melitus (5%), deafness (3.1), skin diseases (2.5) and epilepsy (2.4). (Note that the disabling condition does not in itself lead to DLA entitlement, which is based on the specific mobility and care needs of the individual: not all children with, for example, mental health problems are on DLA, only those, generally more severely affected, whose condition leads to specific needs.)

While not all of these children will be eligible for ESA in adulthood, and while there will be many who are eligible for ESA who are not receiving DLA, these figures do point to one important implication of clause 52: a large proportion of those affected will have learning difficulties or mental health problems at the more severe end of the spectrum. There are currently 134,000 children with learning difficulties on DLA, and these conditions are one of the major sources of growth in working age disability benefit receipt. The chart here shows working age DLA caseload change, in both raw numbers and adjusted to take out the effect of demographic change: for most disabling conditions, with the exception of learning difficulties and mental health, there has been virtually no change. This may explain why a policy which will particularly affect entitlement for people with learning difficulties looks attractive from a narrow fiscal perspective.

That said, the question posed by clause 52 is why would anyone want to do this? Of course the proposal will save money: the savings could well be significant, precisely because financial support is being withdrawn from people many of whom will never be able to support themselves. At the same time there are likely to be offsetting effects: the impacts on work incentives for partners are likely to cut in to any fiscal savings (how many partners would be as well off leaving work and claiming carer’s allowance after this change?). But even without this offsetting factor, and even if one completely accepted the government’s arguments for aggressive deficit reduction, there are better and worse ways of reducing public expenditure, and introducing arbitrary differences in entitlement based solely on when someone became disabled is surely at the worse end of the range.If they marry or move in with a partner, they will be bringing a huge negative dowry of long-term financial need to the relationship. Why would we want to impose a tax on people who provide non-financial forms of care and support, or on legacies that parrents have saved for in order to provide for their children in adulthood? Why would we want people who have been severely disabled since childhood to have to factor in the financial costs they might impose on others into crucial decisions about where to live and who to live with?

I don’t believe that anyone of any political persuasion seriously believes these effects are desirable. For thirty years there has been a clear direction of policy on severe long-term disability, accepted and promoted by all the main parties: towards greater independence and community support, away from segregation, institutionalisation and constrained dependency on others. Nobody believes this process of change is complete, but until now it seemed clear that everyone was on the same road. Of course there will always be a need for debate about ways and means but unconditional financial support in one’s own right is one of the more uncontroversial building blocks of any strategy for greater autonomy and integration for the most severely disabled. Clause 52 thus represents a major departure from decades of progressive policy making by successive UK governments.

My guess, for what it’s worth, is that this policy has never been properly thought through. It bears all the marks of the sort of quick and dirty proposal for cutting expenditure that every permanent secretary in Whitehall keeps in their back pocket to offer up if necessary in negotiations with Treasury: a price to be paid in the hope of getting the go-ahead for more important and expensive priorities (such as the massive administrative costs of Universal Credit to take a random example). This sort of thing goes on all the time, and many of the coalition’s supposedly ‘radical’ proposals for welfare reform have been dug out of ancient inherited files that civil servants have scarcely bothered to blow the dust off. With civil servants under an imperative to put every possible expenditure cut on the table, this proposal was able to slip through when under less pressurised circumstances it wouldn’t have stood a chance.

As it stands, the effect of clause 52 is that even those young people who are deemed unlikely ever to be able to work (the ‘support group’ in ESA) will never be entitled to non-means tested support in adulthood. The level of support will depend not just on the severity of people’s conditions but on when those conditions began. Those with lifetime and early-onset conditions will be disadvantaged compared to those who become disabled later in life and who have built up enough contributions to receive non-means tested support if they are in the support group.

Those who are concerned with arbitrary restrictions on contributory ESA have every reason to extend their concerns to clause 52.


Extract from Explanatory Notes to Welfare Reform Bill 2011
Clause 52: Condition relating to youth
270. Clause 52 abolishes the youth condition in contributory ESA. This condition allows claimants to qualify for contributory ESA without meeting the usual paid National Insurance contribution conditions. The youth condition is set out in full in paragraph 4 of Schedule 1 of WRA 2007. This requires that a claimant is under 20 (or in prescribed cases, up to 25), not in full time education and that the claimant has had limited capability for work for 196 consecutive days.
271. Subsection (3) provides that no new claims to ESA may be made on the grounds of youth. Those who would have otherwise applied on these grounds will instead be required to meet the usual National Insurance contribution conditions for a claim to contributory benefit as set out in conditions in Part 1 of Schedule 1 of WRA 2007, or the means test should they apply for income-related ESA.