Disability, Welfare Reform, and Northern Ireland’s Inactivity Problem

Professor Duncan McVicar asks whether we are taking the right approach to welfare reform and whether changes to disability benefits in Northern Ireland will really help address an 'inactivity problem' in Northern Ireland.

There’s never been more than anecdotal evidence that there are significant numbers of people on disability benefits who are not genuinely eligible for those benefits. If anything the opposite is more likely to be the case: there are many people with disability who either do not claim or claim but do not receive disability benefits.  For example, of more than 400,000 completed appeals into Work Capability Assessment decisions in Britain to deny Employment and Support Allowance (ESA) to claimants on the basis that they are Fit to Work, more than one third (37%) have overturned the original decision. It’s also worth reminding ourselves that more than 40% of people aged 16-64 with a limiting long-term illness or disability in the UK are in work.

Yet there are aspects of the implementation of welfare reforms concerning people with disability – not just problems with Work Capability Assessments but also the bedroom tax and sanctions for Employment and Support Allowance recipients, for example – and a tone to some of the national debate surrounding welfare reforms, that appear punitive in nature, as if predicated on the belief that many people claiming disability-related benefits are somehow trying to cheat the system. Sometimes it seems as if the entirely reasonable suggestion that some people with disability who are currently in receipt of disability benefits could work if offered the right support is being used as cover for this (at best, arguable) view.

Remember that something like 16% of the working age population report a limiting long-standing illness or disability at any one time and anyone in the remaining 84% could be unlucky enough to experience disability onset at any time. Then think about how you would like your employer and the welfare system to respond if it was you or someone in your family.

Back to the laudable objective of designing a welfare system that helps and encourages people with disability remain in or move into sustained employment where this is appropriate for the individual concerned. Financial incentives are an important part of this. Would you choose to work if you were worse off doing so than claiming benefits to which you were genuinely entitled? But financial incentives are not just about cutting benefits but also about rewarding work and incentivising employers to retain workers experiencing disability onset so fewer claim disability benefits and become inactive in the first place. (International evidence suggests it’s easier to keep people experiencing disability onset in the labour market than it is to get people with disability who have become inactive back into the labour market). Another important part of such a welfare system is tailored support to help overcome disability-related barriers, again not just for the individual but also together with employers. Although the current welfare reform agenda combines many of these elements – for example Universal Credit recognises the need to make work pay by allowing claimants to retain some of their benefits when working – the emphasis seems to be more on cutting the value of benefit payments, setting tougher activity requirements, and more readily imposing sanctions – again there’s the punitive undercurrent – than on the part about offering support to individuals and employers to help overcome genuine barriers to sustained employment.

So what about welfare reform in Northern Ireland? The current impasse concerns whether we should follow other parts of the UK in adopting Universal Credit, the bedroom tax, replacing Disability Living Allowance with Personal Independence Payments, and in making various other changes, most of which lean in the direction of cutting payments or tightening eligibility conditions. This issue is not going to go away. Even if some parts of the reform package on the table change in the aftermath of the General Election, other parts will remain the same, and welfare reform will not stop there.

Politics and our current obsession with the government deficit aside, would adopting this set of welfare reforms have any significant impact on the Northern Ireland ‘inactivity problem’, or more importantly – our objective is surely not to just move people with disability from one type of benefit payment to another, e.g. from disability benefits to unemployment benefits – on the employment rate for people with disability? Unfortunately it’s too early to say: these reforms have not yet been fully evaluated even where they have been introduced. But preliminary related evidence is not particularly encouraging. For example at the end of 2012 only 84 out of over 15,000 ‘clients’ involved in the migration from Incapacity Benefit to ESA had successfully moved into work and ceased claiming either Jobseekers Allowance or ESA. Fortunately the Northern Ireland Executive is not putting all their inactivity eggs in the welfare reform basket, and seems to recognise the merit of offering employment-related support to people with disability on a voluntary not compulsory basis.