Disabled claimants may not meet costs with cut in unemployment benefit, warn MPs

Government plans to cut unemployment benefit for new disabled claimants could leave some unable to meet essential living costs, MPs have warned.

The Commons Work and Pensions Committee said the evidence that reducing Employment and Support Allowance (ESA) would provide an incentive for disabled to find work was “ambiguous at best”.

While the Government’s aim to halve the “disability employment gap” – the difference between the employment rates of the disabled and non-disabled – was laudable, it said ministers had failed to commit to a timeline for achieving it.

Under Government plans, from April new ESA claimants adjudged to be capable of work in the future will receive £73.10 per week – the same as the Jobseeker’s Allowance (JSA) – a reduction of £29.05 on the current rate. However, the committee said the measure – intended to save a total of £1 billion by 2020-21 – could leave some with lower disposable incomes than JSA claimants as they often faced unavoidably higher living costs.

It was imperative, the committee said, that the Department for Work and Pensions provided additional financial support for those claimants in the so-called work-related activity group (WRAG) who found they were unable to cover their essential living costs due to their condition.

“The Government expects the new, lower rate for the ESA-WRAG to enhance incentives to work. The evidence is, at best, ambiguous,” it said. “We heard substantial concerns about the possible impact of the new rate on disabled people’s capacity to look for and move into work.”

The report also noted, that at current employment levels, halving the “disability employment gap” would require an extra 1.2 million to 1.5 million disabled people to find work.

However, it cited one estimate by the Learning and Work Institute that on current rates of progress, it would take over 200 years to achieve.

Committee chairman Frank Field said: “We expect the Government to respond to this report before the proposed new lower rate of ESA is due in April.

“If they intend to proceed with these cuts, we expect an explanation of how this will not be detrimental to its target of halving the disability employment gap, by making finding and keeping a job even more difficult for disabled people than it already is.”

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