As commentators continue to try and make sense of Wednesday’s Emergency Budget, what did we learn about the implications of the Chancellor’s statement for disabled people?
Meeting the extra costs of disability – DLA/PIP and tax credits
Despite setting out details of how he planned to find £12bn of savings in the welfare budget, on Wednesday the Chancellor confirmed that disability benefits – including DLA and PIP – will continue to be protected from taxation or means-testing. This directly recognises one of Scope’s priority policy recommendations.
It’s hugely significant that, in this most-political of Budgets, the Government has set out its stall in protecting the value of these payments.
It’s also worth noting that despite the extensive coverage of the Government’s plans to reduce tax credits for certain groups, disabled people have been relatively well-protected in comparison. Many disabled employees earning lower annual salaries and who are managing health conditions alongside part-time work use tax credits to supplement their income.
Work allowances for disabled people are being maintained and the rate at which disability-specific tax credits are set has been protected relative to other groups. However, it’s important to note that disability tax credits will still be subject to steeper tapering alongside other types of credit.
This serves to underline the importance of supporting flexible working for disabled people – both in helping to manage work alongside health conditions and ultimately as a way of maintaining disabled people’s engagement with the labour market.
As such, the move to keep DLA and PIP outside of taxable income is more important and welcome than ever; if extra costs payments had been taxed, this would have resulted in a 40% drop in the annual income for a disabled person on the higher rate of PIP at the minimum wage.
And whilst many of the changes will still have significant implications for disabled workers, there is at least a real recognition that there is something exceptional about support for disabled workers – and that protecting this support is important.
Whilst there was no further mention in the Budget statement itself, the publication of the Welfare Reform and Work Bill on Thursday moved the Government further towards its ambition of delivering full employment. Halving the disability employment gap will be a key stepping stone in achieving this.
It’s therefore disappointing that the Government plans to reduce the value of Employment Support Allowance (ESA) for those in the Work Related Activity Group (WRAG) from April 2017 onwards.
ESA has a vital role to play in supporting disabled people make their way into employment. Reducing its value will only make life harder for disabled people who face additional challenges to get back into work.
Disabled people are pushing hard to find jobs and to get on at work, but they continue to face huge barriers. Unlike the other back-to-work programmes that are currently available, the support that disabled people receive needs to be more personalised and tailored to their needs.
On Wednesday, the Chancellor promised further support measures for employment – and we’ll be keeping a close eye on what is being proposed.
Whilst there was confirmation that the Government would be committing to a further investment in the NHS, it remains extremely concerning that there was no mention of social care in the Chancellor’s statement.
A third of all social care users are disabled people, and access to the care system is critical in supporting many people to live independently. But we know that the system is under increasing demographic and financial pressure, and that the rationing of care is already having serious implications in supporting disabled people to get up, washed, dressed and out the house each day.
It’s therefore essential that the commitment to investing in the healthcare system is matched by a sustainable future funding solution for the care system in the Comprehensive Spending Review later this year.
In addition, there needs to be greater clarity on what the integration of health and social care and the implementation of the Better Care Fund will look like for disabled people.