Welfare Reform and Work Bill (Second sitting)

Debate between Corri Wilson and Victoria Atkins

Thursday 10th September 2015 Public Bill Committees

[Victoria Atkins]

I am sorry, I was just asking about the rate of the salary.

Tony Wilson: There is an important point here. What drives the experience of the benefit cap is having children and living in the private rented sector. Families with children often have quite high entitlements to tax credits. For example, a family with earnings of £26,000 and three children would receive £5,500 in tax credits. They would also receive £2,500 in child benefit, and they would likely be receiving housing benefit if they were in the private rented sector. So benefits do exist for people on low pay as well as for people out of work. Essentially, a lower benefit cap brings more people into the benefit cap, but these are often people with large families in the private rented sector who would be receiving support in work.

[Corri Wilson]

Q 40 This is a question for Kirsty and Tony. How can you incentivise people who have been assessed as ill to get back to work? When we are capping people who receive severe disablement allowance, how is this treating people fairly?

Tony Wilson: Can I make two quick points to add to Kirsty’s really good, comprehensive list of what works in supporting disabled people and those with health conditions? One further thing is early intervention. One thing we could do much better to incentivise and support is to intervene much earlier. We intervene very late. By the time somebody has got through the work capability assessment and the ESA, they have probably been out of work for a year or more, although they might have been previously in work. Early intervention is really important. The earlier we can engage people, the easier it is and the more effectively we can incentivise a quick return to work.

In terms of financial incentives, for example, one thing that was abolished in 2011 was the in-work credit, which was a payment made to people who were claiming incapacity benefit or ESA when they returned to work. The in-work credit was paid at about £50 a week for 26 weeks. We did a qualitative evaluation of that; there was never a formal impact assessment of it. There is very good literature around financial incentives to individuals when they move into work, internationally. It is not something tested very well here. We should look at how we create financial incentives. It is a behavioural tool to support people to make the transition into work and help to meet the transitional costs of work.

As others have said, I have significant concerns around the incentive and disincentive effects of the changes to the ESA WRAG. As much as anything, the most likely effect is to further increase the cliff edge between the support group and the rest of the benefits system. It will probably make the WCA even more of a mess. It will clog up the system even more with appeals and problems. We need the fundamental reform that Charlotte talked about.

Kirsty McHugh: One of the positive things over the past few years has been the introduction of the Health and Work Service. We need to stop people becoming long-term sick to begin with. The early intervention with the employer is important so that when somebody becomes ill, they are prepared to keep them in work. We need to keep an eye out to ensure that that is doing what we want it to.

A lot of people get assessed to death. They go through the personal independence payment assessment and the WCA. They are assessed by the employment providers. We could probably streamline some of that process—that is the outsourced sector and the DWP element. At the moment we are not sharing those assessments in a sensible way. We could probably take some costs out of the system and make life much easier for the people who are subject to it if some of those system issues were more effective than they are currently.