Welfare Reform Bill

Debate between Lord Patel and Baroness Hollis of Heigham

Tuesday 8th November 2011 Grand Committee

[Lord Patel]

My Lords, I support the amendment moved by the noble Baroness, Lady Lister, but I would also remove Clause 52 from standing part of the Bill. Many charities including CLIC Sargent, a charity which supports children with cancer, and other disability charities are also against this clause. The charities, such as that leading charity for young people with cancer, have serious concerns because of the negative impact that proposals in the Bill will have on young cancer patients and other disabled young people. I believe the Government must undertake a proper assessment of the financial support available to those young people with long-term health conditions and/or disabilities before making these changes, as well as considering the cumulative impact of their programme of welfare reform on this age group.

I emphasise that my proposals do not seek to secure higher rates of benefit for those aged 16-24 but simply to ensure a more level playing field in relation to access to benefits and financial support. For example, I believe it is wrong that students with a long-term illness must already be in receipt of DLA to be eligible for income-related ESA. These proposals are supported by other charities too, particularly young disabled peoples’ charities.

As far as cancer is concerned, every day 10 families are told that their child has cancer. A study in 2007 found that 83 per cent of families incur significant extra costs associated with their child’s cancer treatment, with 68 per cent of families experiencing worrying financial difficulties. New research, published last December, found that on average young people with cancer spent £277 each month over and above their normal expenses, as a result of their illness. Half of those young cancer patients surveyed had to borrow money as a result of their illness. More than one in five had borrowed over £1,000, with almost one in 10 borrowing over £2,000. The top two expenses were travel and clothing.

My proposal would retain the youth provisions for contributions-based employment and support allowance and would ensure that young people with long-term health conditions and/or disabilities are not disadvantaged under the proposed new arrangements for ESA. The reason for these proposals is clear; under the youth provision, a person under the age of 20 who is not in full-time education and who has had a “limited capability for work” for 196 consecutive days can gain entitlement to contributory ESA despite not having reached the contributions threshold. ESA youth claimants are disabled people who are aged 16-19 inclusive or who satisfy the age exception rule, which revolves around rules for education or training, if aged between 20 and 25; they have at least 28 weeks of continuous medical evidence to support a claim for ESA; they are not in full-time education; they have been resident and present in Great Britain for 26 out of 52 weeks prior to the claim; and they do not meet the normal national insurance contribution requirements.

The youth rules were introduced for incapacity benefit in April 2001 as a result of provisions in the Welfare Reform and Pensions Act 1999, which were intended to,

“refocus benefit on people disabled early in life who have never had the opportunity to work and gain entitlement to incapacity benefits through the payment of contributions”.—[Official Report, Commons, 6/11/00; col. 96W.]

The rules were carried over into ESA following the Welfare Reform Act 2007, again to ensure that young people who might not have had the opportunity to build up a sufficient contribution record would not be excluded from the non-means-tested allowance.

The Government intend to abolish the youth condition as part of the Welfare Reform Bill, as well as time-limiting its receipt to 12 months for existing claimants. The justification for this change, as set out in the impact assessment, is that it will simplify the benefits system and ensure consistency of treatment for those claiming ESA. This assessment completely fails to recognise that young people with long-term health conditions and/or disabilities are already in a place of disadvantage in comparison with older adults, hence the introduction of the youth condition in the first place, and that this change will entrench this disadvantage. This will mean that young people, including those unable to work because of cancer, for instance, will be extremely unlikely to be able to access the contributory element of ESA and will have recourse only to the means-tested income-related element to be subsumed into universal credit. Young people who are ineligible for the income-related component, which will include those with a partner who works more than 24 hours a week and some full-time students, could therefore lose up to just under £100 a week. This will have a devastating impact on those who are unable to work and are struggling with the significant additional costs of a cancer diagnosis.

The eligibility of young people for benefits is extremely dependent on their circumstances, particularly in relation to their education status. There are serious concerns, for example, about how students are treated under the system. Full-time students are able to claim income-related ESA only if they are already in receipt of DLA. I can give noble Lords a case study. This is another example of how the eligibility rules currently disadvantage young people. I am also concerned about the knock-on effect of many young cancer patients who are students becoming ineligible for DLA as a result of the introduction of PIP, removing their eligibility for ESA. It is critical that the Government ensure that the eligibility of students with long-term health conditions and/or disabilities for ESA is not dependent on their receipt of DLA.

I shall give noble Lords an example of a student. A young woman of 20, who was a full-time university student, was diagnosed with an aggressive sarcoma and came home to have treatment. Her mother is a single parent on income support with a younger child. The mother’s former partner died of cancer during the young woman’s treatment, meaning that the mother no longer received child maintenance for a younger child. The young woman was refused DLA initially and, as a result, was ineligible for ESA. In addition, this meant that the mother was not eligible for carer’s allowance, nor did the patient have access to a student loan, as she had taken a year out from university to have treatment. The family of three was therefore living on the mother’s income support alone and was in huge financial trouble, completely unable to pay the bills and under a lot of stress. The social worker, supported by CLIC Sargent, applied for a reconsideration and the patient was awarded DLA, which meant that she could get ESA, her mum got carer’s allowance and they got some housing and council tax benefit. Without the DLA and other benefits, this family would simply not have been able to cope financially.

A further 10 per cent of people will lose almost £100 a week by virtue of not qualifying for income-related ESA. Over a year, this amounts to £5,000. Only 20 per cent, or just under 3,000 claimants, will get exactly the same amount of income-related ESA that they would have got under the youth provisions. Based on government estimates, this loss of income may affect as many as 10,000 people by 2015-16. It is wrong that this saving should be levied from such a small group of vulnerable young people. Indeed, the department’s own impact assessment notes:

“The abolition of the ESA ‘Youth’ provisions is more likely to have an impact on disabled people because ESA is directly targeted at people with health conditions that limit their ability to work. There is a risk that the affected group will be more likely to need more support because of their condition than all ESA customers”.

My amendment is linked to my subsequent amendments in that they all seek to create a more level playing field for those young people with long-term health conditions and disabilities who require support through the benefits system.

[Baroness Hollis of Heigham]

I wanted to say only that I support the very moving amendments of my noble friend Lady Lister and the noble Lord, Lord Patel. When we introduced the 1999 Act, which I remember vividly, and replaced invalidity benefit with incapacity benefit, we considered and decided against the proposals that are now being introduced. This was primarily on the grounds of decency, but behind that lay another argument. The group that we were most concerned about at that time was not so much the cancer patients to whom the noble Lord, Lord Patel, referred, but those people with severe learning difficulties who would never find their way fully into the labour market and, as a result, could never build up contributions or savings. They might at some point receive a modest legacy or something that would help them but we did not want contributory IB to be dependent on that lottery. Therefore, we did not go down that road. Given the very small sums of money involved, in the interests of decency and given that such young people cannot build up the financial resources—and often the practical resilience, with the help of partners and so on—to allow them to cope, I very much hope that the Minister will think strongly about reconsidering the approach taken in Clause 52.