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Call for reform of incapacity benefit

On 5 December 2004, the Institute for Public Policy Research (ippr) published a report (Fit for purpose: the reform of incapacity benefit) which finds that the government must reform incapacity benefit if it is to achieve its full employment and social justice goals.

The report concludes that incapacity benefit has become a barrier to work. Claimants must demonstrate that they are incapable of work and therefore risk losing their benefit if they look for a job. Yet at the same time they are required to attend work focussed interviews. The report also finds the benefit is failing to ensure a decent standard of living for people with a health problem or disability who cannot work, with the average payment totalling just over £4,200 a year.

The report recommends a new active welfare reform strategy in which incapacity benefit is replaced by:

• A flat rate 'Earnings Replacement Allowance' - de-coupling disability from incapacity as well as removing the incentive to move off Jobseeker's Allowance and the incentive to stay on incapacity benefit longer to qualify for extra cash;
• Mandatory action agreements - negotiated between well-trained Personal Advisers and claimants. Agreed actions could include steps towards social and economic inclusion for those people who cannot work such as condition management, or may include work-search activity, actions to enhance employability through training and education; and
• An enhanced Disability Living Allowance - to ensure that the extra costs of living with a health problem or disability can be met.

A summary can be viewed on the ippr website