Public financial support for disabled people extends beyond the extra-costs disability benefits considered in this report, and includes several other welfare payments. In many cases, these payments are directly related as eligibility for one affects eligibility for another. This box gives an overview of some of the most important interactions between disability and other benefits. Our 2014 Welfare trends report provided a fuller overview of sickness and disability benefits.
Disability premia in DWP-administered benefits
Disability premia are extra amounts of money included in assessment for income support, income-based jobseeker’s allowance, income-related employment and support allowance (ESA), housing benefit and pension credit. Premia vary according to the severity of conditions, with enhanced and severe disability premia awarded for those with greater needs. Eligibility is linked to the receipt of qualifying benefits such as AA, DLA and PIP. Changes in AA, DLA and PIP caseloads therefore affect the cost of disability premia awarded with other benefits.
Just over a million working- and pension-age adults receive a severe disability premium in ESA, pension credit, income support or jobseeker’s allowance, worth £64.30 a week for each recipient, and around £3.5 billion a year in total.a 225,000 claimants receive an enhanced disability premium in ESA or income support that arises solely from their receipt of a relevant disability benefit.b This is worth £16.40 a week per single recipient (£23.55 for couples) and costs around £0.2 billion a year. A small number of income support claimants also receive a disability premium solely by virtue of receiving DLA or PIP.c
Looked at another way, 24 per cent of working-age DLA or PIP claimants receive a severe disability premium, and 20 per cent of pension-age disability benefit claimants do so.
ESA, income support, jobseeker’s allowance and housing benefit are being replaced by universal credit, which does not include disability premia. Pension credit will continue to have disability benefit-contingent amounts under current policy.
Disability elements in tax credits
Working tax credit (WTC) and child tax credit (CTC) both pay additional amounts in respect of disability. The ‘disabled worker element’ in WTC is worth £3,090 a year and is paid to families containing a disabled person who works at least 16 hours a week and meets both a disability test and a qualifying benefit test. 121,000 disabled worker elements were in payment in 2016-17, the latest year of finalised award statistics. The ‘severely disabled worker element’ in WTC is worth £1,330 a year and is paid to families containing at least one person in receipt of a higher rate disability benefit, regardless of whether that person is working: 42,000 were in payment in 2016-17. The ‘disabled child element’ in CTC includes two rates: the disabled child rate is worth £3,275 a year and the severely disabled child rate is worth an additional £1,325 a year. Payment is determined by receipt of a qualifying benefit, with the rate paid determined by the rate at which the qualifying benefit is paid. 199,000 disabled child elements and 77,000 severely disabled child elements were in payment to in-work families in 2016-17.d
In 2017-18, the total cost of disability elements in tax credits was £1.9 billion.
Carer’s allowance (CA) provides support for carers of sick and disabled people who require regular care. Eligibility is subject to caring for someone in receipt of a qualifying rate within a qualifying benefit. This includes AA, the highest and middle rates of the DLA care component, and the PIP daily living component. CA cannot be received where the person being cared for receives a severe disability premium. Around 53 per cent of child DLA qualifying claims have an associated CA payment for a carer, while 19 per cent of qualifying working-age disability benefit claims and 8 per cent of pension-age qualifying claims do. Spending on CA reached £2.8 billion in 2017-18, with around 0.8 million people receiving on average £3,400 over the year. CA in Scotland has been devolved to the Scottish Government.
Overlaps and interactions with other benefits and wider public spending
Disability benefit recipients often receive one or more other benefits, whether related to their disability or not. ESA is the main incapacity benefit that supports working-age people who are unable to work due to sickness or disability. Spending on ESA in 2017-18 was estimated at £15.4 billion, with around 2.2 million people receiving on average £6,600 over the year. Around 1.4 million ESA recipients (60 per cent) were also in receipt of DLA or PIP. There is no direct link between ESA and DLA or PIP – other than for premia – and the claims processes are entirely separate. But receipt of them is highly correlated due to overlapping eligibility criteria and the fact that claiming one can prompt an individual to claim the other as they realise they are entitled to both. This effect is seen most prominently around state pension age where there is no income-replacement benefit tied to health for pensioners.
Beyond the benefits system, there are other important interactions, most significantly with the social care system, where changes in provision can affect claims to disability benefits through the take-up behaviour of claimants.