Box sets » Welfare spending » Incapacity and disability benefits
Economic and fiscal outlook - December 2014 | Box: 4.7 | Page: 154In Chapter 4 of our December 2014 EFO, we discussed the fiscal outlook for 2014-15 to 2018-19. In this box, we discussed revisions we made to the forecast in light of reforms to incapacity and disability benefits. Spending on incapacity benefits was revised up by £0.7 billion a year on average between 2014-15 and 2018-19, largely reflecting a lower-than-expected number of Work Capability Assessments carried out by the Department for Work and Pension’s private contractors. On the basis of the latest evidence, spending on disability benefits was also revised up by £0.7 billion a year on average between 2014-15 and 2018-19. This was largely due to higher than expected success rates for new claims to the personal independence payment.
Welfare trends report - October 2014 | Box: 4.1 | Page: 48In our 2014 Welfare trends report, Chapter 4 reviewed the overall trends in welfare spending. In this box, we considered how responsive welfare spending is to the economic cycle by estimating the elasticity of benefits and tax credits spending as a share of GDP with respect to changes in the output gap (the difference between actual GDP and an estimate of its potential or underlying level). We found that the most counter-cyclical benefits have caseloads closely associated with the economic cycle whereas mildly counter-cyclical benefits are likely to only exhibit cyclicality due to spending varying less than GDP, thereby producing a denominator effect.