We welcome this consultation on the proposals set out in the Pathways to Work Green Paper reforming the social security system for people with disabilities and/or long-term health conditions.
We support the Government’s stated ambition to improve living standards and increase labour market participation among those with a long-term health condition or disability. Ensuring equitable access to and support maintaining good quality, well-paid work is vital. Equitable access and support would acknowledge the real-world barriers to accessing and staying in work for people with specific, individual needs.
We are concerned, however, that proposals to reduce disability benefits and tighten eligibility criteria risk undermining these aims. Our research shows problem debt, poverty and ill-health and disability are deeply intertwined, with a two-way relationship between financial insecurity and poor health. Financial hardship and problem debt harm mental and physical health, and disabled people are twice as likely to experience problem debt compared to the general population.
We see greater financial difficulty among our disabled clients and clients with a long-term health condition, who are more likely to be in arrears on their energy and household bills. Meanwhile, 38% had a negative budget, compared to 30% of all clients. This means that after going through a full debt advice and budgeting session, their monthly income is not enough to cover their basic costs.
People with disabilities and/or long-term health conditions face higher average living costs and greater barriers to building financial resilience. In the absence of a robust social security net, they are more susceptible to financial difficulty and problem debt.
A narrow focus on reducing the number of benefit claimants risks missing, and even worsening, the broader structural challenges at play. Viewing the welfare system through the lens of efficiency and minimisation is the wrong approach. It puts short-term savings ahead of vulnerable people. It is also likely to be counter-productive in the long-term, exacerbating pressures on already stretched public services.
Rising claims for disability benefits must be understood in a context of demographic change and broader financial difficulty and ill health linked to the impact of the Covid-19 pandemic and the persisting cost-of-living crisis. The latter in particular has had a lasting impact on health and exacerbated pre-existing issues within the NHS leading to long waiting lists for treatment and deepening and health inequalities.
The Government’s plans to reform the NHS are welcome, but the rewards of investment will not be reaped in the short-term. In fact, there is a genuine risk that encouraging people into work when they’re not ready will make people sicker, putting greater strain on the NHS. Work is not a viable option for many who are disabled and/or have long-term health conditions. For this group a stronger social security system is essential to meet additional costs and provide a dignified quality of life.
We support the principle of an effective unemployment insurance payment, and the aims of preventing people from falling out of the labour market and supporting them to adapt and adjust to health issues. However, we do not agree the Government’s proposals to end ESA payments to the ‘support’ group should be taken forward in their current form, which will reduce support and increase risks for a vulnerable group with more serious health conditions unable to work.
StepChange has long been calling for the benefit system to reflect the real costs of living, including for people with a disability and/or long-term health condition, one which guarantees that people can make ends meet, build financial resilience and lead a dignified life. To support that aim, StepChange has called for an independent Minimum Income Commission to make recommendations on the adequacy, design and funding of social security payments.