The Scottish Government

Discussion paper to Disability Working Group, Satellite Group 4

POVERTY, BENEFITS AND GRANTS

Sally Witcher June 2005

1. Poverty and disability

Disabled people are likely to be particularly vulnerable to poverty because:

• We have restricted access to earned income, due to employment barriers (attitudes, environmental barriers, educational disadvantage, etc).
• At the same time, we incur extra costs associated with disability.
• There are inadequacies in social security benefits and other sources of support, which mean that gaps remain between income needs and the income they provide.

2. Facts and figures

Disabled people's incomes

Approximately 42% of all households with a disabled person have an annual income of £10,000 or less compared to 26% of households where no one has a disability or long term illness (Scottish Executive, 2004). Four in ten (40 per cent) households without a disabled person have an income over £20,000 compared to only 16 per cent of households with a disabled person (see DRC 2005).

Households Below Average Income figures (HBAI 2002/03) show that in households with at least one disabled adult:

• a quarter of individuals were living on a low income compared to a fifth of those in households with no disabled adult
• a third of all working-age adults were living on a low income - almost twice the rate for working age adults in households without a disabled adult
• a third of children were on low incomes compared to a quarter of children in households without a disabled adult

In August 2003, 554,000 people of working age claimed at least one key benefit. Almost two thirds (65%) were from the 'sick or disabled' client group. (See Scottish Executive 2004)

Extra costs of disability

Disabled people can incur a variety of extra costs, including for mobility, personal assistance, special diets, additional heating, equipment, adaptations, etc. Some extra costs may be unavoidable, e.g. for special diets or extra heating. Others are a direct consequence of social barriers, such as inaccessible public transport. Disabled people may also be less able to shop around for bargains, buy in bulk or buy frequently, because of inaccessible transport, stamina issues or time constraints (e.g. time limitations on PA assistance). Items which are helpful but inessential for others may be essential for disabled people, e.g. a car, freezer, or washing machine.

Recent research (Smith et al 2004) into disabled people's living costs found disabled people experience additional costs in most areas of everyday life, from major expenditure on essential equipment, to ongoing higher expenses for food, clothing, utilities and recreation. The weekly income of disabled people solely dependent on benefits is approximately £200 below the amount required for them to ensure an acceptable, equitable quality of life. Unmet weekly costs for disabled people who work 20 hours per week at the minimum wage are up to £189 (for those with high-medium needs).

A report on the cost of childhood disability (1998) found it costs an estimated average of £7,355 a year to bring up a child with a severe disability - at least three times more than the amount required to bring up a child without a disability. Benefits for severely disabled children would need to be increased by between 20 and 50 per cent, depending on the child's age and type of impairment, to meet the costs of the minimum essential budgets. Increasing family income through paid employment is often not an option because of the demands of caring and lack of suitable childcare.

The high rate of poverty among disabled people is not always reflected in official statistics (Zaidi and Burchardt, 2003). Furthermore, 'a worryingly high proportion of those who face extra costs receive no extra costs benefits at all: 9 per cent of non-pensioners and almost one-third (30 per cent) of pensioners. The particularly large gap for pensioners may be related to the fact that there is no help with mobility-related costs for those who become disabled over the age of 65.' (p.48).

3. Disability benefits

Access to benefits can depend on age, role, household composition, income and savings, national insurance contribution, severity of disability (measured in various ways), where disability was acquired and whether or not you get another 'passporting' benefit. There is insufficient space here to do justice to the complexities of disability benefits. The main ones are briefly described below. For more information see http://www.disabilityalliance.org/check7.htm .

Disability Living Allowance (DLA) - is for people under 65. It has a care component (three possible levels of award) and a mobility component (2 levels). Attendance allowance is for people over 65 (the same as the top two levels of DLA care component). The benefit is non-taxable and non-means tested.

Incapacity Benefit (IB) - is for people judged incapable of work (although you can still do some 'permitted work). IB is paid at a short term lower rate, short term higher rate and long term rate. It isn't means tested (although can be reduced if you also get occupational pension). Entitlement depends on NI contributions if you're over 20. Reforms to IB are in the pipeline, and the 'Pathways' pilot is already underway (including one in Scotland), testing out Condition Management Programmes and other things.

Income Support (IS) - is a means tested benefit. You can get additional amounts (premiums) if you have a disability or provide care. The same applied to Housing Benefit, Council Tax Benefit and income-based Jobseekers Allowance (for people actively seeking work).

Working Tax Credit (WTC) - provides top-ups for low earnings. There is an additional amount for disabled people - a 'disabled worker' element and a 'severe disability' element.

There are also a series of (often more generous) benefits for people who acquired their disability in the work-place (Industrial Injuries Benefit) or at war (War Pensions).

4. Grants and other sources of income and support

Many of the following (but not all) fall within the remit of the SE@

Access to Work - accessed through Jobcentre Plus (nb Westminster Government responsibility). It can provide grants to disabled people in work for equipment, a support worker, adaptations to premises, fares to work (see http://www.jobcentreplus.gov.uk/cms.asp?Page=/Home/Customers/HelpForDisabledPeople/AccesstoWork )

Direct payments are accessed through local authority social workers. They provide funds with which a disabled person can buy in assistance of their choice.

The Independent Living Fund (or Funds - one for recipients pre 1993 and another for applicants since the who need more help than their local authority can provide) is a national resource dedicated to the financial support of disabled people to enable them to choose to live in the community rather than in residential care. The Funds are constituted as publicly financed discretionary trusts. They are funded by DWP. Both are available in Scotland.

The Family Fund provides grants and information to families caring for severely disabled or seriously ill children. It is UK-wide, but the Scottish Executive contributes funding (out of a total grant of £29.3mn in 2003/04 England received £22.7mn for 32,466 families and Scotland £2.7mn for 3880 families).

Disabled Students Allowance - this is for Higher Education students and it can provide an allowance for equipment, non-medical help, and a basic allowance. There are a variety of other forms of support for students in Further and Higher Education (see http://www.skill.org.uk/info/infosheets.asp )

National health benefits - include free prescriptions, dental care for certain groups, http://www.disabilityalliance.org/f14.htm

Housing adaptation grants are accessed via social work, who have to approve them. Applications then go to the housing department. Grants are means tested, and the process can take a long time.

NHS equipment and adaptation services - The Scottish Executive has announced an extra £5 million of NHS funding, mostly for community medical services and NHS wheelchair services to support improvements in equipment and adaptation services, aiming to reduce waiting times, tackle unmet needs and improve joined up working.

Transport support includes concessionary bus passes, taxicards, the blue badge scheme, disabled person's railcard, motability scheme (enabling DLA mobility component recipients to purchase or lease a car) and free tax disks.

If all else fails, there are a large number of charitable trust funds which can provide assistance, e.g. to help with equipment (contact Grapevine 0131 475 2370).

5. Defining income adequacy

There are different ways of defining poverty, e.g. in relation to average incomes, numbers on income support, or through costing 'baskets of goods' of items and activities judged necessary for a decent standard of living (known as developing budget standards). For some, poverty has a narrow focus on income; for others it covers any and all forms of deprivation. But even if the focus is just on income, it is important to recognise that income needs are not fixed. What might be adequate for one set of personal circumstances and in one social context won't be in others. Manifestations of income inadequacy can take many forms. Income adequacy can be affected by a wide range of policy areas, as can the effects of income inadequacy.

People's income needs can change, and not just because their personal circumstances can change. If essential goods and services are centrally funded by taxation, and are therefore 'free at the point of use', clearly there is less need to have the cash to pay for them. If disabled people depend disproportionately on certain services or goods, they will be disproportionately affected by price increases of changes to charging structures.

Adequacy is not just a matter of what is provided (how much money), but how it's provided. Factors affecting adequacy include:

• Access criteria - who can/ cannot get what and why/ not
• Structure - means tests can create disincentives to increase income and trap people into poverty. Particular problems arise when a number of means tests and withdrawals interact
• Security/ Flexibility - Another reason why people get trapped is because they fear losing benefit, e.g. if they try to work, or changes in circumstance necessitate a recalculation which can take time, or packages are not geographically transferable
• Information - how easy it is to get information about what is available, whether it is in appropriate formats
• Location - disability access issues, transport costs, etc
• Complexity - if the system is complex and rapidly changing, people may not be aware of their entitlements
• Stigma - if application procedures are stigmatising, or require personal or sensitive information, there will be disincentives

6. What could the Scottish Executive (SE) do?

Although the SE doesn't have responsibility for benefits or employment policy, there is still a lot it could do to reduce disabled people's poverty, not just by increasing grants and support (see above), but also by reducing income needs or opening up access to income. Possibilities might include:

Reducing income needs

• Changes to local taxation
• Introduce individualised budgets?
• Remove prescription charges - the Welsh Assembly has introduced free prescriptions for everyone living in Wales
• Schemes for home insulation might reduce heating costs
• Free personal care could be extended to younger people
• More accessible public transport - the DRC is currently consulting on a new Code of Practice in advance of changes to the law next year, obliging transport operators to treat disabled people fairly and there is a consultation event planned for Scotland (see www.drc-gb.org ).

Opening up access

• Increase the scope of Disabled Students Allowance and other forms of education support, e.g. by making DSA available to all postgraduate students, FE students, etc (a Disability Stakeholders Group has been set up by SE Funding for Learners division to advice on support for disabled students - currently underway)
• Fund welfare rights workers and disability information services
• Measures to increase employability/ change employer attitudes (Satellite Group 1)
• Support the building of links/ partnership working between disability organisations and local jobcentre plus offices. Disability organisations might be a 'route in' to Jobcentre Plus (JCP).
• Extend support and advice to disabled people wanting to access direct payments, etc.
• One-stop shops - where people can get advice/ support on a variety of different things in one place (e.g. health services, benefits and employment advice, community care information/ support, perhaps from CILs). On similar lines, they could site additional services where disabled people might go anyway, such as GP surgeries (there have been successful schemes to site employment advisers in GP surgeries)

There is also much that could be done at local authority level to reduce income needs (e.g. reductions in service charges) and to open up access.

References and further information

DRC (2005) Disability in Scotland 2004: Key Facts and Figures

(see http://www.drc-gb.org/scotland/publicationsandreports/research.asp?section=8

Dobson, B. & Middleton, S, (1998) Paying to care: The cost of childhood disability, YPS ((See http://www.jrf.org.uk/knowledge/findings/socialcare/scr748.asp)

Scottish Executive (2004) Social Focus on Disability 2004 Scottish Executive (see www.scotland.gov.uk/cru/resfinds/sfod04-00.asp chapter 7)

Scottish Executive. (2003) Scotland's People: Results from the 2001/2002 Scottish Household Survey, Volume 7 Annual Report. Edinburgh: Scottish Executive

Smith, N, Middleton, S, Ashton-Brooks, K, Cox, L. and Dobson, B. with Reith, L. (2004) Disabled people's costs of living: More than you would think, York: Joseph Rowntree Foundation. (see http://www.jrf.org.uk/knowledge/findings/socialpolicy/054.asp for 'findings' summary, and http://www.disabilityalliance.org/report.htm to download full report)

Zaidi, A. and Burchardt, T. 2003. Comparing incomes when needs differ: equivalisation for the extra costs of disability in the UK, Centre for the Analysis of Social Exclusion, London School of Economics.