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The sharp rise in the number of people claiming health-related benefits in the UK is not due to worsening health conditions or longer waiting times for treatment, but to flaws in the design of the welfare system, a peer committee has announced.
The House of Lords Economics Committee has urged ministers to urgently work to prevent the annual cost of incapacity and disability benefits from rising sharply from the current £64.7 billion to a projected £100.7 billion by 2029-30. called for action.
The findings cast doubt on the government’s assumptions ahead of a promised overhaul of the welfare system, while highlighting the strain that rising benefit bills are putting on other spending on public services. There is.
In a letter to Work and Pensions Secretary Liz Kendal published on Monday, the commission said there was “no convincing evidence” that the rise in benefits was due to poor health conditions or NHS waiting lists. said.
“People without work have an incentive to claim health-related benefits, and once they receive them, there is no incentive or support to find and accept work,” it warned.
Committee Chairman Sir George Bridges said: “This is a huge and growing social problem. The (government’s) timeline does not show the needed urgency.”
He added that ministers had promised to publish a welfare reform plan in the spring, but it would be too late to factor savings into this year’s spending review.
The committee’s diagnosis of the problem differs from the story Mr Kendall gave in the autumn when he set out reforms to jobseeker support in what he called a plan to “make Britain work”.
She explained that the post-pandemic health crisis has made the UK the only country in the G7 to have a reduced workforce, with 2.8 million people said to be unable to work economically for health-related reasons.
Peers said it was not clear whether the overall labor market was now more inactive than in 2019, with issues with official labor market data obscuring the picture.
However, since the start of 2020, the number of working-age people receiving health-related benefits has increased by 1.2 million, now totaling 3.7 million.
The commission said this reflected a strong incentive for people to claim incapacity support rather than unemployment benefits due to the “obvious economic disparity” in the support provided.
The committee said people assessed as unfit to work or look for work could double their income and avoid harsh conditions by moving from Jobseeker’s Allowance to Incapacity Allowance. He added that if he returned to a job that didn’t work out, he risked a significant reduction in his income.
New claims for incapacity benefits have not increased enough to explain the increase in the number of recipients. This is primarily due to the fact that a higher proportion of claims are approved and fewer people withdraw or leave the system after reassessment.
The commission said the process for assessing claims needs to be more rigorous, but the government also needs to do more to help people return to work and ensure they are not disadvantaged by accepting work. He said there is.
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Mr Bridges said unemployment benefits and incapacity benefits interact, so reforms to both would be needed, potentially loosening standards for unemployment benefits while tightening sick pay.
Some of the committee’s recommendations are similar to proposals by his predecessor, Work and Pensions Secretary Mel Stride, but they have not been implemented, in part because of legal challenges to the consultation process.
A government spokesperson said the UK was “determined to get Britain working again” and had already taken the first steps to boost jobs and would consult on health and disability reform in the spring. .
“It is clear that the current welfare system needs reform so it is fairer for taxpayers and people get the support they need,” they added.
