How the Disability Living Allowance is being reformed

A response from the Minister for Disabled People.

I was concerned to read the recent New Statesman blog about reforms to Disability Living Allowance (DLA) which was based on a number of factual inaccuracies about the new benefit - the Personal Independence Payment (PIP). I’d like to address those inaccuracies to prevent unnecessary concern and hopefully address those the writer had for people in their care.

PIP is very much a ‘personal’ payment and recognises that everyone is different. Even two people with the same condition can be affected in different ways - so a key part of the new benefit is making sure that we have a fuller understanding of how someone’s disability or condition affects them.

Face-to-face consultations help us do just that and give claimants the opportunity to discuss in person with a healthcare professional how their condition affects their ability to live an independent life.

In the article, the writer expresses concern that some claimants will find travelling to a PIP assessment difficult and stressful. Not everyone will be asked to attend a face-to-face consultation – for example where there is sufficient supporting evidence available the assessment can be carried out on a paper basis. These decisions will be made case by case.

Your readers might also be interested to know that Capita are taking a new approach and will provide many consultations in a claimant’s own home. They also aspire to make sure that around 40 per cent of their advisers; centre hosts and administrators will themselves have long-term health conditions or be disabled.

The writer says that the assessment will prioritise testimonies from GPs, over other evidence. This is not the case. The decision to award the benefit will be based on all of the available evidence, including the claim form, the report from the assessment provider and any other evidence provided.

The writer mentions ‘Jane’ who has Parkinson’s disease - and suggested the assessment might be inaccurate and overlook the practical tasks she cannot complete and the social interactions she cannot have.

The new PIP assessment focuses on exactly that – the challenges that individuals face. Unlike DLA, people claiming PIP are given the opportunity to describe their condition both on good and bad days, and the new assessment has been specifically designed to better recognise fluctuating and mental health conditions. The assessment also looks at reading, verbal communication and how someone engages with other people.

The writer also mentioned her concerns about eligibility for the mobility component of PIP, specifically around the distances a claimant can move. The assessment will look at the claimant’s ability to move around without severe discomfort, and will also consider whether the individual can walk – or undertake any of the activities - safely, to an acceptable standard, repeatedly and in a reasonable time period. This means, for example, that someone who can move more than 20 metres, but can’t do it in a safe and reliable way, would actually get the enhanced rate.

The writer also asked why people should be regularly re-assessed, especially if their disability or illness is not going to change. PIP is based on how a person’s condition affects them, not the condition they have. So although someone’s condition may not change, the impact it has on their life may do so. That is why we will be regularly contacting people to make sure they are getting the right levels of support as their needs change over time.

Under the current system 71 per cent of claimants get an indefinite award without any systematic reassessments and every year this has led to hundreds of millions of pounds of both over-payments – and more worryingly - under-payments.

Disability Living Allowance was introduced over twenty years ago and it was widely accepted by all political parties that it was badly in need of reform to better reflect today's understanding of disability. The new face-to-face assessments and regular reviews, which are missing under the current system, will ensure that the billions we spend on the benefit gives more targeted support to those who need it most.

We rightly continue to spend around £50bn a year on disabled people and their services and I am proud that we are one of the world leaders in the rights for disabled people with the UK spending on disability-related benefits a fifth higher than the EU average.

We are not 'moving the goal posts' to reduce welfare spending. Funding on this benefit will in fact increase over the course of this Parliament, and what we are doing is making sure every penny of the £13bn budget we continue to spend is targeted at those who need it most.

Esther McVey is the Conservative MP for Wirral West and the Minister for Disabled People at

Photograph: Getty Images
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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/