Employment and Support Allowance
Employment and Support Allowance (ESA) is the out-of-work welfare benefit paid in the United Kingdom to people who are having difficulty finding work because of their long-term illness or disability. ESA was introduced in October 2008 for fresh claims to replace three older benefits: Incapacity Benefit; Income Support paid because of an illness or disability; and Severe Disablement Allowance. From October 2008, these three older benefits were no longer available to new claimants, although people already on them were unaffected at first.
Between 2011 and 2014, most of the people who had been on Incapacity Benefit or Income Support since before October 2008 lost their entitlement to their "legacy" benefit: established recipients were assessed for a second time using a different test with more stringent criteria to see whether they qualified for ESA instead (the expectation within Westminster was that a million of these claimants - 40% of the entire caseload - would not be disabled enough to qualify for the new benefit). Of the Coalition Government's controversial package of welfare reforms, this was the policy that had the best prospect of generating substantial savings for the public purse - but also had the greatest potential impact on claimants.
Everyone who claims ESA must be assessed and successful claimants will be liable for reassessment at the discretion of the Department for Work and Pensions. The test most people will undergo is called the Work Capability Assessment. The latest data on the success rate of new ESA claims show that after their assessment, 62% of people now receive the highest level of benefit; another 13% are also found to be unfit for work but are deemed to be able to take part in 'work-related activity'; while only 25% are found to be fit for work and therefore ineligible for ESA. Outcomes after reassessments are now even better from a claimant's point of view.
Despite the major changes made to welfare in the last decade, the total number of people on out-of-work sickness benefits has remained much the same: about 2.5 million, and not one penny has been saved since 2010 from the £13billion sickness benefit budget.
Who can claim?
An individual can put in a claim for ESA if they satisfy all of these conditions:
- They have a fit-note (previously known as a 'sick-note')
- They are over the age of 16
- They have not reached State Pension age
- They live in Great Britain or Northern Ireland
They will not be paid ESA if they are entitled to Statutory Sick Pay (this usually means 'if they have a job', but there are exceptions) and it is not possible to receive ESA at the same time as the other main out-of-work benefits i.e. Jobseekers Allowance - received by 683,000 people - or Income Support, given nowadays to 442,000 lone parents.
ESA can be either contributory or income-related. If claimants have paid enough National Insurance they can claim contributory ESA for up to one year if they get the work-related activity component, or indefinitely if they get the support component (see below). Income-related ESA is for people who have not paid enough National Insurance and is subject to a means test and certain other conditions (although the amount paid as contributions-based ESA can also be affected by financial circumstances).
If a spouse or partner is also receiving out-of-work benefits, this might affect entitlement.
Universal Credit, which is received by 141,000 people nationally, can sometimes be paid in addition to contributions-based ESA.
The ESA claims process
Someone wanting to claim ESA will need a medical certificate, i.e. a sick-note, nowadays known as a 'fit note', signed by their GP to say that they are not fully fit for work. The new claimant must then first contact the DWP, usually by phone, who will log their claim and then post them a questionnaire to complete (except in rare circumstances where a full assessment isn't required, such as when a doctor has officially certified the claimant as being likely to die within six months). The completed form must then be sent in the envelope provided to the Health Assessment Advisory Service - the trading name of the assessment provider, Maximus.
Once a person has submitted a claim for ESA, they will normally be paid 'assessment rate' ESA at the same rate they would be paid if they were on Jobseekers Allowance, except for the first week in which nothing is paid as the DWP considers it "self covered". During this time - in theory about 13 weeks, but, since 2013, very much longer - a Work Capability Assessment will normally be carried out to determine whether the claimant is disabled enough to qualify for ESA. Each assessment takes about an hour and costs the DWP £190; Maximus aims to do one million assessments each year.
The ESA50 claim form, together with any other information sent with it by the claimant, will first be read by a qualified healthcare professional employed by the outsourcing firm, who will then decide on whether a face-to-face medical assessment is necessary: some people with severe disabilities can be granted ESA based solely on the documents supplied, if that is clear from the paperwork. For this reason, Maximus encourages new claimants to send as much relevant information as possible and give a detailed description of their disability when filling in the claim form.
Assessing capability for work
The test that most claimants will undergo is called the Work Capability Assessment (WCA). The Department for Work and Pensions (DWP) contracted Atos to perform the core assessment when it introduced the new benefit in 2008. Maximus took over the WCA contract - worth £170million a year to the US firm - from Atos in March 2015, although Atos still carries out assessments for the big disability benefit not linked to employment, the Personal Independence Payment, in a separate contract with the DWP that was signed in April 2013.
ESA is for people who face significant extra difficulties in finding work because of the state of their health. To establish whether the claimant meets the DWP's criteria, the assessment - designed by the DWP - is carried out in order to gauge the claimant's ability to work. The WCA has proved highly controversial, with doubts frequently expressed about its freedom from manipulation and its reliability. The test's performance in 2010, 2011 and 2012 was reviewed by Professor Malcolm Harrington and in 2013 and 2014 by Dr Paul Litchfield.
The Work Capability Assessment (WCA) is often described as consisting of two separate assessments. In practice, if they have a face-to-face assessment, an individual claimant will experience only one assessment on the day (the decision-making is done afterwards).
The two stages are:
- The 'limited capability for work' assessment, which determines whether the claimant is entitled to ESA at all.
- The 'limited capability for work-related activity' assessment, which tells the DWP whether somebody who has passed the first stage of the test is able to take part in 'work-related activity'. It also influences the rate of ESA paid to the claimant.
Limited capability for work
At their WCA, an ESA claimant must be found to have 'limited capability for work' in order to qualify. The testing process gauges the claimant’s ability to perform up to 17 activities; these activities are set out on the ESA claim form. For each activity, a claimant can score 15, 9, 6 or 0 points: the more severe their disability, the more points they will score. Points are scored by having physical impairments, mental ones or a mixture of the two (if they are likely to significantly affect the claimant's ability to work). In order to be entitled to ESA, a person will need to score at least 15 points in total.
Other factors, such as some aspects of pregnancy, are also considered by the assessor, who will be a nurse, doctor, physiotherapist or occupational therapist; these factors do not operate on a points system but might nevertheless qualify the claimant for ESA.
If someone who is found to be entitled to ESA is found not to have 'limited capability for work-related activity', they will have to take part in pre-employment training and will receive the work-related activity component of ESA.
If the claimant is found to have 'limited capability for work-related activity', they will be entitled to the support component of ESA after 13 weeks and will not have to undertake work-related activity or have work-focused interviews. Someone will go into this category - known as the Support Group - because they have one or more severe functional disabilities (such as being unable to move 50 metres by themselves) or if certain other conditions apply, such as when there would probably be a substantial risk if he or she were declared fit for work and therefore ineligible for ESA.
A DWP official makes the final decision on entitlement, based on all the available evidence.
The scale of the allowances
Assessment rate ESA is paid at the same rate as Jobseekers Allowance.
The basic weekly allowance plus additional components (as of 9 April 2015) is given below (the basic amount is lower for claimants under 25):
|(weeks 2*-13 only, no
|(payable from week 14)|
|Work-related activity component **||———||£29.05|
|Support component **||———||£36.20|
(* No money is paid for the first week, ** only one component is payable, depending on the result of the WCA process)
From April 2017 new ESA claimants who are placed in the Work-Related Activity Group will receive the same rate of benefit as those claiming Jobseekers Allowance.
Income-related ESA is not time-limited. Similarly, contributory ESA for claimants receiving the support component is not time-limited. However, contributory ESA for claimants receiving the work-related activity component is limited to a maximum of 365 days.
Income-related ESA is not usually subject to Income Tax, but contribution-based ESA is.
ESA: "fundamentally flawed"?
When sickness benefits were first introduced more than a century ago they were seen as income replacements - unlike unemployment benefit, which was a basic subsistence payment intended to tide the claimant over a short period of joblessness.
The first medical test for sickness benefit entitlement—beyond a GP's recommendation—was brought in by John Major's government in 1995. The All Work Test was carried out by doctors working for the government and it set out to assess a claimant's ability to cope with a range of occupations, not just their old trade. Nevertheless, the number of people on Incapacity Benefit rose through the whole of that decade in the aftermath of the run-down of manpower-intensive heavy industry in Britain.
On the first full day of New Labour's second term in office, the Department of Social Security was amalgamated with the Department for Employment to form the Department for Work and Pensions. Shortly afterwards, ESA was conceived: it was designed not just to cap the total number of people on sickness and incapacity benefits but to actively reduce it, reflecting policy ideas dating back to the first New Labour victory in 1997 and beyond. This was to be achieved in four ways:
- ESA would be harder to get in the first place, because its eligibility test would be tougher
- People with mid-range disabilities who were granted ESA would be expected to prepare for a return to suitable work
- ESA recipients would be reassessed at appropriate intervals in the expectation that the health of many would improve
- Once ESA had bedded in, there would be a mammoth reassessment of most of the remaining long-term Incapacity Benefit recipients, in the belief that as many as 40% were able to work
The process of parturition began after New Labour's third general election victory in 2005 - the most obvious sign being Tony Blair's appointment of a former vice-chairman of investment banking at UBS to advise the government on how to reform out-of-work benefits.
In 2006, the Labour Work and Pensions Secretary was looking forward to the number of people receiving sickness benefits falling by one million in the course of a decade once ESA was introduced, thereby saving £7billion a year. In 2007, the Welfare Reform Act received royal assent and Tony Blair announced his resignation shortly afterwards. In October 2008, in the teeth of a sudden recession and a downturn in the jobs market, ESA was born.
The caseload, however, had already peaked in 2004; since then the natural trend has been broadly downwards. The likely reasons for this are: men with the old industrial diseases - caused by working in mines, shipyards and other hazardous environments - died; the WWII 'baby boomers' began to reach State Pension age; and eligibility criteria became steadily stricter.
There was actually an increase in the total number of sickness and incapacity benefits recipients after ESA was introduced, caused by the recession of 2008 to 2010 and its attendant rise in unemployment. Then the falling trend resumed until 2013, at which point expectations were confounded for a second time when the caseload began to grow again despite an expanding economy.
In the absence of the huge fall in recipients prophesied by the architects of ESA, and in spite of the broadly downward natural long-term trend, the total caseload at the end of 2015 was little different from that in 2008.
Reflecting this failure of ESA to achieve its primary goal of shifting large numbers of people off benefits and into work, the cost to the Exchequer of out-of-work sickness benefits did not fall at all after ESA was introduced in 2008, and the annual cost is now predicted to rise to £14 billion or more in the course of 2016.
In January 2016, the Welfare Secretary, Iain Duncan Smith, declared that, in his view, ESA was "fundamentally flawed" and promised that a brand new policy would be "unveiled within weeks". A hint of what that might be was given in a detailed report on ESA published by Reform, the right-of-centre think-tank, the following month:
- The amount of money paid to the claimant could be reduced to that of general jobseekers, because there would only be a single out-of-work benefit payment under Universal Credit
- Some of the savings would be ploughed back into the Personal Independence Payment
- The WCA might be replaced by an 'Occupational Health Assessment' that set out to identify and address the barriers to work faced by the claimant, but which would play little or no role in determining eligibility to, or the size of, the benefit
- Participation in rehabilitation could be made compulsory, unless the claimant chose to forego their benefit payment
- Martin Williams (October 2011). "Unnoticed? The flaw in ESA conversion decisions". Child Poverty Action Group. Retrieved 27 February 2014.
- "Employment and Support Allowance (ESA)". GOV.UK. 2015-08-24. Retrieved 2015-08-30.
- "Employment and Support Allowance (ESA)". GOV.UK. 2015-08-24. Retrieved 2015-08-30.
- "Capability for work questionnaire - Publications". GOV.UK. 2013-04-04. Retrieved 2015-08-30.
- "Work capability assessments: One million disability checks planned - BBC News". Bbc.co.uk. Retrieved 2015-08-30.
- "Employment and Support Allowance (ESA) | Health Assessment Advisory Service". Chdauk.co.uk. Retrieved 2015-08-30.
- "Summer Budget 2015". Disability Rights UK. 8 July 2015. Retrieved 11 July 2015.
- "Employment and Support Allowance". Citizens Advice Bureau. Retrieved 27 February 2014.
- "What is Employment and Support Allowance | Claiming benefits | Money matters". Age UK. 2015-05-22. Retrieved 2015-08-30.
- "The Medical Assessment of Incapacity and Disability Benefits - National Audit Office". NAO. 2001-03-09. Retrieved 2015-09-05.
- John Hills (August 1998). "Thatcherism, New Labour and the Welfare State" (pdf). Centre for Analysis of Social Exclusion: London School of Economics. Retrieved 9 January 2016.
- 09.14 EDT (2002-06-10). "Full text of Tony Blair's speech on welfare reform | Society". The Guardian. Retrieved 2015-08-30.
- "The Rt Hon Lord Freud". www.gov.uk. Retrieved 17 September 2015.
- Roy Sainsbury (2014). "Talking Universal Credit: In conversation with Lord Freud, Minister for Welfare Reform" (pdf). Policy Research Unit, University of York. Retrieved 7 January 2016.
- "UK | UK Politics | Hutton unveils benefits shake-up". BBC News. 2006-01-24. Retrieved 2015-08-30.
- Editorial. "Editorial: The benefits of welfare reform outweigh the risks | Comment is free". The Guardian. Retrieved 2015-08-30.
- "Welfare savings and incapacity benefits". niesr.ac.uk. Retrieved 13 September 2015.
- "Executive Summary: Welfare trends report 2015" (PDF). Office for Budget Responsibility. Retrieved 16 November 2015.