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. It was introduced in October 2008 for new claimants to replace three benefits: Incapacity Benefit; Income Support paid because of an illness or disability; and Severe Disablement Allowance.
Most of the people who had been put on Incapacity Benefit or disability-related Income Support before ESA was introduced lost their entitlement to out-of-work sickness benefits at some point between 2011 and 2014; they were then assessed again to see whether they qualified for ESA instead (the expectation within Westminster and Whitehall was that many would not). Of the Coalition Government's controversial package of welfare reforms, this was the policy that had the greatest potential impact on claimants and the best prospect of generating substantial savings for the public purse.
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 official figures - based mainly on the outcomes of new claims rather than reassessments - show that after their assessment, 62% of people now receive the highest level of benefit; another 13% are found unfit for work but deemed able to take part in 'work-related activity'; and 25% are found to be fit for work and therefore ineligible for ESA. Outcomes after reassessments are now even more favourable from a claimant's point of view.
Despite the changes in welfare policy made over the last decade - particularly those made since 2011 - the total number of people on out-of-work sickness benefits has remained much the same: about 2.5 million (more than three times the number of unemployed people receiving Jobseekers Allowance) and not one penny has been saved from the £14billion 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 786,000 people - and Income Support, given nowadays mainly to 448,000 lone parents and carers.
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 fewer than 90,000 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. During this time - normally within 13 weeks - a Work Capability Assessment will usually be carried out to determine whether the claimant is disabled enough to qualify for ESA. Each assessment costs the DWP about £170; 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 political 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 1-13 only, no
|(payable from week 14)|
|Work-related activity component *||———||£29.05|
|Support component *||———||£36.20|
(* 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.
When sickness benefits were first introduced (more than a century ago) they were seen as an income-replacement benefit of sorts - unlike unemployment benefit, which was and is a basic subsistence payment intended to tide the claimant over a short period of unemployment.
The number of people on sickness and incapacity benefits rose throughout the 1990s in the aftermath of the disappearance of manpower-intensive heavy industry in Britain. The first medical test for sickness benefit entitlement—beyond a GPs recommendation—was brought in by John Major's government in 1995. This new All Work Test was carried out by doctors employed by the government and it set out to assess a claimant's ability to cope with a range of occupations, not just their old trade, as happened before. Nevertheless, the caseload continued to increase.
In the first years of the 21st century, ESA was conceived. It was designed to shift people off benefits and back into work, reflecting policy ideas dating back to the first New Labour victory in 1997 and beyond. The process of parturition for ESA really began after the Labour general election victory in 2005, the most obvious outward 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 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 was passed that heralded the introduction of ESA for new claims the following year. In 2008, despite the sudden recession and the resulting downturn in the jobs market, radical reform remained the objective.
However, the caseload had already peaked in 2004 and since then the general trend has been steadily downwards. The likely reasons for this historic trend are:
- Demographic: the 'baby boomers' reached State Pension age
- Men with the old industrial diseases, caused by working in mines, shipyards and other hazardous environments had died
- Entry criteria became stricter
There was a brief increase in the number of incapacity benefits claimants during the recession of 2008 to 2009, then the decrease continued until 2013, when the caseload began to rise. As a consequence of this reversal of the long-term trend, the amount spent each year on out-of-work sickness benefits has gone up from £13 billion five years ago to £14 billion now. The bungled reassessment programme that began in 2011 is generally accepted to be the cause.
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