‘Ministers aren’t interested in evidence’: DWP sanctions are driving people to disability benefits

The government’s independent economic forecaster has said that the high number of sanctions imposed on unemployment benefit claimants by the Department for Work and Pensions (DWP) has helped drive the growing number of disability benefit claimants.

Since the height of the Covid pandemic, disability benefit claims have risen sharply, sparking alarm among ministers. The total number of people on working-age disability benefits has risen by a quarter since April 2019, with around five-sixths of them out of work.

Amid much speculation as to the causes of this rise, the Office for Budget Responsibility (OBR) included an analysis in its July report on fiscal risks and sustainability. As well as a continuation of a pre-pandemic slowdown in the rate of improving health, and the impact of the pandemic itself, the OBR highlighted the impact of sanctions in driving people to claim disability benefit.

The OBR report said there is “relatively little evidence” that changes in the relative generosity of different benefits had led to more health-related labour market inactivity by making disability benefits more attractive.

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But the report continued: “There is more evidence to support the idea that changes in conditionality and sanctions in non-health-related parts of the means-tested welfare system have contributed to rising health-related inactivity.”

After the sharp rise in unemployment benefit sanctions in the early 2010s, sanction rates gradually fell before the pandemic saw sanctioning suspended entirely. But since Covid restrictions were lifted, sanction rates for non-disabled unemployed benefit claimants have surged, while sanction rates among disability benefit claimants have stayed low.

“The expansion of conditionality and rising rates of sanctioning in the non-incapacity parts of the means-tested, working-age welfare system may have made applying for (largely unconditional and often-more-generous) incapacity benefits more attractive,” the OBR report said.

“It is also possible that cost of living concerns related to the pandemic and energy crisis – coming on top of a decade in which real incomes were squeezed by weak productivity growth and, for some people, real-terms cuts to benefits – may have incentivised claimants to seek out those parts of the system that are more generous and subject to less stringent conditionality (and therefore leave them less at risk of facing sanctions and loss of income).”

Dr David Webster of the University of Glasgow, an expert on the benefits sanctions system, found the reference to sanctions in the OBR’s July report. “The DWP and its predecessors have known for decades that tightening conditionality for unemployed people often drives them on to sickness benefits,” he told Big Issue. “This just shows once again that when it comes to sanctions, ministers just aren’t interested in evidence.”

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The OBR report noted academic studies showing that tightening benefits conditionality in once part of the welfare system can increase demand for unconditional disability benefits, such as the introduction of Jobseeker’s Allowance in 1996, which first set conditions for unemployed claimants.

While disability benefits have less onerous conditions attached to claiming them than non-disabled unemployment benefit, they are not easy to qualify for. The personal independence payment (PIP) – which is not specifically an out-of-work benefit – has a roughly 50 percent rejection rate among first-time applicants, with around 70 percent of subsequent tribunal appeals proving successful.

Eligibility for out-of-work disability benefits – previously the employment support allowance (ESA), now the disability element of universal credit – is determined via the work capability assessment (WCA), which was notorious for its high rejection rate for much of the 2010s but has seen a much higher success rate for applicants than PIP in recent years.

The government’s response has been to propose tightening the WCA eligibility criteria, making it harder for applicants to qualify for disability benefit and leaving more of them open to potential sanctions. Longer term, the government wants to scrap the WCA entirely and make the PIP assessment central to claiming all disability benefits – to the alarm of disabled people’s organisations.

There is little evidence that sanctions encourage people to find work. Earlier this year the DWP’s own research concluded that sanctions actually decreased the rate at which benefit claimants moved into higher paid work, while the rate at which they moved into any kind of paid work was “not greatly affected”.

A DWP spokesperson said: “We’re helping more people to get into work through the next generation of welfare reforms – inactivity has fallen by more than 200,000 since the pandemic peak and we’re investing an extra £2bn to support those with health conditions and disabilities to stay in work.

“Conditionality and sanctions are designed to encourage people to meet certain commitments, preparing them for workplace responsibilities and most claimants agree this makes them more likely to look for work. Our approach has been successful, seeing almost four million more people in work today than in 2010.”