Inclusion Scotland

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Thursday, 10 May 2012

Disability living allowance (DLA) reform will cost £710m but will reduce benefit expenditure by £2.24bn, according to the DWP.

In a new impact assessment, 'Disability Living Allowance Reform', the DWP says that the policy objectives for the replacement of DLA by the personal independence payment (PIP), from April 2013 onwards, are -

to create a new, more active and enabling benefit that focuses support on those disabled people who face the greatest barriers to leading full, active and independent lives;

to ensure that expenditure is sustainable;

and to assess more accurately, objectively and transparently those people who would benefit most from additional support.

The DWP goes on to say that its 'best estimate' of the implementation costs arising from the introduction of PIP is currently £710m, and that these costs include provision for making changes to IT systems, training DWP staff, the administrative effort required to manage the transition of existing recipients to the new system, and the cost of trained independent assessors undertaking the assessment.

However, the DWP says that there will be net costs to individuals from reductions in benefit expenditure - as a result of 'focusing support on those with greatest needs' - of £2.24bn (or 20% of forecast working age DLA expenditure) by 2015/2016, with an equivalent saving to the exchequer.

In addition, the DWP confirms that, by 2015/2016, the estimated caseload for PIP is around 1.7m, as compared to a previously forecast estimate of DLA working age caseload of around 2.2m.

NB - the DWP has also today published an equality impact assessment on DLA reform setting out its views on the impact of the policy including, in relation to disabled people, that -

'The new benefit will be fairer, and may help to improve understanding that support is available both in and out of work. More regular reviews and a more objective, rather than self, assessment may mean reduced support for some people who have lesser or reduced barriers to participation. This is entirely consistent with the policy but it is possible that this group are more likely to be adversely affected.'

The DWP impact assessment and equality impact assessment on DLA reform are available from the DWP website.