Employment Support Allowance changes' impact questioned

03 April 2017

As the changes to Employment Support Allowance that will reduce the amount paid to new claimants in the "Work Related Activity Group" £29 a week take effect today, the Committee is publishing the Government's response to its inquiry on the Disability employment gap.

The Government has stated it aims to halve the disability employment gap - the difference between employment rates of disabled and non-disabled people: although it has not committed to any timeline for reaching this target

  • At current employment levels, this would require an extra 1.2 to 1.5 million disabled people to move into work
  • The Committee heard one estimate - from the Learning and Working Institute - that on current rates of progress, halving the gap would take over 200 years

Lower ESA enhances incentives to work

Under the reforms coming in today new claimants deemed unfit for work will receive £73.10 per week, the same as Jobseekers Allowance (JSA), and £29.05 less than is currently the case. The Committee warned that the evidence supporting the idea that introducing a new, lower rate of Employment and Support Allowance will enhance incentives to work is "ambiguous at best". Where new ESA claimants have unavoidably higher living costs related to their conditions, the change may leave them with lower disposable incomes than JSA claimants. The Committee called on Government to delay introducing the new lower rate until alternative support measures were put in place.

Committee comment

Heidi Allen MP, Member of the Committee, said:

"Whilst I am in no doubt of the Minister's appreciation of the extra costs faced by people with long term health conditions and that she has sought to find compensatory measures for the removal of ESA WRAG, I fear the package of support still falls short.

Although additional employment support has been provided for claimants plus a further £15m for the Flexible Support Fund (which is discretionary AND has many other demands, it is not an exclusive fund for ESA WRAG claimants), these measures will not compensate for the financial costs incurred by claimants.

Both in evidence to the Committee and in the Commons, repeated assurances were given that claimants would not be financially disadvantaged. I cannot say, hand on heart that this will be the case and worry about the hardship new claimants may face."

Further information

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