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LEEDS 20 th Oct 2012

This article discusses the recent performance of the UK welfare system, the model of welfare to work in the UK, the impact of Employment and Support Allowance (ESA) and the Work Capability Assessment (WCA) on disability and employment, and future directions.

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LEEDS 20 th Oct 2012

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  1. LEEDS20th Oct 2012 Disability, Employment and Welfare Reform

  2. Disability Aim is to • Describe the recent performance of UK welfare system • Discuss the model of welfare to work for UK • Discuss disability and employment and impact of ESA and WCA • Discuss future directions

  3. Performance of the Welfare System • Pre-recession period saw the slowest rise in welfare spending since WWII as falling roles funded increased generosity • UK has low welfare reliance among working age compared to other countries – lower than US apart from maternity benefits! • Steady decline in welfare reliance in UK – pre-recession and very small rise during recession (compared to previous ones) • However, ageing population creates a large fiscal challenge and more employment helps

  4. Welfare Spending – Out of Control?

  5. Proportion of Working Age Population Reliant on Welfare Benefits OECD 2004 5

  6. Welfare reliance • Over the business cycle welfare reliance decreased Source: Gregg Review 2009 - updated

  7. Disability Welfare Roles • Disability welfare roles for those out of work rose sharply fell from 1979 to 1995 • Rise reflected- • Increased survival of seriously ill/closure of large institutions/ growing awareness of mental health • Hidden unemployment – claimant/gmt • Hardening of employer attitudes to employing those with impairments affecting work

  8. Disability Welfare Roles • Disability related welfare has a cyclical inflow with persistence relative to unemployment • exit rates not noticeably cyclical • 1/3 of new claims still live after 2 years, 1/5 by 5 years • Long durations mean it takes 15+ years for full effects to be visible • Disability welfare roles fell slowly during the recovery – due to continued hangover from early 1990s and before

  9. Recession and the Cycle of new claims - currently stable at 270,000

  10. Rising numbers of Long-duration claims

  11. Incapacity to ESA • Two Clear Strategies • Reduce eligibility - WCA testing to reduce inflow - re-testing of existing stock - limit contributory ESA for WRAG group ESA has been running for 3 years for new claims – overlap with recession – inflows up and claim survival has fallen by 10% at 6 moths Net effect very small so far – but will remove 0.5m – through re-testing and time limits

  12. Welfare reliance • Over the business cycle welfare reliance decreased Source: Gregg Review 2009 - updated

  13. WCA • WCA test is being implemented in an iterative process – change the rules - out cry - change the rules…… - inappropriate for vulnerable groups • No tracking of claimants leaving disability benefits means we don’t know what is happening to those losing access – potential for worsening health conditions, acute deprivation etc • WCA test creating huge resentment among claimants and risks undermining WRAG process – appeals resulting in low flows into WP, likelihood of less positive engagement with providers

  14. Incapacity to ESA 2. New engagement model designed to deliver services, support to disabled people on benefits to move them into work on their terms – with generous financial incentives for providers. Participants who agree to next steps would be required to follow them through • Expected to take 2 years but for some it could be up to 5. • Disqualified, especially the contributory group will not be supported into work

  15. Work Ready Group Work Programme Fast track Supported Jobsearch 6 – 9 months Directed Jobsearch 3-6 months Destination based on Client Group Self-help 0-3 months Work Work Related Activity Group WFIs Action Plans Work Related Activity Time to Jobsearch is variable No Conditionality Group Full Support

  16. Alternative Thinking Focus on employment Retention with existing employer • Treat like Maternity leave – Right to return (1 to 2 years), right to request part-time work and other flexibilities/workplace support (also managed reirement) • Incentivise/require employers to deliver rehabilitation in sick leave period (say after 3 months) • Financial penalties for redundancy when on sick leave – rewards for returning staff

  17. Alternative Thinking Return to Work • Increase financial rewards under Work Programme and design in incentives against parking • Appeal to CSR to build long-term relationships between WtW providers and employers • Multi-agency work around those with multiple needs – ACE pilots disappointing

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