Sainsbury Centre for Mental Health welcomes proposed changes in benefit rules for disabled people

20 March 2007

"The Government has taken a major step forward today in helping people with mental health problems to get back to work," the Sainsbury Centre for Mental Health (SCMH) said today.

Dr Bob Grove, director of the SCMH employment programme, welcomed the announcement by minister of state Jim Murphy MP that all claimants of the new Employment and Support Allowance (ESA) will be able to earn £86 a week for a year without losing their benefits.

Bob Grove said: "Under the current 'permitted work' rules, people on Incapacity Benefit (IB) who are also claiming means tested Income Support can only earn £20 a week before they start losing their benefits. This is a major disincentive for people trying to get into work.

"Enabling people to earn up to £86 will free them to try out work and to be rewarded for their efforts without taking the massive risk of losing their benefits. It removes the discriminatory rules that currently exist for people claiming both Incapacity Benefit and Income Support.

"Today's announcement shows that the Government is serious about wanting to help people back to work. We need, however, to be assured that this will apply to all ESA claimants, including those already on IB. It is also important that claimants who receive Housing Benefit and Council Tax Benefit do not have these clawed back. Unless these anomalies are also removed the system will continue to fail people who want to work."

Bob Grove added: "We also welcome the House of Lords' vote yesterday for an annual independent report on the impact of the new Personal Capability Assessment (PCA). The current test works poorly for many people with mental health problems. We hope the new test will work better and that the Government will accept the need for intensive monitoring during its first five years."

Notes

The Government yesterday announced plans to amend the Permitted Work rules as part of the Welfare Reform Bill, now in the House of Lords.

In the current system if you are claiming Incapacity Benefit and Income Support you get penalised £1 for £1 after earning over £20 per week. This discriminates between those people on contributory (non means tested) and those on income (means tested) related benefits. This week's announcement means that if you are on either the means tested or non-means tested ESA, you will be able to earn £86 per week for 52 weeks. It is not clear whether the supported permitted work rules and the permitted work exempt rules are also being carried over to both types of ESA.

However, there was no mention of the current links to earnings of Housing Benefit, Council Tax Benefit and the new Local Housing Allowance. If these are not also changed, it would mean that ESA claimants also on these benefits would lose out, so we encourage these Housing related benefits to be adjusted in line with the new ESA rules, so that people can earn £86 per week without being penalised with other benefits.

Finally, current claimants of IB and IS will still fall under the existing discriminatory rules until they move onto ESA, so again we encourage the new ESA rules to be made available for all claimants from the outset.