Monday, 30 January 2012

The 'logic' of reducing benefits for disabled children.

Tomorrow (January 31st 2012) Crossbenchers in the House of Lords are to try one more time to amend the Welfare Reform Bill to prevent a reduction in the amount of money paid to disabled children.  Last time, the amendment was lost by only two votes.

At the moment, children in receipt of Disability Living Allowance, whose parents earn a low income or are out of work, receive a ‘disability addition’ worth £53.62 p.w.  Children in receipt of higher rate DLA receive an additional £21 p.w. on top of this.  Under the new Universal Credit system, the government proposes that children in receipt of the higher rate DLA will receive a total disability addition of £77 while children in receipt of medium and lower rates of DLA will only receive £26.75.   

About 100,000 disabled children will be affected by this reduction in the amount of money paid as a contribution towards the additional costs they and their families face associated with impairment and disability.

The government’s stated reason for reducing the amount of money available for disabled children within the Universal Credit system is that this is necessary to bring rates in line with what is available once children reach adulthood.  

Defending the policy in the House of Lords, David Freud argued that the more generous benefit rates available to disabled children meant that “the drop in income from childhood to adulthood can cause financial difficulties for young disabled adults”.  He therefore justified reducing the amount of money available to children because it would “smooth the transition from childhood to adulthood by removing that artificial divide”.  In other words, disabled children should get used to living in poverty in childhood as that is what awaits them as they move into adulthood.

This means that the progress that the Labour government made in tackling poverty amongst families with disabled children is to be sacrificed to the downward pressure on benefit rates for adults.

A key factor in this downward pressure on benefit rates, and determining the design of Universal Credit, relates to the Poor Law principle of ‘less eligibility’.  This refers to the perceived need to ensure that it is not possible for households or individuals to be better off out of work than in work.  The children who are on the lower or middle rate of DLA are assumed to pass, in adulthood, into the Work-Related Activity Group of Employment and Support Allowance, where a key determinant of benefit levels is that they should not be set so ‘high’ as to create a disincentive to work.

But in a low waged economy, with ever-increasing global pressures driving wages down even further, this principle is hard to maintain.  Ian Duncan Smith’s intention that the new Universal Credit system will ‘always make it pay to work’ is in conflict with two other aims: that our benefit system should provide enough of a safety net to prevent destitution; and that families with children, and/or with a family member who is disabled, incur additional costs which should be allowed for in the assumptions made about at what level this safety net should be set.

If our economy does not sustain jobs which pay a living wage, it is inevitable that the principle of ‘less eligibility’ will mean a benefit system which fails to provide households – particularly those which incur additional costs relating to disability – with enough of an income to prevent destitution.

Another of the government’s justifications for changes to the ‘disability addition’ for disabled children is that it is targeting help to those who are most ‘severely disabled’.  This is part and parcel of the residualisation of the welfare state – the process by which it is becoming something that only those in the greatest need can look to receive help from.  This is not a social security system on which we can all rely at times of misfortune and need, something in which therefore we all have stake.  Instead it is a benefit system which – like social housing has become – is only available to the most marginalised of social groups.

The focus on the ‘most severely disabled’ children is also part and parcel of the narrative which currently dominates public debate on adult disability benefits: namely that there are large numbers of people receiving such benefits who aren’t ‘really disabled’. Similarly, by reducing the amount of support available to disabled children on lower rates of DLA the government is implicitly saying that the families of these children do not incur sufficient additional costs to justify their current levels of benefits.

Yet these are families already at significant risk of poverty: 4 in 10 disabled children live in poverty – a total of 320,000.  Half of these live in households with a disabled adult and of these 50% live in poverty.   

These poverty rates will inevitably increase significantly, and are unavoidable as long as we have a residualised benefit system, governed by Poor Law principles in the context of an economy which cannot sustain full employment and a living wage.