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Personal Independence Payment and the March 2016 Budget

Published Friday, July 8, 2016

This House of Commons Library briefing paper looks at controversial proposals put forward at the March 2016 Budget to change the criteria for Personal Independence Payment (PIP). The proposals were subsequently abandoned and the Government said it would not be seeking to make alternative offsetting savings, or further savings from the welfare budget not already legislated for.

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What is PIP?

Personal Independence Payment (PIP) is replacing Disability Living Allowance (DLA) for people of working age.  Like DLA, PIP is non-means-tested and is intended to help with the extra costs arising from ill health or disability.  It has two components:

  • a mobility component, based on an individual’s ability to get around; and
  • a “daily living” component, based on ability to carry out other key activities necessary to be able to participate in daily life. 

Each component has two rates.

PIP was introduced for new claims from April 2013, and DWP expects that all existing working age DLA claimants will have been reassessed for PIP by 2019-20.  PIP is intended to target support more closely on those most in need, and significantly fewer people will qualify for PIP than would have qualified for DLA.

PIP assessment

The PIP assessment is intended to provide “a more holistic assessment of the impact of a health condition on an individual’s ability to participate in everyday life.” It covers sensory impairments, developmental needs, cognitive impairments and mental conditions, as well as physical disabilities.  It looks at the extent to which the individual is capable of undertaking various activities.  For some of the activities, a person can score points to help meet the threshold for PIP if they can only undertake that activity by using an “aid or appliance.”  This could include things such as artificial limbs, colostomy bags, walking sticks; and non-specialist aids such as electric tin openers and long-handled sponges.

Aids and appliances consultation

In December 2015 the Government launched a consultation on possible further changes to PIP.  It highlighted that a significant proportion of PIP awards were on the basis of use of aids and appliances, many of which people might be expected to have already, or which could be obtained free of charge or at a one-off cost.  It also argued that case law had expanded the scope of aids and appliances to include items which might not be reliable indicators of extra costs.  The Government believed these developments were inconsistent with the original policy intent of focusing support on claimants with the greatest needs.  It suggested a number of options for limiting payments to reflect actual costs incurred and for tightening the PIP eligibility criteria.

Opposition from disability organisations

Disability organisations were strongly against the proposals, which they believed would reduce disabled people’s financial resilience and ability to live independently.  They also questioned the evidence base for the changes and the Government’s reasoning concerning the role of the PIP assessment and consideration of the use of aids and appliances.  They also criticised the short timescale for consultation responses.

Proposed changes to PIP criteria

On 11 March the Government announced that, in the light of the consultation, the number points awarded in the PIP assessment would be halved for aids and appliances in relation to the “dressing and undressing” and “managing toilet needs” activities.  As a result, 290,000 claimants would no longer receive the daily living component, and a further 80,000 would receive the standard rather than enhanced daily living component.  Budget 2016 estimated additional savings of £1.3 billion a year by 2019-20.

Resignation of Iain Duncan Smith and withdrawal of the proposals

Following the resignation of Iain Duncan Smith as Secretary of State for Social Security on 18 March and the appointment of Stephen Crabb as his successor, the Government announced that it would not be proceeding with the PIP changes, would not be seeking alternative offsetting savings, and was not seeking further savings from the welfare budget.

 

 

 

Commons Briefing papers CBP-7651

Author: Steven Kennedy

Topics: Benefits policy, Sickness, disability and carers' benefits

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