Decades of failure leaves half of disabled benefits claimants in poverty

Decades of reforms and political promises have failed to help disabled people, with 42% of all people in homes relying on disability benefits now in poverty, according to new analysis published today by The Social Market Foundation and Scope.

Disability benefits and support after coronavirus - Time to Think Again report

It calculated that almost half of all people in poverty are either disabled or live with someone who is disabled, using data provided by the Social Metrics Commission.

There are now 1.8 million more people in poverty living in a family that includes a disabled person compared with 15 years ago.

The report has sparked calls for urgent action over the immediate effect of the pandemic, with recent Scope research showing more than a quarter (28%) of disabled people said their finances have worsened during the pandemic.

The think-tank said the findings showed that repeated changes in disability policy have failed to provide either sufficient financial security for disabled people or help for those that can and want to work. The current system of support for disabled people is “broken”, it concluded.

The SMF report comes as ministers prepare a Disability and Health Green Paper and a wider cross-departmental national disability strategy. These initiatives provide Government with an opportunity to take much needed immediate action to support disabled people but should also commit to a wide-ranging rethink on disability support, the SMF said.

Despite repeated promises of reform and improvement by politicians of all parties, the number of people on a range of disability benefits is no lower than it was 2 decades ago. The cost of disability benefits has risen by almost half in the same period.

The SMF, a cross-party think-tank, worked with the disability equality charity Scope on the report, which finds that increasingly costly government support has failed to prevent disabled people and their families from falling into poverty.

The current system is producing outcomes that are both cruel and wasteful, the SMF said.

Focus group participants interviewed as part of the research said the benefits system was “insulting” and lacked “kindness and humanity”.

The disability employment gap remains above 40 percentage points for many disabled people. Over a million disabled people who are out of work say that they want to be in employment, the analysis shows.

The report estimates that had the government met the 2015 Conservative manifesto target of halving the disability employment gap, nearly 1 million more disabled people would be in work today, boosting Exchequer benefits by around £17 billion a year.

The real-terms cost to taxpayers of providing disability benefits has risen by almost 50% since 2000, costing an extra £16 billion. The SMF forecasts that spending on disability benefits will increase by another £4 billion up to 2024/25.

The report calls on the Government to urgently bring forward its Green Paper and cross-departmental national disability strategy with “reasonable expectations” of when and how reforms will be delivered. Disabled people’s views and experience must be at the heart of Government’s plans, underpinning future system reform. The report sets out a framework for reform which would better support disabled people into employment and ensure those that do need to rely on benefits can do so in a way which “delivers dignity, fairness and respect”.

Reforms could also aid the Government’s levelling-up agenda – with the most deprived areas likely to benefit the most from changes to the system – and boost UK output (GVA) by around £50 billion per year.

Matthew Oakley, Senior Researcher at the Social Market Foundation, said:

“The benefits system is broken for disabled people. It is unacceptable that more than 4 in 10 people (42%) living in families that rely on disability benefits are forced to live in poverty.

“Successive governments have repeatedly failed disabled people, their families and communities for decades. The pandemic has underlined this failure and had tragic consequences for disabled people’s lives. Now is the time to think again.

“Not only is failing policy damaging the lives of disabled people – it also means that the UK is missing out on everything that disabled people can bring to the economy and society. Reforms have wasted billions of pounds of taxpayer money and failure to support more disabled people to fulfil their working ambitions has deprived the economy of as much as £50 billion of output every year.

“The Government needs to use its long-awaited Green Paper and cross-departmental disability strategy to commit to change. What we need is a benefits system that ensures disabled people are lifted out of poverty and delivers support in a dignified, fair and respectful manner. Delivering this will require significant changes; but our work shows that the foundations of a new system of support for disabled people can and must be delivered within this Parliament.

James Taylor, Executive Director of Strategy, Impact and Social Change at disability equality charity Scope, said:

“Too many disabled people are in poverty and are being failed by our welfare system.

“The constant stress, uncertainty and distress it causes are symptoms of having to battle a system that should be there to support a decent standard of living, rather than one that penalises and treats disabled people unfairly.

“For a long time, too many disabled people have been trapped in poverty by a string of inflexible, bewildering and cruel rules and decisions that have focussed on trying to stop people claiming the very benefits that would help enable them to get out poverty in the first place. As a result, 1.5 million more disabled people are in poverty compared to 15 years ago.

“It doesn’t have to be this way. A welfare system should be there to provide support to disabled people in and out of work, to help offset the financial penalty of being disabled, and ultimately to improve lives.

“In the short term, we need urgent changes to make sure disabled people are getting the support they need. But the Government has a momentous opportunity with its forthcoming welfare green paper to set out a longer-term vision for how the welfare system can improve disabled people’s lives. If it simply tinkers at the edges, we will judge it to have failed.

“Scope and the SMF together cannot stress enough how important this moment is. The last year has seen thousands upon thousands of disabled people lose jobs, and many more are having to make impossible choices about how to make ends meet. We urge Government to challenge itself and put disabled people at the heart of its thinking into what a successful welfare system needs to look like, not now but in the long term.

“We hope it takes up that challenge.”