Autumn Statement 2023: Support versus sanctions – how can we best help people into work?

The third instalment of our Autumn Statement 2023 analysis looks at employment support for people living with disabilities and health conditions. We question the risks associated with changes to the Work Capability Assessment that place people with disabilities in job search categories that could make them subject to benefit sanctions and terminated claims.

With more than 95% of benefit sanctions issued due to missed interviews this blog explores what these changes mean, and how they could place over 380,000 households at risk of losing £390 a month.

Although there is additional support for people the definition of disability within means-tested benefits is changing. Numbers from the Office for Budget Responsibility (OBR) show that around 380,000 people stand to lose out if they are unable to find suitable work, showing the potential effect this can have on vulnerable people and their income.

New policy changes announced in the Autumn Statement 2023 mean that people risk being impacted by work coach discretion within sanctions when the changes come into effect in April 2025.

£2.5 billion to support people with health conditions and disabilities into work

Universal Credit was originally created with a sister element, Universal Support, that was designed to help people back into work by identifying and tackling barriers to work and providing wider support.

Ten years since its introduction the migration of all benefit claimants to Universal Credit is ramping up. The government’s efforts to increase employment for longer term unemployed people through Universal Support now feature in its Back to Work plan.

Accompanying the Back to Work plan, three new measures to tackle unemployment were introduced in the Autumn Statement:

1. The Restart Scheme, designed to tailor employment support to local labour markets, was extended by a further two years, with eligibility brought forward by three months to those reaching six months of unemployment
2. A further 100,000 places will be available in the Individual Placement and Support programme offering personalised employment support to those with severe mental illness
3. Universal Support is being doubled, and is now aiming to benefit up to 100,000 people a year with specialist employment support

In addition to Autumn Statement 2023 updates further announcements of support available include:

1. An expansion of access to talking therapies through the NHS that can help support those with mental health conditions
2. New ‘WorkWell’ pilots that will fund partners in up to 14 areas to develop an integrated employment and health strategy to deliver an integrated work and health service

Economic inactivity has risen to 21.1%, an increase from pre-pandemic levels, and the costs of means-tested benefits related to health have also grown. The rise in the economically inactive population and the corresponding increase in the number of people receiving health elements of means-tested benefits has meant that the government is seeking to both reduce spending on welfare related to health and support those who are out of work, into work.

The OBR forecasts that welfare spending on disability benefits will increase with a further £2.1 billion spent on disability benefits by 2027-28.

The Spring Budget of 2023 set out to break down barriers such as childcare whilst increasing conditionality.

The Autumn Statement continues this approach by seeking to reduce the number of people eligible to be placed in the Limited Capability for Work Related Activity (LCWRA) group and therefore considered unable to work now or in the future and, secondly, by further supporting people in the lower Limited Capability for Work (LCW) group to help them get back into work.

Much of the success of these plans relies on the availability of jobs that will suit people living with long term health conditions and disabilities. The government must not place undue pressure on people to take on jobs that are not suitable for them.

Placing people with health conditions and disabilities in the wrong work conditionality group increases the risk that they will be subject to sanctions through failure to meet their claimant commitments when looking for suitable work.

That said, the government’s funding support to help break down barriers to work is a positive step. Trust between the claimant and work coaches will be vital to ensure people’s circumstances are fully understood and they are supported to find long term sustainable and suitable employment that is right for them.

Redefining disability in the Work Capability Assessment

People with a health condition or disability that impacts their ability to work, or look for work, can claim a health element within Universal Credit (UC) or Employment and Support Allowance (ESA). To do this, they must complete a Work Capability Assessment (WCA) where they will be assessed against a set of descriptors. To receive the health element of UC or ESA people must get a certain number of points when assessed against these descriptor activities.

The changes announced in the Autumn Statement 2023 that come into effect in 2025 will:

1. Remove the mobilising activity descriptor from access to the Limited Capability for Work and Work Related Activity (LCWRA) group. This means that people who are not able to walk for 50 metres unaided will now no longer be placed in the LCWRA group
2. Reduce the number of points a person can get from the ‘getting around’ descriptor for Limited Capability for Work (LCW). This means that the points someone can get for not being able to get around due to disorientation or other reasons without support will be reduced
3. Amend access to the LCWRA group through the discretionary view that not getting LCWRA will put the person or others at substantial risk. This means that whilst previously someone could be placed in the LCWRA group if the assessor thought they would be a risk to themselves or others if they weren’t, this will now only be allowed in specific circumstances. Around 15% of people currently in the LCWRA group of Universal Credit are eligible for this as the DWP thinks that there would be a substantial risk to themselves or others if they were not placed in this category.

Government spending on the health element of working benefits has increased in previous years and is set for a further increase of 35% to 2027-28 with the proportion of people placed in the LCWRA rising since 2021, as shown in the graph below.

Results of WCA assessments since April 2019, Policy in Practice analysis of DWP Statistics, stat-xplore November 2023

More than 380,000 people risk losing £390 a month

Universal Credit was designed to be delivered alongside Universal Support. The government expects that over 25,000 households out of work with long term sickness and disabilities who face barriers to employment, will be helped by Universal Support.

In response to the government’s changes, the OBR forecasts that 391,000 people will leave the LCWRA group by 2028-29. However, it only expects 10,000 people to do so by entering employment, falling 15,000 short of government estimates, leaving 381,000 people at risk of losing £390 a month through no longer being in the LCWRA group.

In a positive move, the Autumn Statement gives further support to people to help reduce barriers to work and recalibrates how people with health conditions and disabilities are treated as either able to work completely, or not at all by the benefit system.

The success of this policy change will depend on how understanding the benefit system is towards people with health conditions who look to get back into work but face barriers. The policy changes allow for more discretion and subjectivity from work coaches and, while more discretion allows for more flexibility, this also carries the risk of questionable decisions and an increase in appeals caseloads.

Hybrid jobs may be inaccessible to people with disabilities

Finding suitable employment matters more when working and living with an illness or disability. Barriers to work can include needing shorter working hours, being less able to apply for physically demanding jobs, being able to manage appointments and other needs relating to living with a long term illness or disability.

The rise of hybrid working patterns has brought the flexibility to work from home for many people and should, in theory, give more opportunity to people who might previously have been unable to find work to fit their needs.

Yet, people with disabilities are not currently working from home at a higher rate than those without disabilities. Jobs available to low income households with disabilities may not allow for home working or may not be appropriate for people without additional training.

Adjustments for people with mobility issues mustn’t push vulnerable people and those most at risk into hardship and worsen their conditions by placing them in work search groups they are not suitable for. Universal Support and other employment schemes have a critical role to play by providing the right training and support to help people find a job that they can do, but this must be within their ability and condition.

Sanction rates have more than doubled since 2019

People who claim Universal Credit or other working benefits must agree to a ‘claimant commitment’ of activities they will undertake to receive benefit payments. Typically this can be looking for work for a certain number of hours a week or attending interviews at a local JobCentre.

Failure to meet these commitments risks a sanction on the main standard allowance of their claim, reducing or eliminating payments for a time-limited period ranging from seven to 191 days, with over 95% of sanctions being issued due to failure to attend an interview with the DWP.

Sanctions were paused during the peak of the Covid-19 pandemic, however since then, sanction rates have more than doubled to from 3% to 6.8% in October 2022 before levelling out.

Crucially, groups that used to be protected from conditionality, such as those in the LCWRA group, will soon risk being sanctioned by the new Back to Work Plan. With almost all sanctions resulting from missed or late attendance to a mandatory interview, people with health conditions who face mobility, transportation, or mental health barriers risk being impacted to a greater degree than other groups due to the fast changing nature of their availability.

Sanction rates in eligible UC population since April 2019

The Back to Work Plan includes claim termination, the most severe outcome within the sanctions rulebook, allowing benefit claims to be terminated more easily. People who are in the full intensive work search group who don’t find a job in 12 months will be required to attend a mandatory interview where they will have to amend their conditions or have a mandatory work placement. If claimants are unable to complete these new activities within the following six months, they may have their claims terminated.

Once again, being in the correct work related activity group matters. Reducing the allocation of points available to people with some disabilities and health conditions in the Work Capability Assessment risks placing them in categories with higher levels of claimant commitment, commitments they may fail to meet as a result of life-limiting conditions. The potential for sanctions to reduce benefit levels, or for claims to be terminated entirely, places already vulnerable claimants into a potentially worse situation.

Policy in Practice’s Low Income Family Tracker (LIFT) data analytics platform enables local authorities to see the impact that welfare reforms and changes have on their residents, and see which individual households will be affected. Using LIFT local authorities can see which residents will be impacted by these policies and act to ensure that they are supported through these changes.

Similarly, our Better Off Calculator also allows organisations and people to see if there is any other support they may be eligible for to help them through these changes.

Next steps

• Read Autumn Statement 2023: A step forward after many steps back
• Read Autumn Statement 2023: Uprating benefits – the long view
• Join our free webinar Policy review of 2023 and what 2024 may hold on Wednesday 6 December. Register here