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How is PIP expenditure high, when disabled people are struggling?

The Office for Budget Responsibility has recently reported that spending on PIP, the Tory’s new extra-costs disability, was 20% higher than was expected if the previous benefit had been retained, instead of 20% lower as was the government’s desire.

The OBR had a number of reasons for this. One was the lack of data to support the government’s stated desire that PIP would reduce spending by 20%. The biggest reason is probably simply that there is a much higher volume of claims than expected, which naturally results in more people then receiving benefit. It is possible that the publicity around the new benefit meant more people became aware of the existence of extra-costs benefits generally. PIP was heralded as improving support for people with mental illness, so there may be more people with mental illness applying for it because they thought there was now a chance of getting support that they wouldn’t have received under DLA. More generally, people who thought that they did not fit the criteria for DLA may have decided that it was worth trying for PIP as the criteria were different – according to the government, they were fairer and more objective. Another reason, not raised by the OBR, might be that as disabled people are increasingly struggling to get the support they need through ESA/UC and social care, more people are finding that they can no longer get by on just that support, and so now feel forced to apply for PIP financial reasons.

It is important to bear in mind that the appeals data messes up the spending figures. People who have recently won an appeal get their money backdated to the assessment date, but for the purpose of government figures the spending only shows up in the month that the appeal was won. As PIP is still quite young, the result is that early on it will have looked cheap (because people who should have got PIP weren’t being paid) and later on the spending jumps up as backdated PIP payments go through. This may continue for a while, as it takes a long time for new benefits to bed in and reach a stable caseload, particularly for benefits designed for people with long-term needs.

The higher claim volume makes PIP more expensive than anticipated, whilst the impact of accounting for backdated payments only in the appeal month, rather than spread over the months between assessment and appeal, artificially inflates costs in later months compared to earlier ones. These are both important reasons why the spend on PIP is higher, and mean that the actual gap between government expectations (which included lower claim volumes and payments spread evenly over the qualifying period) and reality is not as big as it first appears.

Having said that, I think that there is a major underlying problem for the government: they don’t understand disability. They have grossly underestimated the severity of the functional impact of chronic illness and disability, and consequently expect fewer people to need extra-costs support than is the case. They falsely believe that disability often reduces over time, and consequently expected that frequent reviews would result in many people coming off disability benefits. They wrongly think that disability is largely a simple matter to determine, and therefore didn’t think that people who were refused benefit initially would be likely to win at appeal.

The hypothetical examples they created to justify reducing the points given to someone who needs aids and appliances shows how simple and moderate they think disability is. In reality, their examples would have had widespread disability causing substantial limitations and extra costs. Exactly how and where those costs would fall is not possible to precisely determine: people with chronic illness may choose to wash but not walk; to use a toilet without assistance but not cook; to manage their finances but not plan a journey. And then there is the question of suffering: how much pain, exhaustion or panic must a person endure before they can be deemed unable to carry out an activity causing those symptoms? Does it matter whether the person otherwise enjoys that activity or not? If someone is willing to exhaust themselves meeting up with people socially, rendering them housebound for a week, can we act as though it is not a problem for them? Beyond the obvious cases that fully blind people can’t read, fully deaf people can’t hear and paralysed people can’t walk, trying to determine a disabled person’s exact functional ability is highly subjective. It requires high professional expertise and is rendered inconsistent by attempts to force it into tick-boxes.

The consequence of all this is that from the government’s perspective PIP award rates are ‘high’. They simply didn’t realise how many people are severely disabled and how long that disability persists, so they underestimated how many people would be in receipt of PIP. But from disabled people’s perspectives, PIP award rates are too low. PIP does not capture the extent of our disability, particularly for mobility problems, domestic tasks, and remaining safe and as healthy as possible. And because assessors have to force people into boxes that are largely irrelevant to the actual problem and its solution (if any), awards are highly inconsistent. This creates added distress for people who never know how many stages they will need to go through to get the benefit they need – they could get an award on paper, at face-to-face assessment, at reconsideration, at their first First-Tier Tribunal or at either Upper Tribunal or a second first-Tier Tribunal after the Upper tier sends it back for a new decision. They could get a high award in one year, and the next get nothing. The activities on which they get points and the reasons that they get points varies from assessor to assessor.

We’re left in a situation where we have a terrible benefit that the government thinks is too generous. This mismatch between what disabled people experience (they need more help; PIP is harsh and inconsistent) and what the government think (PIP has turned out to be too generous) shows how vast is the gulf between government thinking and reality.

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