This week I am focusing on the introduction of a new social security benefit which will have some long-term implications for the world of work.
Earlier in the year, the Government published its third Green Paper in four years on welfare reform entitled ‘No one written off: reforming welfare to reward responsibility’.
The Green Paper sets out a range of options which will make major changes to the benefits system in a bid to get people off benefits and into work.
The goals of the Green Paper are to reduce the number of Incapacity Benefit claimants by one million, help 300,000 lone parents and one million older workers into work.
The paper makes it clear that there will be “no right to a life on benefits” for anyone capable of working.
A key element of the Green Paper is to abolish incapacity benefit and income support. These benefits will be replaced by a simplified system of two benefits — Employment Support Allowance (ESA) which will be regarded as a temporary benefit for all but the most disabled people and Jobseekers’ Allowance (JSA) for those who are fit to work.
ESA is paid to a person with limited capability for work because of ill health or disability. For the first 196 days of sickness, most employed people will receive Statutory Sick Pay.
After this a person will move on to ESA if they remain incapable of work.
ESA will replace Incapacity Benefit for new claimants from today. Existing Incapacity Benefit claimants will be moved onto ESA between 2009 and 2013.
Only the most severely disabled people or those with full-time caring responsibilities are likely to be able to remain on ESA long-term and would not be required to look for work.
Everyone else will be expected to take active steps towards employment and to take suitable jobs.
Once a person has claimed ESA they will receive it initially for up to 13 weeks. During this time a work capability assessment will be carried out to determine what should happen to a person’s claim after the initial 13 weeks.
The assessment will determine whether a person joins the support group (those who pass the medical test and are identified as not able to take part in any form of work-related activity) or the work-related activity group (those people who pass the medical test and are identified as capable of taking part in some form of work-related activity).
Those in the work-related activity group will be expected to engage with a personalised programme of back-to-work support in order to continue receiving the full rate of ESA. If they fail to do this their benefit may be sanctioned.
This more personalised support will be provided through the Pathways to Work initiative. This is an employment initiative designed to help people with health conditions or disabilities move closer to employment.
As part of this initiative a person claiming Incapacity Benefit (ESA from today) or income support on the grounds of incapacity may be entitled to a return-to-work credit of £40 per week for up to 52 weeks.
This is paid if a claimant takes a job of at least 16 hours a week which is expected to last for at least five weeks with earnings of less than £15,000 a year.
Further information on welfare reform and ESA is available from your local CAB.
Siobhan Harding is an Information and Policy Officer with Citizens Advice