Disability and universal creditEvidence session Wednesday 11th July

Introduction

• Issues and scenarios– Child disability addition– No equiv of severe disability premium– No equiv of disability element of WTC if fit for work

• About the review – read more scenarios and complete survey at

http://www.citizensadvice.org.uk/universalcredit

Child Disability Additions

• Support for children with disabilities are to be substantially cut under Universal Credit, through replacement of the disability element of child tax credit with a “disability addition” for a child.

• The money is being moved into a substantial increase in the support component of ESA for disabled adults.

• Changes could cost parents of disabled children up to around £1400 per year.

• This could amount to substantially more than £22,000 over the childhood of a disabled child, (for a family with two disabled children this loss could be more than £44,000.)

• The Government estimates that 100,000 children could be affected by this change.

Child disability addition

They cant work

They can work without incurring childcare costs

Will be worse off if:

Parents of children who are not entitled to the highest rate of disability addition

They can only work with high childcare costs

Will be better off despite the cut if:

Households who are unable to work or can only work with high childcare costs will be worse off

Lone parent

unable to work

because of caring

responsibilities –

weekly loss of

about £30

Lone parent

unable to work

because of caring

responsibilities –

weekly loss of

about £30

Couple – one

earning about

£350 and other

caring – slightly

better off

Severe Disability Premium

• SDP gives additional support to disabled adults with no other adult to provide care for them. helps to cover the additional costs of living with a disability but no carer.

• The Government is abolishing the Severe Disability Premium through the introduction of the Universal Credit.

• This will cost families up to £58 per week (over £3000 per year). This cut could be equivalent to 20% of household income after housing costs.

• There is particular concern that disabled Lone Parents will lose this support so children will have to take on even greater caring responsibilities. Around 25,000 Lone Parents with disabled children receive the SDP.

No equivalent of severe disability premium –severely disabled adults who live on their own will be worse off

Severely disabled people in the support group:

if they live with a child but no other adult

if they live with another severely disabled adult

They live with a partner or have a carer (when savings allow)

They live with a partner who works

Will be worse off if:

They live on their own and don’t have a carer

Will be better off if:

Children who are carers – loss of £58 addition to basic amountAdults caring and working fulltime – gain of £33 to basic amount

Disabled lone parent

cared for by child –

disposable income

drops to £180 -

weekly loss of about

£60

Disabled lone parent

cared for by child –

disposable income

drops to £180 -

weekly loss of about

£60

Couple – one disabled

and cared for by

partner who is

working – disposable

income rises to £380 -

weekly gain of about

£55

Disability element of Working Tax Credit

• Currently, additional support for disabled adults who are in work is provided through the “disability element” of Working Tax Credit

• This support is currently worth an additional £54 per week and recognises additional costs of work for people with a disability

• 116,000 families with disability element WTC

• No additional help within Universal Credit for those with disabilities who are found fit for work.

No equivalent of disability element of WTC if fit for work

Disabled people who are found fit for work will get no extra help. This will include for example:

Someone who can self propel a wheelchair 50 metres

Someone who is able to do some work but not work fulltime because of fatigue caused by a condition such as MS

Disabled people found fit for work will get no more extra help than someone who is not disabled

Disabled person

found fit for work –

about £45 less per

week than current

system

Disabled person

found fit for work –

about £45 less per

week than current

system

Disabled person in

support group of

ESA but able to

work fulltime will

be better off