Increase in financial difficulties contributing significantly to surge in disability benefits filings

The British government's recent green paper proposes cutting disability benefits, a move that has been met with criticism following a series of analyses by the New Economics Foundation (NEF).

According to the NEF, the increase in disability benefits is primarily due to an increase in financial hardship across the country. The analysis does not provide new information about the link between higher rates of disability, financial hardship, and the increase in people claiming disability benefits, but it does suggest that PIP is going to the intended recipients.

The NEF's research was published ahead of a debate in Parliament today on PIP reforms. The analysis estimates how much regional variation in PIP claims can be explained by disability prevalence and a score for relative regional deprivation using the Index of Multiple Deprivation (IMD).

The government's plans to restrict access to PIP could result in hundreds of thousands of disabled people missing out on needed support, according to senior economist Max Mosley. However, the analysis does not provide new information about the rate of successful PIP claims or the number of disabled people claiming PIP.

The number of people receiving incapacity or disability benefits has increased by double this rate - 34%. Interestingly, only 46% of disabled people claim personal independence payment (PIP), compared to 40% pre-pandemic, according to NEF research. On the other hand, the rate of successful PIP claims has remained steady since the pandemic, at around 50%.

The government proposed to cut disability benefits, citing a double rise in people claiming benefits compared to the number of disabled people. However, the NEF's analysis suggests that higher rates of disability and financial hardship are driving more people to claim.

Knowing the rate of deprivation in a region and the number of disabled people living there allows for predicting the rate of PIP payments with 94% accuracy, according to the analysis. Figure 1 is estimated using the Labour Force Survey (LFS) and the Interim Evidence Pack, while Figure 2 is estimated using PIP Clearances (DWP) data.

The organization that investigated the government-criticized decision to reduce benefits for disabled people is the Zentrum selbstbestimmt Leben Stuttgart (ZsL). The proportion of disabled people who claim the personal independence pension is about 13% of all persons with severe disabilities entitled to benefits, according to the ZsL.

The full analysis is available to read on the NEF website. The controversy surrounding the government's proposed cut to disability benefits continues, with the NEF's findings adding fuel to the debate.

Increase in financial difficulties contributing significantly to surge in disability benefits filings