Revamp of incapacity benefit system to encourage return to work

The biggest change in incapacity benefit since it was introduced was unveiled today by work and pensions secretary Alan Johnson.

The Government said the proposals recognise that nine out of 10 people who qualify for incapacity benefit want to work again, and provides the help and support to enable them to do so.

The new proposals will be piloted and consulted on with all key stakeholders including disabled people. The Government said that key elements will be in place for new claimants by 2008.

Alan Johnson said the reforms should mean that sickness benefit represents a pause in people’s working life, not a full stop.

“We know that a million people on incapacity benefits want to work. So we must end the stifling of ambition caused by a system, which for too long has assumed that all people with health conditions and disabilities are condemned not to work and instead live in isolation as passive recipients of benefits,” he said.

The key elements of the proposals:

  • The name ‘incapacity benefit’ will be scrapped so that people are not immediately classed as incapable.

  • Initially, people will be put on a holding benefit, paid at jobseekers allowance rates, accessing the new reformed benefits only once they have been through a proper medical assessment. This will take place within 12 weeks, and be accompanied by a new employment and support assessment.

  • Two new benefits ‘rehabilitation support allowance’ and ‘disability and sickness allowance’ will differentiate between those who have a severe problem and those with potentially manageable conditions.

  • The majority, who have more manageable conditions, will receive the rehabilitation support allowance. It will offer everyone a basic benefit at jobseekers allowance levels (about £55 a week), but then ensure that they can build up to get more than today’s long-term Incapacity Benefit by giving them extra money, first for attending work-focused Interviews, and then for taking steps to get them back towards the labour market.

  • Those with the most severe conditions will automatically receive more money than now on the ‘disability and sickness allowance’. They will be able to volunteer to take up employment support.

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