Welfare Reform and Work Bill

Written evidence submitted by Macmillan Cancer Support (WRW 10)

Executive Summary

1. Macmillan Cancer Support welcomes the opportunity to respond to the Public Bill Committee’s call for evidence regarding the Welfare Reform and Work Bill.

2. Ahead of the Budget, we welcomed the fact that the Government stated that their welfare reform programme would be underpinned by a commitment to ensuring that the disabled and vulnerable ‘should always be protected’.

3. However, we do not believe that proposals to align the amount of Employment and Support Allowance (ESA) paid to those in the Work Related Activity Group (WRAG) (Clause 13) and the amount of Universal Credit paid to those with limited capability for work (Clause 14) with Jobseeker’s Allowance (JSA) are compatible with this commitment, nor will it help to achieve the Government’s ambition of closing the disability employment gap.

4. There is a clear distinction between people on JSA and those receiving ESA WRAG. Claimants in the WRAG have, by definition, been assessed to have only a ‘limited capability’ for work and cannot be reasonably required to work. Instead, they need to be given time to recover and properly supported to return to work if and when they are ready and able.

5. It is therefore crucial that the Government’s commitment to provide extra investment in employment support for those on ESA is provided in addition to, rather than instead of, the additional money currently paid to those in the WRAG.

6. The proposed change could have a number of unintended consequences for people with cancer and more evidence is needed to better understand the potential impact of the Bill’s proposals. Macmillan is concerned that reducing the financial support available to those in the WRAG will have a significant impact on people with cancer’s:

· Ability to cope with the financial impact of cancer

· Health and wellbeing

7. Macmillan is therefore calling on the Government to remove Clauses 13 and 14 from the Bill.

8. It is also essential that the impact of the welfare changes outlined in the Bill on people with cancer and their carers is fully understood. The Government should therefore commission an independent assessment of the cumulative impact of the changes on people with disabilities and long-term conditions, such as cancer, and their carers.

Introduction

9. Macmillan Cancer Support provides practical, medical and financial support to people affected by cancer, and campaigns for better cancer care. Last year, we supported 5.4 million people and spent over £150 million on services for people affected by cancer.

10. In this submission, we have drawn upon our expertise in providing a range of financial support services, including benefits advice, grants and financial guidance. Last year, these services helped over 123,000 people affected by cancer across the UK.

11. There are over 700,000 people of working age in the UK who are currently living with cancer. [1] In addition to the physical and emotional effects, cancer brings with it a substantial risk of falling into financial hardship.

12. Many people living with cancer struggle to cope with this significant financial impact, which can leave them in serious financial difficulty, including inability to pay bills and spiraling debts. This can lead to an increase in anxiety and place additional pressure on people at a time when they should be focusing on their treatment and recovery. For many, it can take several years after treatment ends to recover financially.

Changes to financial support available to new claimants in the Employment and Support Allowance (ESA) Work Related Activity Group (WRAG) - Clause 13

What is Employment and Support Allowance (ESA)?

ESA is designed to support people who have been medically accessed as having limited capability for work and is an essential support for many people affected by cancer who are unable to work because of their cancer. There are two elements to ESA – the Support Group and the Work Related Activity Group (WRAG). Claimants in the Support Group are identified as having the most severe functional impairment or risk to their health and their condition means they have limited capability both for work and for work-related activity. Claimants in the WRAG are identified as having limited capability for work, but are able to take part in some work-related activity. This is defined as activity that makes it more likely to get a job or remain in work, but there is no requirement to apply for jobs, as is the case for Jobseeker’s Allowance (JSA) claimants.

13. Macmillan has significant concerns about the Bill’s proposal to reduce the amount of support available to new ESA claimants from 2017 onwards who are in the WRAG. We believe that this will cause considerable financial difficulties for people living with cancer and will consequently have a negative impact both on their health and wellbeing and subsequently their ability to return to work.

14. As a result of a welcome protection introduced in 2012 following the second independent review of the Work Capability Assessment, many cancer patients undergoing most types of chemotherapy and radiotherapy are placed in the ESA Support Group. However, we know that thousands of others, who may be experiencing long-term side effects as a result of their cancer treatment, are placed in the WRAG. This includes people who will initially be placed in the Support Group and then moved into the WRAG following recovery of the prescribed treatments. This reflects the fact that people are no longer experiencing such severe symptoms and that, whilst they have been assessed as still being too ill to work, there is a reasonable chance that their condition will improve in the future and that they could therefore begin some work preparation activities . Thousands of future cancer patients will therefore experience a significant drop in financial support at some point during their cancer journey under the proposals to reduce the amount paid to those in the WRAG.

Rationale for retaining WRAG payment at current rate

15. We do not believe that reducing the amount paid to those on ESA WRAG by approximately 30% from £102.15 a week to £73.10 a week will help to achieve the Government’s ambition of closing the disability employment gap.

16. The ESA Impact Assessment accompanying the Bill states that 61% of ESA claimants in the WRAG want to work, and that therefore reducing the ESA WRAG rate to the same level as JSA will ‘provide the right incentives and support to encourage people to move back to work’. [2]

17. There is an inherent difference, however, between someone wanting to go back to work and someone being physically and mentally able to do so and it is important that this is recognised. Whereas claimants of JSA are available, seeking and able to engage in work, claimants in the WRAG have, by definition, been medically assessed to have only a ‘limited capability’ for work and cannot therefore be reasonably required to work. It is imperative that the level of financial support provided to claimants recognises this distinction.

18. JSA is intended to be an absolute minimum amount someone can live on and is meant to be a very temporary measure to encourage someone to seek employment as soon as possible. It would not be reasonable to expect someone facing the additional costs of a disability or long-term condition, such as cancer, to live off the JSA rate for a long period of time and the higher rate currently paid to those in the WRAG reflects this.

19. People on WRAG already identify that they would be better off financially if they were able to work, but that health reasons prevent them from doing so. The Department for Work and Pension’s own research shows that while 68% of WRAG respondents agree that having a job would make them better off financially, only 25% agree that having a job would be beneficial for their health. [3] This suggests that the barriers to entering employment are more likely to be health-related than due to a lack of financial incentive to seek employment.

20. People affected by cancer need to be given time to recover and properly supported to return to work if and when they are ready and able. It is also important to acknowledge that some people, because of the nature of their cancer, treatment or employment, may never be physically or mentally fit to return to work.

21. It is therefore crucial that the Government’s commitment to provide extra investment in employment support for those on ESA is therefore provided in addition to, rather than instead of, the additional money currently paid to those in the WRAG.

22. There is evidence that effective return to work support for those people with cancer who were in work at the point of diagnosis and who are ready and able to return requires a strategic framework of active engagement with a variety of different actors and services, including employers and health professionals. Other claimants in the WRAG, who were unemployed at the point of diagnosis with cancer, may have even more complex needs and more research is needed to fully understand these.

Detrimental impact on people affected by cancer

23. In addition, Macmillan is concerned that reducing the financial support available to those in the WRAG will have a significant impact on people with cancer’s:

· Ability to cope with the financial impact of cancer

· Health and wellbeing

24. As stated above, Macmillan’s research shows that 83 % of people living with cancer are £570 worse off per-month as a result of their diagnosis. [4] Many fall into debt and face considerable long - term financial difficulties.

25. Macmillan is therefore concerned that reducing the financial support available to those in the WRAG will lead to yet more people living with cancer facing such difficulties, and increase the likelihood of people falling into financial crisis.

26. ESA is intended to support people to meet daily living costs, which are often significantly higher for people with cancer as a result of their illness, treatment and recovery. Macmillan research [5] found that six in seven people with cancer see their monthly expenses increase by £270 as a result of additional costs including:

· Higher heating costs, as people with or recovering from cancer, may spend more time at home and feel the cold more because of their cancer. Worryingly, over a quarter (28%) of people with cancer said they couldn’t keep their home adequately warm in the winter because of the cost.

· Higher travel costs – many people recovering from cancer will continue to experience symptoms like pain and fatigue and need to pay for transport for distances that those without an illness or disability could manage.

· Additional food costs – as many people are required to change their diets and have higher food bills as a result of the effects of cancer and its treatment.

· Higher telephone or internet bills – people may suffer from fatigue and feel weak following treatment and therefore may be unable to go out as much to see people or access services, requiring them to do so online or by phone.

27. Macmillan welcomed the exemption of Personal Independence Payment (PIP) and Disability Living Allowance (DLA) from the freeze on working age benefits, in recognition that people with disabilities face significant extra care and mobility costs. T his is a vital support for those people with cancer who are eligible. However, as PIP / DLA is a benefit intended specifically for costs related to mobility or care needs (reflected in the eligibility criteria and assessment process) many of the costs outlined above would not be covered by a PIP / DLA payment. In addition, not all those living with and beyond cancer who are in the ESA WRAG will be receiving PIP/DLA – for example, if their mobility or care needs are not sufficient to meet the threshold, but are still too ill to be required to work.

28. The payments people receive through ESA must therefore acknowledge and recognise the extra costs people living with and beyond cancer face as part of their daily living. Macmillan is concerned that the Government’s proposal will leave many people, including those with cancer, struggling to cover the cost of items they need to support their recovery.

29. The financial pressure caused by this difficulty in meeting costs can have a significant impact on people affected by cancer’s health and wellbeing. Macmillan research, for example, found that 41% of people with cancer felt more stressed as a result of the financial impact of their diagnosis. [6]

30. Expecting WRAG claimants to live off a lower rate of financial support could be detrimental to people’s mental health and wellbeing, placing additional pressure on people living with and beyond cancer at a time when they should be focusing on their recovery and rebuilding their lives.

Assessment of the unintended consequences on people living with cancer of the proposed change to ESA

31. As outlined above, Macmillan is concerned that the proposed reduction in ESA WRAG could have a number of unintended consequences for people with cancer. We believe that the Government needs to gather more evidence about the impact of the proposals on this group, particularly around whether this could lead them to return to work or seek employment before they might be mentally and physically fit enough to. The case study below, from an individual supported by a Macmillan Benefits Advice Service, provides a real-life example of how returning to work too soon can have a detrimental effect on an individual’s health and wellbeing, which could then, in turn, have knock-on effects on the level of welfare support they require in future.

Case study

Having worked for 40 years, David [1] had to stop work when he was diagnosed with cancer. He underwent successful surgery followed by chemoradiation therapy. Unfortunately it left him with severe fatigue, as he was unable to eat food for many months. He also had physical disabilities as a result of the treatment.

After his sick pay ran out, his company said they could not afford to pay him any additional pay. He therefore claimed ESA, and was later placed in the WRAG. He found himself struggling with the additional costs of a special diet and travel, especially to attend the work-related activity he was required to undertake. He became reliant on credit cards to make ends meet. After being placed in the WRAG he felt pressured to return to work due to his finances however his health quickly deteriorated and it was no longer safe for him to be at work, He was forced to stop due to the impact on his physical and mental health and returned to claiming ESA. Due to this deterioration in his health, caused by his premature return to work, he was placed into the Support Group. He is now being treated for depression and his contract has been terminated.

32. For the reasons outlined above, Macmillan therefore believes that an amendment should be brought forward to remove Clause 13 from the Bill.

Removal of the limited capability for work element of Universal Credit (Clause 14)

33. Clause 14 contains provisions to remove additional payments to Universal Credit claimants with limited capability of work from 2017. This would reflect the changes to ESA WRAG in Universal Credit. For the reasons outlined above, Macmillan is also concerned about the impact that this proposal with have on cancer patients who fall into this group.

34. Macmillan therefore believes that an amendment should be brought forward to remove Clause 14 from the Bill.

The Impact of Wider Welfare Reform on People with Cancer

35. With over 700,000 working age people currently living with cancer in the UK, we are concerned that proposals in the Bill relating to other working age benefits could have a significant negative effect on people with cancer as well as their families and carers. Many are already struggling to cope with the financial impact of cancer diagnosis, treatment and recovery or palliative care, so further changes and reductions, for example to the Benefit Cap and loans for mortgage interest, are likely to exacerbate this.

36. It is essential that the Government comprehensively assess the impact of changes to working age benefits on people with cancer and their carers and, where necessary, puts in place safeguards to ensure they are not negatively impacted. This will demonstrate to what extent the Government are meeting their commitment to ensuring the vulnerable and disabled are protected as part of their welfare reform programme.

37. In particular, the Government should commission an independent assessment of the cumulative impact of the changes to welfare outlined in the Bill on people with disabilities and long-term conditions, and their carers.

September 2015


[1] Macmillan Cancer Support (2013) The Rich Picture: People of Working Age with Cancer

[2] Welfare Reform and Work Bill: Impact Assessment to remove the ESA Work-Related Activity Component and the UC Limited Capability for Work Element for new claims

[3] A survey of disabled working age benefit claimants, July 2013, DWP

[3] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224543/ihr_16_v2.pdf

[4] Macmillan Cancer Support (2013) Cancer’s Hidden Price Tag

[5] Ibid

[6] Macmillan Cancer Support (2012), Counting the Costs of Cancer

[1] Name changed to protect identity

Prepared 11th September 2015