The ‘inexplicable’ rise in Disability Living Allowance explained

Left Foot Forward's Declan Gaffney explains why there has been a rise in the number of people claiming Disability Living Allowance.

This week sees the end of the consultation period on the government’s proposed reform of Disability Living Allowance, which is intended to reduce working age DLA caseload and expenditure by 20 per cent over three years, starting in 2013. Campaigners have pointed to flaws in the consultation document, and in December the web-based disability campaign The Broken of Britain launched an online petition calling for the consultation paper to be withdrawn.

Among the reasons for making this call were concerns about the “accuracy of the representation of supporting data” used in the consultation paper.

They cite the government’s account of the growth in the DLA caseload over recent years:

“The claim is made that DLA claims have risen by 30% in eight years – without accounting for population growth of 5% in this period, a pronounced demographic shift, and increased awareness of DLA.”

While the rise in the DLA caseload is central to the case for radical change, campaigners are right to point out that government has offered virtually nothing by way of an account of the factors which explain this rise. Indeed, a recent story in the Daily Mail asserted:

“The Department for Work and Pensions says the number of people on DLA has risen inexplicably from 2.5million in 2003 to nearly 3.2million.” (Our italics)

The nearest the consultation paper gets to an explanation of the rise in caseload is this:

“In just eight years the numbers receiving DLA has [sic] increased by 30%. The complexity and subjectivity of the benefit has led to a wider application than was originally intended.”

This seems to be carefully crafted to imply an explanation without actually asserting it, and not without reason, because as an explanation, it is a non-starter: why should ‘subjectivity and complexity’ be assumed to lead to more rather than fewer cases?

Some rudimentary analysis of trends in DLA receipt shows that there is nothing ‘inexplicable’ about the caseload growth, and that the 30% growth figure cited by government is of virtually no relevance to the changes they are proposing.

In what follows, we are looking at a slightly different period – 2002 to 2009 rather than 2010, because mid-year population estimates are not yet available for 2010 and demographic trends need to be taken into account.

Total caseload growth over this period was just under 680,000. Of this growth, 246,000 (36%) was among people over 64 and 108,000 (16%) was among children and young adults. Three hundred and twenty four thousand, less than half the total increase, is accounted for by people aged 20-64, a rough approximation of the working age group who are the focus of government’s planned 20% cut in caseload.

The 246,000 rise in the caseload among those aged 64 or over requires specific comment, as it is entirely explained by the movement into retirement age of disabled people who are already receiving DLA. This reflects the decision, when DLA was introduced, that while only those under retirement age could make a claim for DLA, awards could be retained after retirement (in other words, disabled people wouldn’t have to apply for a new benefit when they retired).

This means that the DLA caseload for older people has a built-in growth trend which reflects the number of years that have passed since DLA was introduced: as the number of people in the population who have retired since 1992 continues to grow, so does the DLA caseload. So demographic change coupled with this basic feature of the design of DLA explains this part of the growth in the caseload.

That accounts for 36% of the total rise.

DLA-decompThe table on the right breaks the remaining caseload growth among those under 64 into the numbers and percentages explained by two factors: demographic change and change in the percentage of people claiming DLA (the rate of receipt).

Table source: Author’s calculations from DWP Benefits Data 5% sample; ONS mid-year population estimates. Downloaded from Nomis.

We have used the 5% sample rather than the 100% data because of differences in age banding between the two datasets. A parallel analysis of 100% and 5% data using using consistent age bands was carried out and yielded identical results for both datsets.

Demography makes a major contribution – more than 125,000 – to growth in the working age group. We have now explained over half of the ‘inexplicable’ rise in the DLA caseload over this period. The rest of the growth, by definition, is due to increases in the rate of receipt of DLA.

Among children and young adults, this growth is overwhelmingly accounted for by increases in claims relating to learning difficulties and mental health problems. While this might in part reflect an increased prevalence of these conditions, greater awareness of the availability of DLA for children with these conditions is likely to be the main driver.

This gets us to 71% of the growth over the period. There remain 199,000 additional working age claims which are not explained by demographic change. It is this figure, rather than the total rise in the caseload, which is relevant to the government’s case for reform, and it represents an increase to the total caseload of 8%, not 30%.

While the publicly available data doesn’t fully explain this growth, it does allow some things to be ruled out. There has been no increase in the flow of working age claimants on to DLA: in fact, quarterly on-flows fell significantly over this period, as shown in the chart below:

Nor has there been any reduction in the number of DLA claims coming to an end: the numbers have, if anything, increased. These changes are consistent with an observable decline in the annual increase in the working age caseload over this period: the caseload is still growing, but at a slower rate.

Why should the number of new DLA claims be falling? It is possible that there has been a reduction in the annual incidence of disability, that is, in the numbers who come to be disabled every year. But the explanation could also lie elsewhere – outside the timeframe we have been looking at.

We know from recent research that there was an increase in the population prevalence of disability during the mid-to-late 1990s, followed by a somewhat smaller decrease. The recent fall in flows on to DLA may simply represent the end of a period of ‘catch-up’ during which the caseload gradually adjusted to a higher prevalence of disability.

The questions raised by The Broken of Britain are highly relevant to the government’s case for DLA reform. The limited information on caseload growth given in the consultation document is, to say the least, open to misinterpretation – and the accompanying text seems almost designed to foster misinterpretation, giving the impression that this growth is due to ‘subjectivity and complexity’ while ignoring obvious explanatory factors.

The consultation period has been extended to this Friday (February 18th). Readers who think that a consultation that leans heavily on such an inadequate account of the trends is fundamentally flawed can still sign the Broken of Britain petition; those who think it is worthwhile engaging with even a flawed process should demand a more accurate account of DLA receipt from government.

109 Responses to “The ‘inexplicable’ rise in Disability Living Allowance explained”

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