Poor households are getting slammed as Osborne-era cuts come into effect this week
A drastic cut to working-age employment and support allowance (ESA) is coming into effect today, part of George Osborne’s legacy of austerity.
From today, new benefits applicants who are deemed ‘unfit for work’ due to health conditions, but capable of ‘work-related activities’ (such as CV preparation or skills training) will see their weekly payments fall from £102.15 a week to £73.10 a week — the same amount as those receiving job seekers allowance (JSA).
Although the change will only affect new applicants for now, it is expected to hit 60,000 people over the next year, and around 500,000 a year in the long-term. Each of these recipients will be about £1,400 a year worse off than they would otherwise have been.
The government claims that people in this category are likely to be in a position to work in the future, but claimants in the ‘work-related activities group’ tend to receive ESA for protracted periods. Four-in-five current claimants have been receiving ESA for more than two years.
The change is expected to save the exchequer £650m per year.
According to the IFS, this may cause some ESA claimants to shift their behaviour, whether by moving from ESA to JSA, appealing the decision to place them in the ‘work-related activities’ group rather than the support group, or applying for other forms of disability benefits.
However, economists also forsee that ‘many – perhaps the majority – will not respond in any of these ways and will therefore have to make do with an average of £1,400 a year less than they would otherwise have got.’
Later in the week, changes to tax credits and universal credit are due to hit families with children, some by up to £7,000 a year.
Additionally, because many state benefits are being frozen for the second year running while inflation is running at 2.3 per cent, tens of millions of people are undergoing a real-terms cut to their incomes.The freeze is due to last for another three years.
Meanwhile, increases in tax thresholds remain inflation-linked, meaning that wealthier households are reaping the rewards of a £1bn tax giveaway.
As David Finch of the Resolution Foundation puts it, ‘those who gain the most from tax cuts are precisely those who are least affected by benefit cuts.’
These are Osborne-era policies which are continuing to hammer the poorest families in Britain. However, Philip Hammond should not be let off the hook.
He could have altered or abandoned some of these cuts — as his government’s rhetoric on helping the ‘left behind’ surely demands — but he chose not to.
Niamh Ní Mhaoileoin is editor of Left Foot Forward. Follow her on Twitter.
See: Poor families’ incomes are about to get slammed – but it’s nothing to do with NICs
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3 Responses to “Benefits claimants with health conditions have just been hit by a £1,400 annual cut”
nhsgp
10 trillion pounds of socialist welfare state debt comes with a nasty sting in the tail.
Samuel Miller (@Hephaestus7)
It would appear that there are neither measures in the DWP Personal Support Package (https://www.gov.uk/government/news/welfare-reforms-and-330-million-employment-package-start-from-april-2017) to financially offset the ESA WRAG cuts, nor help with subsistence needs, such as heating or eating. New claimants in the WRAG will be hard-pressed to survive on a JSA-level benefit. Many sick and disabled claimants in the WRAG will not be able to depend on the PIP benefit, either. Nearly half of disabled people subject to “planned reviews” of their eligibility for PIP are having their existing award either cut or removed completely, according to new figures obtained by Disability News Service (http://www.disabilitynewsservice.com/nearly-half-of-pip-reviews-saw-award-cut-according-to-unpublished-dwp-figures/).
The DWP’s disregard for the subsistence needs of future ESA (WRAG) claimants is shocking. When sick and disabled people don’t have enough money to live on, let’s not pretend that by focusing solely on getting them into work but leaving them still choosing whether to heat or eat, we are actually tackling the disability employment gap.
The ESA WRAG cuts start on April 3 and tragically coincide with the triggering of Article 50 (Brexit); employment opportunities for sick and disabled people will rapidly disappear—the DWP’s additional financial support to Jobcentres will be ineffective and wasted.
See also: Ekklesia | ESA cut – where is the promised mitigation? http://www.ekklesia.co.uk/node/23862. It is evident that Penny Mordaunt, the Minister of State for Disabled People, has misled Parliament, new claimants in the ESA WRAG, and even MPs on the Commons Work and Pensions Committee.
Disclosure: Since 2012, I’ve been reporting voluntarily to the UN on the welfare crisis impacting Britain’s sick and disabled.
Montreal, Canada
ted francis
Sickening isn’t it nhsgp? To think all that money spent on “socialist welfare debt” could have been spent with the private sector, to be deployed to fat cat consultants and medical corporations and their shareholders as the sick and disabled become increasingly ill and in need of support.
Still, Big Pharma, Virgin et al seem to doing all right out our National(ised) Health & Welfare services.