Disability Benefits Are Still on Uncertain Ground Despite Government U-turn
Hammering out a national budget is never easy, and coming up with one that will please everyone is well nigh impossible. It is almost inevitably reduced to a strategy of robbing Peter to pay Paul, and sometimes, as in the budget proposals announced in mid-March 2016, that strategy can backfire. A proposed reduction of £55 a week in benefit payments to disabled people, in order to possibly fund a middle-class tax giveaway, created a storm of protest – not to mention what amounted to a Tory civil war. The proposed action would have removed the PIP – Personal Independence Payment – benefits from more than 600,000 disabled people over the next five years, resulting in a savings of £4.4 billion by 2020. The Institute for Fiscal Studies claimed that the cuts would have caused 370,000 disabled people to lose an average of £3,500 a year.
There was the expected protest from charities and disability advocates, but some members of the Conservative government decried the cuts as well. Shortly after the announcement, Iain Duncan Smith, who had been in charge of the reforms, resigned his position as Work and Pensions Secretary. Before long the government had made a U-turn, dropping the controversial PIP cuts, with no immediate plans to fill in that £4.4 billion gap. Nevertheless plenty of other social security cuts remained in place, amounting to billions of pounds of savings – at least in theory. Among these cuts are the plans to cut £30 per week from Employment Support Allowance (ESA) benefits paid to ill and disabled claimants who are unable to work, cuts to child benefit payments, a reduction or freeze in housing allowance payments, and reductions to universal credit (UC) work allowances. Cuts in all of these areas will have their most profound negative effects on poor families.
And for that matter, disability benefits aren’t totally off of the chopping block either. If you are amongst the hundreds of thousands of disabled Britons you need to be aware of the cuts and of resources that can help you manage your money.
A vulnerable population
Many people with disabilities are struggling to maintain a decent lifestyle. Not only do they have to make their way in a world that is still largely unaccommodating to the disabled, but many are struggling to make ends meet. According to information on the Scope.org page, life costs you on average £550 more a month if you’re disabled. And bear in mind that a significant number of people are faced with costs much higher than that average, and that costs tend to increase at a much higher rate than do the payments intended to offset those costs. For example, the specialised equipment, medications, and basic lifestyle accommodations that many disabled individuals require can cost quite a bit more per month than their total benefit allowance, leaving little or no money left for the basic necessities for survival.
These additional costs make it harder if not impossible to amass savings, and increase incrementally the likelihood of falling into a debt hole from which it is impossible to emerge. At best, it is estimated that one in ten disabled individuals’ poverty levels and/or credit challenges leave them with little recourse other than borrowing money just to provide the bare essentials. And because of their financial and credit problems they often have to turn to short-term high interest loans, rather than longer-term loans with lower interest.
One recent study indicated that disabled people are twice as likely as those without disabilities to have unsecured debt totaling more than half of their household income, and they are three times more likely to use doorstep loans. A doorstep or home credit loan is a small high-interest loan, generally marketed to low-income people, where the lender calls at the borrower’s home to collect the repayments.
Taking out a personal loan to handle emergencies or the occasional tight spot isn’t necessarily bad, particularly if the borrower researches lenders carefully and is scrupulous about paying the loan back on time. But it is all too easy to get into trouble with these loans, particularly if one’s disability prevents gainful employment and there is no other reliable source of income. The government cuts are poised to make matters worse for many people.
The benefit cuts that still exist
By no means does the government’s U-turn on the PIP cuts indicate that the battle for benefits is over. As noted above, while the government has reversed itself on the PIP cuts, it has partially compensated for that reversal by quietly freezing, reducing, or outright eliminating collateral benefit payments upon which many poor and/or disabled individuals rely.
Thus far there has been little public outcry about these “hidden” cuts but no doubt that silence will be short-lived. As the cuts begin taking their toll on millions of Britons’ quality of life, the outcry will undoubtedly rise to a deafening level.
Resources to help you if you’re disabled
If you find yourself falling into the group of Britons whose lives are being negatively affected by the changes in government benefits programmes, know that you are not alone, and that there are resources with which you can at least make your situation better. For example, the Money Advice Service website provides a wealth of information and support to help you better manage and stretch the money you do have, and the Scope.org website’s About Disability page can help you better understand what resources are available to you, while also offering advice on making the best use of the resources available to you, including your own money.
There can be no denying the fact that the UK, like the rest of the world, has suffered from the economic uncertainty of the last decade. And as is always the case, the greatest impact is felt by those who can least afford the setbacks that come with that uncertainty. But by educating yourself on what is being done in your name, you have a much better chance of having your voice heard by those who enact the programmes yet never truly experience their ramifications. And by making use of the tools you will need to navigate the paths of personal and government finance, you can do a better job of making your life as pleasant and stress-free as possible.