IFS responds to changes to DWP work capability assessments

Today the government proposed changes to work capability assessments, with the aim of reducing the number of working-age individuals assessed as having a ‘limited capability for work-related activity’ (LCWRA), which entitles them to incapacity benefits (or the equivalent premiums in universal credit) without any requirements to prepare or look for employment. 

• This comes against the backdrop of large increases in caseloads and spending over recent years. Between 2019–20 and 2022–23, the number of individuals in the LCWRA group rose by 30% to more than 2.3 million (in addition, 800,000 are either waiting for assessment or have been assessed as having a less severe incapacity). The government is forecast to spend £26 billion on incapacity benefits this year, £6 billion more (in real terms) than prior to the pandemic.
• The government has suggested changes to the work capability assessment, including to the mobilising, continence, and social engagement and getting about activities used to judge people’s capability. These will reduce the threshold required in order for someone to be judged as able to prepare for work (and therefore not LCWRA).
• The impact of this reform on those individuals who will no longer qualify for the LCWRA group is significant. Not only will they lose out on the additional income (typically almost £400 per month) that LCWRA claimants are entitled to, they will also be required either to prepare for work or to search for a job in order to keep receiving benefits.
• Despite this, the short-run effects of these changes are likely to be limited as they will only apply to new benefit claims and scheduled reassessments (meaning existing recipients will be unaffected until their claim is reviewed). Around 740,000 work capability assessments took place last year, with approximately two-thirds of decisions assigning or keeping individuals in the LCWRA group. 

Responding to the announcement, Sam Ray-Chaudhuri, a research economist at IFS, said:

‘Reforms implemented in the last three decades that were aimed at reducing the numbers moving onto disability and incapacity benefits have often failed to deliver the savings that had been claimed. It should also be remembered that just in March the government committed to scrapping the work capability assessment by 2029 that it is now proposing to tighten. This reform – which at its earliest will be implemented in 2025 and then will only apply to new claims and reassessments – will therefore at most deliver a short-run saving before becoming irrelevant.’