The Evolution of Disability Benefits in the UK:Re-weighting the basket

This paper attempts to clarify the significance of reforms to disabilitybenefits proposed by the New Labour government in 1998, by settingthem in the context of the development of disability benefits since theearly 1970s. The first section charts the creation, extension andsubsequent series of reforms of disability benefits, and shows that while‘compensatory’ benefits like Industrial Injuries benefit have played asteady role, ‘extra costs’ benefits like Disability Living Allowance havebecome an increasingly significant component. Expansion of benefitsdesigned to replace earnings was followed by a contraction in the 1990s,the latter phase accompanied by an increasing emphasis on ‘targeting’.The following section details the latest reforms. These two sections arebrought together using hypothetical case studies to illustrate thechanging balance between different kinds of benefit – the ‘benefit basket’– for disabled people, from before the introduction of specific disabilitybenefits through to the system as it might be in 2001. The paperconcludes that, in accordance with the guiding principle of welfarereform, “work for those who can and security for those who cannot”, thegovernment’s reforms are designed to reward paid employment, whileoffering relatively generous provision for those who are obviouslyunable to work. The question raised is the extent to which alteredincentives will be sufficiently powerful to eliminate the category inbetween– those who are deemed capable of work but who do not have ajob – or whether large numbers of disabled people will fall between thestools of “work” and “security”.[...]