Does the new poverty measure fully capture disability poverty?

In recent years, we have seen fierce political battles over what poverty is, and the best way of measuring it. The Social Metrics Commission (SMC) is therefore a brave venture – to get a politically diverse group of people to agree how poverty should be measured in the UK, led by one of Iain Duncan Smith’s former special advisers, but well-represented by a host of the-great-and-the-good from the Labour years. Amazingly this seems to have succeeded, with this week’s SMC report being been well-publicised and well-regarded (see the IFS response in The Times, or the BBC or the Guardian, and a more lukewarm Telegraph piece), but in this post I want to put some scrutiny on a central claim of the new measure: that it better captures poverty among disabled people.

Why we need to consider the extra costs of disability

There is a clear problem with the current main measures of poverty (known as ‘Households Below Average Income’, or HBAI): they look only at how much money people get. This assumes that everyone with the same amount of money has the same ability to buy the essentials of life, but it completely ignores the fact that some people – including many disabled people – have higher costs of living. (There’s a huge amount of research showing this empirically in different ways: for a list of references see my previous Inequalities post and the link of publications at the bottom).

One of the main claimed benefits of the SMC poverty measure is that it tries to tackle this by accounting for ‘inescapable costs’, such as ‘the impact that disability has on people’s needs’ (in their own words). It does this in a simple way: (i) Some people are given benefits (PIP, DLA, or AA) to help them meet the extra costs of disability. (ii) The value of these benefits that disabled people receive are treated as an estimate of the costs that they face. In other words, if you receive £80/week of PIP to meet the extra costs you need for daily life and getting around, then you are no better off than someone who doesn’t have these extra needs and doesn’t receive PIP.

They also do a host of other tweaks to measuring poverty, which overwhelmingly seem very sensible (These are summarised on p132 of the report). This includes taking people’s assets into account (if you’ve got savings, you can use these to buy essentials); doing a better job of accounting for childcare spending and mortgage payments as an inescapable cost; and some further tweaks around which groups of people are assumed to share income with one another, assuming that people in overcrowded housing need bigger houses to escape poverty, and including those living on the streets.

The impact on poverty statistics in the UK

The headline is that families that include a disabled person are much more likely to be in poverty than other families – the report summarises this as follows (the figures for disabled people themselves are available from their website’s graphing tool):

The report tells us that nearly half of people in poverty are in a household that contains a disabled person (48% in their measure vs. 44% in HBAI; see p135). They don’t actually compare the poverty rates, but this is easy enough to pick up from the official HBAI release though (using the After Housing Costs HBAI measure):

  • Among households with a disabled person, 26% are in poverty in HBAI, vs. 28% in the new SMC measure.
  • The gap in poverty rates between households with (vs. without) a disabled person is 6% (percentage points) in HBAI, but 11% in the new SMC measure.

In other words – when we try and account for the extra costs of disability, then the additional risk of poverty among households containing a disabled person (vs. those that don’t) is much higher.

Better – but good enough?

There’s a lot to be said for this approach. Indeed, I myself (with colleagues at the New Policy Institute) have used exactly the same approach to argue that there was a ‘missing million’ of disabled people who should have appeared in the poverty statistics. It was also recommended by Prof John Hills in his review of fuel poverty for the Government, and was used just last month by statisticians at the House of Commons Library. And as the SMC themselves say, the overwhelming majority of people who give an answer think that poverty should take account of the extra costs of disability (according to their commissioned YouGov poll).

However, there’s a problem. It assumes that disability extra cost benefits (DLA/PIP/AA) are a good measure of the extra costs of disability, when we know that they’re only meant as a contribution towards these costs, particularly for those with higher costs (see p17 of our NPI report & the review before it). In our NPI report we use a second crude measure of adjusting for the extra costs of disability, and find that it makes even more of a difference.

Moreover, if our poverty measure assumes that disability extra cost benefits = extra costs per se, then cutting these benefits has no impact on poverty by definition! That is: if people are receiving less money, then the poverty measure assumes their needs are also lower – which clearly isn’t the case. So to the extent that changes to PIP/DLA mean that fewer people claim benefits who might have done, this won’t be captured in the figures. (Note however that on my back-of-the-envelope calculation from official DLA/PIP/AA data, the proportion of the population who receives these benefits hasn’t changed much 2010-17 – let me know if you know of a more a systematic comparison than this).

As the SMC themselves conclude, we need more research on this to enable us to get a robust, policy-independent measure of poverty that captures the extra costs of disability. I completely agree with what they say here – we need both:

  • “Significant work to understand and measure the extra costs of disability that different disabled families face”; and
  • “Improvements to data captured on disability in both the FRS and Understanding Society to allow for clearer identification of disability types and severity so that extra costs can be understood within the survey data”

The SMC report is a useful step forward, but we need to keep walking…

Advertisements

About Ben Baumberg Geiger

I am a Senior Lecturer in Sociology and Social Policy at the School of Social Policy, Sociology and Social Research (SSPSSR) at the University of Kent. I also helped set up the collaborative research blog Inequalities, where I write articles and short blog posts. I have a wide range of research interests, at the moment focusing on disability, the workplace, inequality, deservingness and the future of the benefits system, and the relationship between evidence and policy. You can find out more about me at http://www.benbgeiger.co.uk
This entry was posted in Blog posts and tagged , , . Bookmark the permalink.

2 Responses to Does the new poverty measure fully capture disability poverty?

  1. Anti-poverty campaigners will welcome the Social Metrics Commission’s [SMC] realisation that the essence of people’s poverty is the lack of power over individual or collective resources needed to allow them freedom of choice in the market “to engage adequately in life regarded as the ‘norm’ in society”. Anything less than this would not meet the requirement of the normal life which those who are not identified as poor can choose to live.
    Two important questions follow the SMC’s formulation. First, what is the reliable evidence that the SMC’s proposed reduction of the crude measure used so far (the cross-national poverty comparison indicator of 60 percent of median household incomes) to 55% of the three-year median household resources reflects the real boundary between adequate resources and poverty, when the existing minimum income standards research carried out by Loughborough University for a decade suggests that it is between 70 and 80 per cent of median household incomes? Second, why in such an overall rich country as the UK are there any groups such as people with disabilities, children or others, whose household resources have been allowed by government to fall below the level needed for them and their families to avoid poverty?
    HMRC’s report that some £29 billion of (covert) tax expenditures went on social policies for higher income earners in 2017-18, taken with the inequalities of benefit and service cuts compared with tax reductions, justifies Professor Sinfield’s recent submission to the UN Special Rapporteur on Extreme Poverty and Human Rights’s investigation of the UK government, that it has failed to use its ‘maximum available resources’ to combat poverty. Rather than reducing the poverty measure, what’s essential now is for the government to restore adequate benefits and credits and the collective resources of services, education, housing and so on to abolish and not merely reduce poverty.

    • Thanks for the comment John.

      In terms of your first question: the SMC don’t make any claim that their poverty line (55% of the three-year average of available resources) reflects the real boundary between adequate resources and poverty. They just didn’t want to change the number of people who were estimated to be in poverty (they admit this in the report), as their focus was on the composition of poverty, rather than the level of it.

      As for the second question, well, yes… We need to do some tracking of material deprivation by by whether people have a disability, in order to see the impact of the various changes the government have made (time-limiting much of ESA, social care cuts etc). Which is a good idea for a future post…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.