The WCA is bad – but will scrapping it be better?

Is it ever bad to scrap a hated policy? For over a decade, disabled people have feared the ‘brown envelope’ from DWP that might mean that they are being called in for a Work Capability Assessment, or ‘WCA’. They have been worried by the prospect of a process that makes them feel less-than-human, and the prospect of unfair decisions that make their lives impossible.Coroners have blamed the WCA on some individual people’s deaths, backed up by research that suggests the WCA caused 200-1,000 suicides.  It has been condemned by disabled people and almost professional group that deals with it, and nearly every political party at some point said they would abolish it.

But before being swept along by a wave of relief that the Conservatives have today said they will scrap the WCA, we need to think: what will replace the WCA, and will it really be better?

What’s changing?

Alongside today’s Budget, the Government unveiled a Health & Disability White Paper that commits to remove the WCA. When deciding on whether people should get the extra disability payment in Universal Credit, the DWP will rely on a completely different disability assessment (for the extra costs benefit PIP). The name of this payment will also change, from the ‘Limited Capability for Work-Related Activity’ component (‘LCWRA’), to the ‘UC health element’.

Just to be clear: a ‘White Paper’ means a plan for action, but it will be ages before any change is seen on the ground – and there’s a chance that it will never happen (the White Paper says that no legislation will be tabled this Parliament, so if the Tories lose the next election it might be reversed). And even if it does happen, there are transitional protections for current claimants (see sections 156-157 of the White Paper). But it’s a still a major moment – Jeremy Hunt described it as “the biggest change to the welfare system in the past ten years.”

So why is the Government doing this? Their main worry about the WCA is that it incentivises people to show that they can’t work. Scrapping the WCA aims to allow “claimants to try work without fear of losing their financial support” (as Jeremy Hunt put it, but you can hear similar views from policy commentators like Torsten Bell and Deven Ghelani, while think-tanks like Demos and Reform have proposed similar things in the past). Indeed, while experts from other countries haven’t talked about the WCA, they have criticised this type of assessment, e.g. Christian Ståhl (a smart and knowledgeable Swedish academic) recently wrote about “the work disability trap”, and the OECD have pushed the idea that we should scrap out-of-work disability asseessments in favour of disability extra costs benefits + a flat rate out-of-work benefit.

But while there’s a simple, plausible argument for scrapping the WCA, there’s two things we need to consider.

Issue #1: Is this a concealed cut in spending?

There’s two reasons why the UK – and nearly every other high-income country – gives higher benefit payments to sick/disabled people with reduced work capacity compared to unemployed people. Disabled people have higher costs of living, which in the UK is partly covered by PIP.  But sick/disabled people with reduced work capacity are also likely to be out-of-work for longer than non-disabled unemployed people – much longer.

Back in the days where different groups of people claimed different benefits, the overwhelming majority (80%+) of unemployed people claimed for less than two years. In contrast, the overwhelming majority (70%+) of incapacity benefit claimants claimed for more than two years (see footnote 44 of this).  Unemployment benefits are not designed to support people for long periods of time, but to tide people over until they find another job – and so they aren’t enough for people with reduced work capacity.

The problem is that there are a group of people who would have got higher payments at the WCA because they’re likely to be out-of-work for ages, but won’t qualify for PIP because they don’t have extra costs. (Added to which, both assessments have their problems so have a certain element of chance). While the majority of those classified by the WCA as having reduced work capacity get PIP, 1.0 million people don’t, with this includes 630,000 with the biggest reductions in work capacity who get the LCWRA extra payment (h/t Karl Handscomb).

So up to 630,000 people might see a cut in benefits. The numbers might be reduced slightly if some of this group apply for PIP and are found eligible. Probably about 30% of this group have already been rejected from PIP (and a further 10% or so previously claimed PIP and left it; h/t Karl again), so they’re unlikely to be eligible – but it’s hard to know how many of the rest would get PIP. So somewhere between 250,000 and 630,000 people are likely to lose out.

Who are the people who lose out?

Who are these people? It’s difficult know. But from older data, it seems likely that over half of those that lose will have mental health problems. [Note: I’m just running some analysis of this group, so will link to a further blog post when this is done].

Further thoughts

On paper, the people who lose out will be balanced by others who gain: namely people claiming UC who don’t have limited work capacity according to the WCA, but who do claim PIP. It’s hard to know the numbers here; the best I could do using Stat-Xplore was to look at UC claimants who aren’t in the ‘no work requirements’ group (or claiming ESA), of whom 205,000 receive PIP. These 200k people would presumably gain some money if the PIP assessment governs extra payments on UC. But these numbers are lower than the number of losers I described in the previous post. Oddly, though, the Budget documents don’t suggest that this is going to be a cut – I’ve got no idea how this is the case (write in the comments/tweet me if you have an idea).

It’s possible that losers could be compensated in other ways. Some policy experts have suggested better sick pay, on the assumption that the difference between PIP and the WCA is primarily about short-term sickness. (Unlike the WCA, PIP is about ‘long-term disability’ – it takes into account how you’re expected to be in the next 9mths as well as the last 3mths). But even though the WCA does a really bad job of capturing work capacity, these are different assessments with different criteria, so there’s some people with longer-term sickness/disability who have reduced work capacity at the WCA, who wouldn’t get PIP.

Finally on £: if we want to know what this means further down the line, we also need to think about long-term political dynamics. Across time and place, disabled people have often been treated better in the benefits system partly because they’ve been thought to be more ‘deserving’ of benefits, and less sensitive to work disincentives.  Will this be maintained if everything gets put it into ‘extra costs benefits’? No-one really believes PIP meets the full extra costs of disability, which are so high as to scare off politicians from a truly equalising benefit – so over time the value of PIP might eroded. But more worryingly, I can see how the universal element of PIP could be gradually eroded, with PIP eventually become a mostly means-tested benefit. Often the effect of one political reform is often to make something else (which is currently unpalatable) later seem like an inevitability…

[The second bit on whether it helps or hinders work is here]

[Note that this article was amended 7th May 2023 to make clear that the international experts were commenting on this issue in general, rather than the UK WCA itself]