Disability, care and tax credits: why recipients of work replacement benefits are worse off than workers


Under the current benefits system, the main forms of working-age income-replacement benefits are Job Seeker’s Allowance, Employment and Support Allowance, and Carer’s Allowance. Eventually JSA and ESA will be subsumed by Universal Credit, as will Tax Credits, et al. This homogenous application of benefits supposedly simplifies the benefits process for claimants, facilitating a smooth transition off benefits, and into work.

Etymologically, JSA and ESA are work-focused. The old “incapacity benefit” acknowledged that, at times, people are “incapable” of work, through illness, injury or disability. It is not unaspirational to allow the ill to simply be ill. The emphasis of the current system on “helping” claimants back into work, through work capability assessments, unpaid work experience and the duress of a loss of benefits has been well documented. What is less well-documented is the impact of benefits rules upon those claiming carer’s allowance. No amount of linguistic sophistry can turn the provision of care, into a quest to stop caring, and get back to work.

In order to be eligible for Carer’s Allowance, a claimant must provide at least 35 hours of care to someone with substantial care needs. CA provides an income, and eligibility to Working Tax Credits. This includes childcare costs, but not for a disabled child receiving the care. On paper, this seems logical: the childcare element of tax credits is intended to “help” the parent work. For the carer, the child IS the work. However, any claimant providing in excess of 35 hours of care outside of nursery hours is probably providing significant night time care, and still requires childcare, so they can catch up on sleep.

Of course, CA can only be paid once the person for whom care is being provided, is in receipt of the qualifying benefit. Claimants are at the mercy of the efficiency of the DWP. The introduction of mandatory reconsideration for DLA/PIP means that the full assessment process through to tribunal can take in excess of a year. These delays result in backdated pay. CA can be backdated to the date of an original DLA claim, providing the application is made within 3 months of the award. However, in order to be eligible for backdating for tax credits, the change of circumstance must be communicated within 31 days. This inconsistency of timeframe can easily catch out new applicants, and the costs will be significant, potentially over a year of entitlements.

Working Tax Credit and Child Tax Credit both include a disability element. Backdated increases to Child tax credits are paid providing this is communicated on time and claimants are already in receipt of tax credits. Backdating will not be applied to disability premiums for new child tax credit claims. This is in stark contrast to new claimants for working tax credit, where backdating is applied to the disability element for all claims, including new claims, providing the timeframe is met. A disabled worker element is paid where an applicant had previously claimed a qualifying benefit, such as ESA or DLA, has a ‘physical or mental disability which puts [you] at a disadvantage in getting a job’ but has overcome this to gain employment. It is the incentive back into work: the carrot to the stick of benefit stoppages. This is paid to recipients of DLA/PIP, only whilst they are in receipt of the qualifying award, but to previous ESA claimants ad infinitum, as their reward for getting a job.


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