A decrease in non-health related benefits due to austerity measures has resulted in a surge in individuals applying for disability benefits, as per experts’ caution. The Institute for Fiscal Studies (IFS) highlighted that cuts to housing assistance for private renters in 2011 had a direct impact on affected families’ incomes, leading to an increase in disability benefit recipients.
The IFS identified various changes such as cuts to housing benefits in 2011, the rise in the state pension age for women, the reduction of the overall benefit cap in 2016, and the requirement for single parents to demonstrate job-seeking efforts to qualify for out-of-work benefits. These modifications encouraged more individuals to seek health-related benefits like the personal independence payment (Pip).
Analyzing the cumulative effect of non-disability benefit reductions and tax adjustments from 2010 to 2019, the IFS discovered that these decisions actually boosted disability benefit expenditure by £900 million. Eduin Latimer, a senior research economist at the IFS, emphasized the unintended consequence of benefit cuts leading to a higher number of disability benefit claimants.
The report’s findings may pose challenges for the Government as it intends to revisit its reform of health-related benefits following a recent reversal. The IFS report indicated that the increased uptake of disability benefits post-pandemic could be attributed to individuals grappling with elevated living costs since 2022, noting no significant net benefit cuts since 2019.
Iain Porter from the Joseph Rowntree Foundation, a contributor to the IFS report, urged policymakers to take heed of the research conclusions. He emphasized that if people’s health deteriorates due to financial constraints, abrupt cuts are ultimately counterproductive.