June 15, 2011 • 2:55 pm
Ed Miliband: “When the Prime Minister signed off his Welfare Bill, did he know that it would make 7,000 cancer patients worse off by as much as £94 per week?”

David Cameron: “That is simply not the case… he’s wrong and he should admit he’s wrong… he should check his facts before he comes to the House.”

Prime Minister’s Questions, 15 June 2011 

Today’s House of Commons set piece clash between Ed Miliband and David Cameron centred on the difficult issue of potential benefit cuts to those suffering from cancer.

The Government currently plans to time limit to one year the length of time people can claim a certain type of Employment Support Allowance (ESA), the benefit which replaced Incapacity Benefit in 2008.

Claimants are split into two categories, the Support Group – those deemed to have conditions so serious they will not return to work – and the Work-Related Activity Group (WRAG) – those judged to have the potential to return to work, who are asked to engage in ‘work-related activity’ as a condition of receiving the benefit.

In addition, ESA payments are broken down into means tested and contributory (i.e. not dependent on the level of savings or the income of a partner).

It is those in the WRAG receiving contributory ESA that the Government intends to limit to one year of claims.

However earlier this week the charity Macmillan Cancer Support released figures suggesting that among those affected by the policy would be 7,000 cancer patients, who stood to lose up to £94 per week.

The Prime Minister was adamant that the numbers were not right, and were later dismissed by Downing Street as “guesswork”. So do they check out?

Where the 7,000 figure comes from:

Thankfully, Macmillan were able to very quickly provide us with an explanation of how they arrived at the figure.

There are currently 22,310 people claiming Incapacity Benefit who are cancer patients, listed here under the condition ‘neoplasms’.

The Government is currently reassessing all IB claimants to establish their eligibility for Employment Support Allowance.

These assessments are only at an early stage, but what figures there are found the following.

Fit for work – 30 per cent

Support group – 30 per cent

Work Related Activity Group 39 per cent

Macmillan have assumed that these proportions would be repeated identically for all cancer patients reassessed. This means 8,700 cancer patients (i.e. 39 per cent of 22,310) could potentially be in the WRAG following these assessments.

Added to the 8,700 is the 3,200 people listed under neoplasms who already receive ESA as part of the Work Related Activity group – giving a figure of 11,950.

According to Macmillan, the DWP estimates that 62 per cent of cancer patients on ESA will be claiming contributory ESA, and thus would be effected by this time limited cap should their claims last more than a year.

This means that 7,409 people (62 per cent of 11,950) could potentially be affected. According to a Parliamentary Answer given by Employment Minister Chris Grayling, the Government expects that 94 per cent of people claiming contributory ESA will do so for more than a year.

So, 94 per cent of the 7,409 cancer patients assumed to be on contributory ESA could claim for more than a year and hence be affected by the time limit – 6,964 people.

So what to make of these figures?

Because Macmillan have provided us with a briefing that links to the sources, much of this is straightforward to verify and checks out.

The only potential problems that arise are where there are no figures available, and Macmillan are required to work on assumptions.

They estimate that the Incapacity Benefit reassessments will see the same proportion of cancer patients placed in the WRAG as those with other conditions (39 per cent).

There is reason to believe that the figure could be significantly different for cancer patients specifically.

This is because when we look at the results of assessments for new claimants of ESA (as opposed to those being moved of Incapacity Benefit) different proportions arise depending on whether one looks at the rates for all conditions or for cancer patients specifically..

Looking at figures published in April by the Department for Work and Pensions (DWP), but covering the period to May 2010, we see the following proportions for people undergoing the Work Capability Assessment (i.e. excluding those who withdrew claims before the assessment was complete or were still waiting to be assessed):

 

All conditions

Neoplasms

Fit for work

64.00%

17.00%

Work Related Activity Group

26.00%

17.00%

Support Group

10.00%

66.00%

Likewise, the current caseload figures for ESA by condition again suggest that the proportion of cancer patients put in the WRAG is likely to be significantly different to the aggregated figure:

 

 

All conditions

Neoplasms

Support Group

9.00%

44.00%

Work-Related Activity Group

27.00%

14.00%

Still being assessed

52.00%

32.00%

Unknown

10.00%

10.00%

This does not mean that these proportions will be identical to the proportions for those being reassessed from IB. After all, these are two different groups (existing IB claimants, and new claimants of ESA), so it cannot be assumed that they will be the same.

What this analysis does show is that applying a figure for all conditions specifically to those with cancer will give an imperfect figure.

We put this to Macmillan, and while we are awaiting an official response it was indicated that because the Government does not produce exact breakdowns the figures will necessarily be imprecise, but based on reasonable assumptions.

Losing up to £94 a week?

Claimants accepted as having a limited capability for work receive the ESA ‘basic allowance‘ of £67.50, which is supplemented by £27.75 for those in the WRAG. This means that the maximum payment which such claimants can receive through ESA is £94.25 per week.

Macmillan point out that under the proposals in the Welfare Reform Bill, ESA claimants in the WRAG would be subject to means-testing, which would see those with savings of over £16,000 or a partner in work lose the entire £94 in ESA.

While this is an accurate reflection of one possible scenario set out in the DWP’s Impact Assessment, it is important to recognise that under its calculations, this isn’t the typical amount by which cancer patients would miss out.

According to the DWP, the average reduction in ESA payments expected to be made to those shifted on to the means-tested benefits is £36, some way below the headline figure of £94. This nuance was sometimes lost by the Labour Leader during his exchanges with the Prime Minister this afternoon (“cancer patients, 7,000 of them, are losing £94 per week.”)

Furthermore, the Department estimates that 30 per cent of those claiming contributory ESA would also be receiving income-related ESA “for the majority [of whom] there will be no change in the total amount of ESA received.”

A further 30 per cent are expected by the DWP to become eligible for income-related ESA once they reach the one year time limit for contributory ESA, making them eligible for payments at either the same rate or a reduced rate.

If the Department’s estimates are correct, there is therefore a good chance that some of the 7,000 in Macmillan’s calculations may not actually “lose out” at all, although it is not possible to place a figure on what proportion this might be. 

Conclusion

As a rough estimate at the upper end of the spectrum, Macmillan’s figure is sound, so long as it accepted as such.

On the issue of the 7,000 potentially losing out, the problem is not with Macmillan’s analysis but simply with the lack of data available. Because no breakdown is given in the Impact Assessment produced by DWP of what conditions those affected are likely to have, we can only make estimates based upon current caseloads and the results of the completed Work Capability Assessments.

Likewise the £94 people are set to lose out by is backed up by the figures, although it should be stressed that this is the maximum rather than the average loss expected for all those potentially affected.

So while the figures may not be as conclusive as they were presented by Ed Miliband, the lack of data means it cannot be said just how rough the estimates offered by Macmillan will prove to be..

 

Share this article:
By • 2:55 pm
A non-profit company (no. 6975984) limited by guarantee and registered in England and Wales. © Copyright 2010 - 2014 Full Fact