When I, Daniel Blake won Best British Film at the BAFTAs it begged the question: did the film reflect reality? The film is about a carpenter who can no longer work. He is confronted by a complex, online world as he tries to gain State disability benefits, with a sub-plot about the wider State benefits cap. Politics aside, what is the reality of life on State disability benefits? Are things about to get much worse for those who try to claim?
Since 2010, the assessment process has been continually cited as unfit by Citizens Advice. A new service supplier was appointed in February 2015 as, in 2014, more than 700,000 people were awaiting assessment. Around half of all those who are turned down successfully appeal that they are ill or unable to work, and gain State benefits.
The process does not start well. The ESA 1 form comprises 56 pages that need review and completion, and ESA50 is a further 21 pages. For someone with mental health issues, this would clearly be a barrier. It is an awful lot to write up for anyone, but is it worth doing with the amount you get back in benefits?
As part of the ongoing move to Universal Credit, from 6 April 2017 applicants for Employment and Support Allowance (ESA) who are assessed as unfit for work but capable of work-related activity will receive a lower level of State benefit, equivalent to Jobseeker’s Allowance. This means the value will fall from £5,312 to £3,801 per year. Can anyone really live on this? Assuming not, then Group Income Protection (GIP) could be the most important benefit any employer will purchase on behalf of its employees.
Additionally, the benefit cap reduced from 7 December 2016. Prior to this, it was £500 per week for single parents and couples and £350 per week for single people. The total amount a couple or single parent can now receive in benefits is £442.31 a week (£23,000 per year) in London, or £384.62 a week (£20,000 per year) elsewhere.
Furthermore, from 1 April 2018 new Support for Mortgage Interest (SMI) payments will be paid as a loan, repayable upon a claimants’ return to work or sale of the house. This follows earlier limitations to the program. Housing benefits are currently the only element of State support that GIP is means tested against, but from April 2018 will also come under a ‘nil earnings’ rule, i.e. it won’t be paid if individuals are in receipt of GIP or if savings of over £16,000 are available to the claimant.
The first rule of insurance is to identify the need for it. There is more need than ever before for Group Insurance products, with Group Income Protection as the priority benefit in the context of the new world of State benefits.