Working welfare: a radically new approach to sickness and disability benefits

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"Shortly after becoming Secretary of State for Work and Pensions in 2010, Iain Duncan Smith announced his ambition to create “[a] welfare system that is fit for the 21st century.” Over the course of the Parliament, the Coalition Government embarked on a radical programme of change aimed at building a fair and sustainable social security system. The reforms have not, however, had the desired impact for people with a disability or health condition. [...]

Evidence shows that work is good for people’s health and wellbeing and being out of work is detrimental to it, including for many people with mental and physical disabilities.23 Moreover, the longer someone is out of work, the more detached from the labour market they become. Improving the employment prospects of disabled people must be the focus of welfare reform in this Parliament.[...]

This paper proposes structural reforms covering the gateway to, rate of and conditionality for out-of-work incapacity-related benefits. The package of financial and non-financial reforms detailed in this report collectively create a vision for a simpler and more effective out-of-work benefit system for people with health conditions. This is not about savings, but about creating a better system. These structural reforms must be matched by an equally effective system of employment support services, and Reform’s vision for this will be the subject of a third and final report in this series. Achieving the radically different employment outcomes desired by the Government demands a radically different approach – piecemeal changes to the current system will not work. In Summer 2013 Lord Freud said “[t]his is just the beginning…. Universal Credit will roll and roll.”

The following report outlines the direction towards which future reforms should “roll”.