What is happening to the severe disability premium in means tested benefits?
Again – the way that benefits are calculated are all important here.
Currently, working aged disabled people receiving the middle or higher rate care component of DLA, who are also on means-tested benefits (eg. Income Support, Jobseeker’s Allowance, income-related ESA, Housing Benefit etc) might receive the severe disability premium, worth £59.50 a week (2013/14 rate), to meet the extra costs of disability.
The severe disability premium is often used by disabled people to help meet the range of additional costs they and their families face – like household, food or transport costs.
It can be claimed by an individual if:
- They are in receipt of benefits including:
- The Disability Living Allowance care component (at the middle or highest rate)
- Attendance Allowance.
- No-one receives Carer’s Allowance for looking after them.
- And if they do not live with another ‘non-dependent’ (ie. they are living on their own or are classed as ‘living alone’ because they live with another disabled adult receiving a disability benefit).
So people being cared for by another adult who lives with them or where someone gets Carer’s Allowance for looking after them would not be entitled to Severe Disability Premium.
However the severe disability premium is not being replaced under Universal Credit and there is no similar replacement payment.
Disabled carers will only qualify for the ‘limited capability for work’ element (LCW) or the ‘limited capability for work-related activity’ element (LCWRA) in Universal Credit. These will replace the work-related and support groups of Employment and Support Allowance.
We do not yet have full details on the amounts for the elements in Universal Credit, but disability charities have expressed deep concerns that the abolition of severe disability premium will leave this group substantially worse off.
We know that many families provide some support for someone receiving severe disability premium (this is particularly common when the disabled person lives independently) and those families will be extremely concerned about the impact this drop in income would have on the people they support.
If I receive the disability addition to Child Tax Credit how will this be replaced in Universal Credit?
Currently, parents who receive Child Tax Credit (a means-tested credit for people responsible for children) who care for disabled children are entitled to a top up to their tax credit – a ‘disabled child element,’ (worth £3,015 a year, £57.89 a week – 2013/14 rates) if their child receives any level of Disability Living Allowance. Children with the most severe disabilities are entitled to a ‘severe disability element’ (worth an additional £1,220 a year, £23.46 a week).
The Government has announced that the replacement for these elements in Universal Credit will be ‘aligned with the adult disability additions in Universal Credit’. This means that there will be a lower rate (at approximately £30 a week) and a higher rate (at around £80 a week). It is expected that the higher rate will link to the top rates of the DLA care component/Personal Independence Payment daily living component, and this rate looks like it will be very slightly higher than the existing severe disability element. So families of the most disabled children may be slightly better off.
However this means that families of children receiving the middle or higher rates of DLA or the standard rate of Personal Independence Payment would only qualify for the lower rate and would receive a considerably smaller additional payment under Universal Credit (approximately £30 a week) than they currently would (the £57.89 element of Child Tax Credit).
Again, what could be short-term transitional protections would apply, but only for families who receive the existing element.