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New report shows economic boost of disability benefits

A new economic report shows that increasing access to Personal Independence Payment (PIP) and Disability Living Allowance (DLA) creates a £42 billion wellbeing boost that outweighs the £28 billion admin costs of disability benefits.

The report More than money: The lifelong wellbeing impact of disability benefits is from think-tank Pro Bono Economics (PBE) for anti-poverty charity Z2K. It says that the ‘burden barrier’ to claiming benefits means that eligible disabled people are already put off applying altogether and suffering from poorer health and poorer finances as a result.

Increasing access to these benefits would enhance the wellbeing and health of more eligible disabled people, valued at £12,300 in wellbeing annually per person.

Matt Whittaker, CEO at Pro Bono Economics, said: “Disability benefits provide crucial financial support for millions of people, helping to offset the extra living costs that many disabled people face in their day-to-day lives. But we now know that they do so much more: boosting the mental wellbeing and life satisfaction of recipients to a level well beyond the cash cost of delivery.

“Reforms to simplify the claims process would make this support even more effective, by improving the experience for existing claimants and removing barriers for many more who could benefit.”

Potential £42 billion in annual economic benefits

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PBE economists PIP impact on wellbeing using three steps: sampling eligible individuals from Understanding Society data (2017-2022), comparing life satisfaction between PIP recipients and non-recipients, before and after they became either eligible or received benefits, and assigning economic value to wellbeing improvements.

The average wellbeing improvement associated with disability benefits is valued at  £12,300 annually per person. With approximately 3.5 million disabled individuals currently receiving support, this translates to a potential £42 billion in annual economic benefits, far exceeding the £28 billion annual cost of administering these benefits.

The report warns that government plans to reform the disability benefit system by changing eligibility criteria, redesigning the PIP assessment, or replacing cash payments with vouchers could make the system even more inaccessible. Limiting eligibility or creating additional barriers to applications risks worsening the quality of life and financial outlook for millions of disabled people

Instead, the report urges policymakers to focus on improving access to benefits, with better support for applicants, and a more streamlined, signposted process. The result would be a reduction in the administrative burden, reduced stress on existing applicants and would encourage more eligible disabled people to make a claim.

Ayla Ozmen, Director of Policy and Campaigns at Z2K, added: “These findings show that the narrow focus on the rising cost of disability benefits misses the bigger picture. The report reveals that disability benefits actually provide a boost to the economy: spending on disability benefits should be seen not as a drain on public finances but as an investment in economic growth. Instead of focusing on how to make short-term savings by reducing financial support for disabled people, the government needs to recognise the wider economic gains of disability benefits and instead concentrate on ensuring support is available to everyone who needs it.”

 

author avatar
Alison Bloomer
Alison Bloomer is Editor of Learning Disability Today. She has over 25 years of experience writing for medical journals and trade publications. Subjects include healthcare, pharmaceuticals, disability, insurance, stock market and emerging technologies. She is also a mother to a gorgeous 13-year-old boy who has a learning disability.

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