A spike in disability benefit claims has been linked to reductions in non-health related benefits due to austerity measures, according to experts. The Institute for Fiscal Studies (IFS) highlighted that cuts to housing support for private renters in 2011 resulted in an annual income decrease of £667 for affected families, prompting more individuals to seek disability benefits.
The IFS identified various policy changes, such as cuts to housing benefits, the increase in the state pension age for women, the lowering of the overall benefit cap in 2016, and the requirement for single parents to demonstrate job-seeking efforts to receive out-of-work benefits, as factors driving people towards health-related benefits like the personal independence payment (Pip).
Analyzing the impact of non-disability benefit cuts and tax changes between 2010 and 2019, the IFS estimated that these decisions actually led to a £900 million increase in disability benefit spending. Eduin Latimer, a senior research economist at the IFS, highlighted the unintended consequence of benefit cuts, with more individuals turning to disability benefits as a result.
Latimer emphasized the long-term effects of these changes, as individuals often remain on disability benefits for extended periods. The report underscores the importance for policymakers to consider the ripple effects of adjustments in one part of the benefit system, as they may simply shift pressures elsewhere rather than eliminate them entirely.
The findings of the report could pose challenges for the Government as it revisits its reform of health-related benefits following a recent reversal. The IFS report indicated that the rise in disability benefit claims during the pandemic was likely driven by the escalating cost of living since 2022, noting no significant net benefit cuts since 2019.
Iain Porter from the Joseph Rowntree Foundation, a contributor to the IFS report, urged politicians to take heed of the research conclusions. Porter stressed that if individuals experience deteriorating health due to financial constraints, abrupt cuts are counterproductive in the long run.