§ Mr. Meacher
To ask the Secretary of State for Social Security if he will provide illustrative examples of people who would be(a) better off and (b) worse off claiming the disability working allowance compared with their current situation.
§ Mr. Scott
[holding answer 16 January 1991]: Some illustrative examples of the level of income that disability working allowance (DWA) recipients will have were included in the note published on 12 November, a copy of which is in the Library. All recipients who claim more than eight weeks after starting work will be better off than if they did not have DWA. Most other potential recipients earning more than about £30 a week will be better off with DWA than they would be if they remained on an incapacity benefit.
A small number of people in the circumstances listed might be worse off if they decided to take a job at a very 602W low rate of pay. However, no one will be obliged to claim DWA and, if they choose to take a job and claim DWA, all of them will be better off than if DWA were not available to supplement their earnings.
The level of earnings below which people in the categories listed would be worse off would depend on the incapacity benefit to which they would be entitled if they were not working, the size and composition of their family and, in the case of (a), on the size of the claimant's mortgage.
The circumstances in which a small number of people might be worse off if they decided to take a job at a very low rate of pay supported by DWA include the following:
- a. if the claimant has a mortgage (but we expect about 10,000 DWA recipients will have mortgages and will be better off on DWA);
- b. exceptionally, if the claimant has children and his income, including earnings and DWA, would be very little above income support level, loss of free school meals might take them below income support level;
- c. if the claimant is receiving invalidity benefit and has entitlement to a large amount of additional pension, or if he has a significant amount of capital or another source of income;
- d. if the claimant is on invalidity benefit and has a partner who is working (but we expect that some DWA recipients will have partners who are working and will be better off);
- e. if the IVB recipient is doing therapeutic work permitted by regulations.