Disabled Persons (Motor Vehicles) (Hansard, 10 July 1984)

§ Mr. Newton

The Government's policy is to help disabled people to have the means either to have their own personal transport or if they prefer, to help with the cost of public transport. The various forms of help given to this end are as follow.

Mobility allowance and war pensioners mobility supplement Mobility allowance is available, subject to age qualifications, to those who because of physical disablement are unable, or virtually unable, to walk. It is a non-contributory, tax free cash benefit of £19 per week (to be increased to £20 per week from November this year) and paid to people between the ages of 5 and 75, however some 26,000 are paid the allowance for life after transferring from the vehicle scheme to the cash benefit. A claim must be made before age 66 and someone claiming after reaching age 65 must show that the conditions were satisfied before aged 65. All new beneficiaries are given details of ways in which their 537W allowance may enable them to get further financial help with transport costs, including assistance for Motability and vehicle exercise duty exemption. War pensioners can get the war pensioners' mobility supplement if they have problems walking and this is paid at a higher rate them mobility allowance with no age limitation. It is £21.25 per week, rising to £22.25 from November.

Motability Substantial grant-aid is given to the organisation Motability, which helps recipients of mobility allowance and war pensioners' mobility supplement to obtain cars (and wheelchairs) on favourable terms. Its schemes enable people who, for a specified minimum period, receive the allowance or supplement, to:

lease a new car for three years
buy a new car by hire purchase
buy a used car (under 4 years old) by hire purchase
buy a wheelchair by hire purchase

The banks provide finance for these schemes through Motability Finance Ltd, a company set up for the purpose. It has a small charitable fund to help people with special problems, eg those needing expensive adaptations to their cars. From 1 September 1984 people who get Mobility allowance or war pensioners' mobility supplement will not pay VAT on the leasing charges of cars under the Motability scheme.

Existing Car Schemes About 1,100 civilian drivers still have cars which they had on loan before mobility allowance was introduced. They have the right to transfer to the mobility allowance and about 800 have a right to replacement when cars wear out. Another 2,300 war pensioners have cars on loan from the Department under the war pensioners' vehicle scheme which will not be replaced. War pensioners have the right to transfer to the war pensioners' mobility supplement whenever they wish. Participants can buy the cars they have on loan at 4 per cent. less then the trade price given in 'Glass's Guide', and over 1,000 have already done so. About 7,000 people still have Departmental three-wheelers (which are maintained and insured by the Department without charge to the user). Transfer to the mobility allowance can be considered by them if they want to. Users receive a petrol tax allowance of £10 a year. No new people are being added to these schemes.

Car maintenance allowance A car maintenance allowance is paid to everyone with a car (not a 3-wheeler) on loan from he Deprartment. It varies from £90 to £250 according to the age of the car, and includes an element for petrol tax allowance (£10 a year). The car maintenance allowance is exempt from income tax. Recipients are not required to pay vehicle excise duty. Other major costs, such as insurance and conversion to hand controls, are met by the Department.

Capital Allowances Capital expenditure on motor cars provided on lease under Motability for people who get mobility allowance is treated specially for tax purposes. Instead of the annual writing down allowances for motor cars used in a trade that are usually available, the expenditure qualifies for first year capital allowances. This year's Finance Bill extends this to expenditure on or after 21 November 1983 on cars for use by people who have war pensions mobility supplement or its equivalent. The current Finance Bill allows for the general phasing out of first-year capital allowances by 31 March 1986 which has been more than offset by introducing VAT relief from 1 September on leasing payments made by disabled people to Motability. Annual writing down allowances will continue for expenditure after that date.

Indirect Tax Help for Transport for the Handicapped Many specialised items including certain cars used by the disabled are zero rated for VAT. Relief applies to wheelchairs and invalid carriages, stair lifts and stair hoists used with wheelchairs, single seater motor vehicles designed for handicapped people, and vehicles including family cars designed or adapted to carry someone in a wheelchair or on a stretcher. The design or adaptation of family cars must include permanent fitting for wheelchairs or stretcher, including, hoists or ramps. Car tax relief also applies to those vehicles which meet the conditions for VAT relief. 538W VAT and car tax reliefs do not apply to vehicles adapted in a less substantial way for a disabled person, for example by the fitting of hand controls, power steering or widened doors but the cost of adapting goods including motor vehicles is relieved from VAT. The reliefs only apply for the handicapped person's domestic or personal use, or to a charity for making available to handicapped persons for such use. There is a general exemption from car tax for vehicles suitable for carrying 12 or more people which are often used by charities and voluntary organisations for carrying disabled people.

Vehicle Excise Duty Exemption Disabled people eligible for exemption from vehicle excise duty for a car which they use or keep for their own purposes are in three groups. First, as indicated above, people who get mobility allowance and people who get war pensioner mobility supplement. Secondly, also as indicated above, people who get help either by loan of a car or a private car allowance under the former NHS vehicle scheme. The third group includes severely disabled people who receive attendance allowance and are (a) too disabled to drive but have a car registered in their name and (b) sufficiently disabled to qualify for state aided personal transport. People who have cars weighing less than 10 cwt and adapted for invalids and people who use invalid vehicles weighing less than 250 lbs and cannot exceed 4 mph are also exempt.