15 March 2007 - Give work a go without losing your benefit – Murphy announces
New rules announced by the Government today will mean that more people will be able to try out work as part of the new Employment Support Allowance (ESA) without losing their benefit entitlement.
Under the permitted work rules, ESA customers on the income-related element, as well as those on the contributory element, of the benefit will be able to earn up to £86 per week for a year which it is hoped will help their transfer off benefits and into work.
The Employment and Support Allowance – a new integrated contributory and income-related allowance - will replace incapacity benefit (IB) and income support paid on grounds of incapacity or disability for new claimants from 2008.
Jim Murphy, Minister for Employment and Welfare Reform, said:
"All the evidence we have gathered shows that allowing people to try out part-time job options provides a gateway into the world of work, helping them to build up their skills and confidence and vastly improves the chances they have of getting off benefit altogether.
"At the moment we know that if people are on IB for more than two years they are more likely to die or retire than leave it, so giving them the opportunity to try out work helps build up their confidence in their own ability to work and hold down employment.
"We have also listened to the views of stakeholders and IB customers who were very forceful in their view that allowing ESA customers to try work first would help them in the long-term make the step from benefits to work.
"This is part of the Government’s drive to end the legacy of benefit dependency, deprivation and low expectations, such as refocusing the Personal Capability Assessment to an individual’s ability to work, not their eligibility for a benefit. The announcement will take this agenda forward, providing a framework of clear rights and responsibilities."
The Government will bring forward the ‘Permitted Work’ rules in Incapacity Benefit into both elements of the new Employment Support Allowance benefit, which replaces IB and IS for people with a disability or incapacity for work from 2008. All ESA claimants will be able to work for fewer than 16 hours and earn up to £86 per week for up to 52 weeks without losing their entitlement.
Evidence from DWP Research Report 214, ‘A Stepping-Stone to Employment? An Evaluation of the Permitted Work Rules – Wave 2’, shows that allowing people to work up to 16 hours a week for up to 52 weeks with earnings of up to £81 (now £86) helps people increase hours over time and move off Incapacity Benefit completely and into work.
The Welfare Reform Bill contains provisions to replace incapacity benefits with a new Employment and Support Allowance, that alongside a revised medical assessment, the Personal Capability Assessment, will help focus on a person’s capability rather than incapacity for work. ESA is supported by the roll-out of Pathways to Work which will be available throughout the UK by April 2008.
Notes to editors
- The announcement was made by Lord McKenzie in the House of Lords today during the Report debate on the Employment and Support Allowance.
- The Government’s Welfare Reform Bill proposes a new benefit, the Employment and Support Allowance, to replace the current incapacity benefits system for new and repeat claimants from autumn 2008.
- The current rules allow people claiming Incapacity Benefit or Severe Disablement Allowance to work up to 16 hours per work for up to 52 weeks and with earnings of up to £86 without their benefit being affected. Those on Income Support can only earn up to £20 per week before their benefit starts to erode pound for pound.
- The new rules will apply to all Employment and Support Allowance customers regardless of whether they are entitled to the contributory element, the income-related element or both elements of the new allowance.
Media enquiries: 0203 267 5120
DWP Press Office: 0203 267 5144
Out of hours: 07659 108883
