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Disability Living Allowance and Disability Working Allowance Act 1991

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This is the original version (as it was originally enacted).

EXPLANATORY AND FINANCIAL MEMORANDUM

The Bill amends the law relating to social security so as to introduce two new benefits, disability living allowance and disability working allowance, and make connected changes.

Clause 1 adds provisions concerning disability living allowance to the Social Security Act 1975. New section 37ZA provides a new benefit to be known as disability living allowance which will have two components, a care component and a mobility component. A person’s entitlement to disability living allowance may consist of either or both components. Conditions of entitlement to the care component are specified in sections 37ZB and to the mobility component in section 37ZC. For each component, the main condition is that a person has satisfied specified criteria for 3 months and is likely to continue to do so for at least a further 9 months. Any one of three weekly rates of the care component may be payable depending on which of the specified criteria for the care component is satisfied. One of two weekly rates of the mobility component may be payable according to which of the specified criteria for the mobility component is satisfied. The effect of section 37ZD is that, with certain exceptions people aged over 65 will not be entitled to disability living allowance. Supplementary provisions relating to disability living allowance are in section 37ZE.

Clause 2 makes further amendments to the Social Security Act 1975 connected with the introduction of disability living allowance. It restricts attendance allowance to people over 65 who are not entitled to the care component of a disability living allowance and it dissolves the Attendance Allowance Board. It also abolishes mobility allowance, which is wholly superseded by the mobility component of disability living allowance.

Clause 3 establishes a Disability Living Allowance Advisory Board, provides for the Board’s functions, constitution, etc. to be specified in regulations and provides for its expenses to be met by the Secretary of State.

Clause 4 gives effect to Schedules 1 and 2. Schedule 1 contains provisions about the management of disability living allowance and attendance allowance. In place of the existing system of adjudication for attendance allowance by the Attendance Allowance Board, it introduces new adjudication arrangements for both disability living allowance and attendance allowance, including a new right of appeal to a disability appeal tribunal. Schedule 2 contains consequential amendments.

Clause 5 provides power to make regulations in relation to the substitution of disability living allowance for attendance allowance and mobility allowance and the dissolution of the Attendance Allowance Board.

Clause 6 amends sections 20 and 21 of the Social Security Act 1986 to introduce disability working allowance as the fifth income-related benefit. New subsections (6A) and (6B) of section 20 contain the qualifying conditions. Regulations will prescribe the circumstances in which a person is considered to have a disability which puts him at a disadvantage in getting a job. A person is not entitled to a disability working allowance if he or any member of his family is entitled to family credit. New section 20(6E) provides for a disability working allowance to be payable as a fixed award for 26 weeks and that, once awarded, the rate of benefit will not change, unless regulations prescribe otherwise.

Clause 7 makes supplementary provisions about disability working allowance. Subsection (1) inserts new section 27B into the Social Security Act 1986 which provides that, except where regulations prescribe otherwise, a declaration by the claimant that he has a disability which puts him at a disadvantage in getting a job will be sufficient on an initial claim. It also gives power to make regulations to terminate an award if income support, family credit or a disability working allowance becomes payable in respect of a person who is treated as a member of the family of the claimant at the date of his claim. Subsection (2) gives effect to the amendments relating to disability working allowance in Schedule 3. These amendments, among other things, apply to disability working allowance the system of adjudication introduced for disability living allowance.

Clause 8 amends section 20 of the Social Security Act 1986 so that a person is not entitled to family credit if he or any member of his family is entitled to a disability working allowance.

Clause 9 amends the Social Security Act 1975 and the Social Security Pensions Act 1975 to provide linking rules where, before taking up remunerative work and claiming a disability working allowance, a person was entitled to either an invalidity pension or a severe disablement allowance. If such a person is incapable of work on the first day after he stops work and that day falls not later than 2 years after the end of his final award of invalidity pension or severe disablement allowance, he will become eligible again for whichever of those benefits was previously in payment, without having to serve the normal qualifying period.

Clause 10 and Schedule 4 provide for repeals.

Clause 11 provides power to make consequential provision and savings by regulations.

Clause 12 contains provision about the making of regulations.

Clause 13 provides that an Order in Council under the Northern Ireland Act 1974 only for purposes corresponding to those of the Bill will be subject to negative resolution procedure.

Clause 14 provides for administrative expenses attributable to the introduction of disability living allowance and disability working allowance to be met out of Votes.

Clause 15 provides for the Bill’s short title, commencement and extent.

Financial effects of the Bill

The introduction of disability living allowance will increase expenditure out of Votes on benefit costs by about £120m in 1992/3, rising to about £240m by 1993/4. There will also be a longterm increase in administration costs of around £20m a year to be met from Votes.

Schedule 2 is likely to reduce tax revenue by around £10m a year but this is expected to be more than offset by additional income tax receipts of around £20m a year as a result of increased employment due to the introduction of disability working allowance.

The introduction of disability working allowance will be broadly neutral in expenditure terms: the gross cost of around £85m by 1993/4 will be offset by a reduction in payments of other benefits. A large proportion of this reduction will be in payments from the National Insurance Fund.

Effects of the Bill on public service manpower

The provisional assessment is that there will be a requirement for a net increase of about 900 permanent staff in the Department of Social Security as a result of introducing disability living allowance and a further 200 staff as a result of introducing disability working allowance.

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