The Health benefits system is financially unsustainable and wasting human potential, a committee of Peers warns in a report out today.
The cross-party House of Lords Economic Affairs Committee is calling for urgent reform to the health-related benefits system, having conducted an inquiry into the relationship between the welfare system and long-term sickness.
The Committee concluded that people without work have incentives to claim health-related benefits; and once in receipt of them they have neither the incentive nor support to find and accept a job – work doesn’t pay.
Given the Committee received no convincing evidence that deteriorating health or high NHS waiting lists have been the main driver of the rise in health-related benefit claims, it calls on the Government to set out how it intends to address the benefits system’s weaknesses.
If the Government does not do so, this growing area of welfare spending will remain a challenge for the forthcoming Spending Review.
The committee found that around 3.7 million people of working age receive health-related benefits – 1.2 million more than in February 2020.
We are now spending more on incapacity and disability benefits (almost £65 billion) than defence – and that figure is set to rise.
If 400,000 people who are out of work due to ill health were able to find work, this could save around £10 billion through higher tax revenue and lower benefit spending.
GPs are unable to offer a sick individual the degree of support they may need. The fit note should be overhauled; GPs should be encouraged or enabled to refer an individual to an occupational health professional, while individuals who are signed off work for more than a month should undergo additional or ongoing assessments.
Peers concluded that we should have a system in which those who receive health-related benefits are proactively helped to overcome obstacles rather than remain on benefits and out of work indefinitely.
The Committee urges the Government to consider providing enhanced support, prioritising those claimants where the returns and rewards for getting back into the labour force are high – for example, young people.
They also recommend that, just as unemployed people have a work coach, so should those on incapacity benefit for the first two years of their period on benefits. Each caseworker’s aim would be to help the claimant overcome obstacles, both in terms of health and employment, and get back to work.
