Abstract:
The UK's working-age benefit system includes two types of health-related benefits: incapacity benefits for those whose health limits their ability to work and disability benefits for those whose health imposes significant additional living costs. There were big cuts to the generosity of the UK's benefit system in the 2010s which fell mostly on the elements unrelated to health. At the same time, the number of people receiving health-related benefits rose significantly. Various commentators have suggested that these two changes may be linked, that cuts to other benefits may have increased the number of people claiming health-related benefits. This could be because the cuts to non-health-related benefits worsened the health of those affected or because take-up of health-related benefits may have increased. This report investigates the extent to which the generosity of the non-health-related benefit system affects the number of people claiming health-related benefits (primarily disability benefits). To do this, we apply econometric techniques to estimate the causal effect of reforms to non-health-related benefits on the number of people receiving health-related benefits. We study four reforms: the 2011 cuts to housing benefit for private renters; the increase in the female state pension age between 2010 and 2018; the lowering of the benefit cap in 2016; and the introduction of the 'lone parent obligation' between 2008 and 2012, which required more single parents on out-of-work benefits to look for paid work. In each case, we find the reform increased the number of people receiving disability benefits, and we also find that two of the reforms increased the number of people receiving incapacity benefits.
