“We are not cutting benefits for disabled children.”
David Cameron, 14 December 2011

The background

Labour MP Anne McGuire first questioned David Cameron on the effects of welfare reform on disabled children last month.

She asked the Prime Minister: “Is reducing benefits for disabled children by over £1,300 a year something that reflects the Prime Minister’s often repeated mantra that we are all in this together?”

Mr Cameron’s answer began: “First of all, we are not cutting benefits for disabled children.”

Mrs McGuire popped up again at Prime Minister’s Questions this week, saying the PM’s original answer had been wrong and urging him to have another go.

He replied: “The Honourable Lady is wrong. The money going into Universal Credit for the most disabled children is not being cut. She’s just plain wrong about that.”

That figure of £1,300 seems a lot. Is the government really planning to hit disabled children that hard?

The analysis

Ministers are trying to simplify the benefits system by replacing the long list of different payouts with a single one: Universal Credit.

The overall aim is to reduce the benefits bill and inevitably, some groups of claimants will do better than others.

As the Department of Work and Pensions has made clear, it plans to “align” payments for disabled adults and children, which means some disabled children will get less from now on.

At the moment, families with disabled children who claim Disability Living Allowance can get extra cash through tax credits.  A disabled child is eligible for about £53 a week (£2,800 a year) and a severely disabled child receives around £75 (£3,930 a year) a week.

As a DWP impact assessment (here, p28) makes clear, the benefit for less disabled children to fall from £53.84 to £26.75 a week. That’s a cut of £27.09 a week or £1,409 a year.

Severely disabled children will see their benefit go up very slightly, from £75.58 to around £77.

What counts as “severely disabled”? Individual children are assessed on a case-by-case basis according to their care needs. Those who need round-the-clock attention will probably get the full £77. For the first time, children who are registered blind will qualify for the higher payment.

But children who have Down’s Syndrome or are deaf typically fall into the less disabled category now and may well see their benefits fall, according to disability rights groups.

The government estimates that about 100,000 children will be affected negatively by the change.

But, importantly, ministers have made a commitment to the level of payments to existing benefits claimants so they do not lose out in cash terms at the point of transition to Universal Credit.

So it’s not the case that existing claimants will see their tax credits slashed overnight. Campaign groups opposed to the change have not always spelled that out, but they have pointed out three holes in the government’s promise.

First, the protection is in cash terms and will not be uprated in line with inflation, so the value will dwindle over time.

Second, cash protection only applies where there are no “significant change of circumstances”. The government has yet to spell out what that means. Will parents see the benefit protection for their children withdrawn if their employment status changes or they move in with a new partner?

Thirdly and perhaps most importantly, new claimants will get half as much as they would have done before.

The verdict

The Honourable Lady is not wrong. But Mr Cameron was only telling half the story when he said: “We are not cutting benefits for disabled children.”

It’s true that the most severely disabled children are exempt from the cut, and that existing claimants will get some protection, although it’s not the cast-iron promise that campaigners were hoping for.

But the benefit on offer for new claimants is being cut, to the tune of more than £1,400 a year.

By Patrick Worrall