NSIP position paper
Permitted Work: NSIP
The National Social Inclusion
Programme (NSIP) was set up to deliver the 27 cross cutting recommendations
from the Social Exclusion report on Mental Health and Exclusion 2004.
Following on from that the Prime Ministers Strategy Unit commissioned
further work culminating in Reaching Out: An Action Plan to Tackle Social
Exclusion. NSIP are progressing the employment recommendations from
We know that people in
work experience better health than those out of work, and that work
can be an integral part of recovery particularly in terms of distance
travelled for those with mental health problems. NSIP are therefore
keen to ensure that the welfare benefit system maximises its potential
to act as an enabler, and barriers for undertaking work, or work related
activity, are identified and overcome. Government has made clear
their intention to simplify the benefit system and reviewing
the Permitted Work rules could be part of this process.
People with mental health
problems have among the lowest employment rates of all disadvantaged
groups (13.3% compared to 59% for those with difficulty hearing),
and constitute the largest number, and proportion, of people on incapacity
benefits (899,200 claimants for mental health and behavioural disorders
compared to 501,700 for Musculoskeletal System and Connective Tissue
disorders which is the next highest group of claimants).
This group has not benefited
from mainstream interventions such as Pathways to Work to the same extent
as other disabled groups. This is despite the fact that
people with metal health problems have the highest want to work
rate of all disadvantaged groups and that mental health
problems, such as depression and anxiety, now account for
the majority of Incapacity Benefit claims. Incapacity Benefit customers
with mental health and behavioural conditions have risen from 27% (707,000)
in 1997 to 41% (1,090,000) of the caseload in 2007. Government
has identified that one of the most significant barriers in accessing
employment is the difficulties moving from benefits to work.
In moving from a passive
to active benefit system Government is evidently keen to enable as many
people as possible to move into or toward work as part of their aspiration
of achieving an 80% employment rate. This was made this clear in the
joint DWP/DH announcement on the development of a mental health employment
strategy. The desire to tackle this issue is furthered by
Public Service Agreement 16 contained within the Comprehensive Spending
Review 2007 2010 which outline Governments commitment to help
socially excluded people achieve better employment and housing outcomes.
Permitted Work is one of a range of programmes and incentives which Government provides to facilitate peoples return to work, by enabling them to move into work gradually without it affecting their entitlement to benefits. However people with mental health problems continually suggest that they are disadvantaged by the current Permitted Work rules, and that they feel unable to take full advantage of what is potentially a very useful step into work due to the fear of being worse off than when on benefits. Recent research by the Interact project purports this; moving into work, or increasing working hours, can lead to unpredictable outcomes because of how different individual circumstances, responses and experiences intersect with complex fiscal measures.
Under current rules Permitted
Work is available to those on incapacity benefits, Severe Disablement
Allowance and Income Support on grounds of incapacity. It will also
be available to those who will receive the new Employment and Support
Allowance (ESA) to be introduced in October 2008. Permitted Work rules
will differ slightly from existing rules for those claiming ESA.
Under ESA , in both contributory
and means tested elements, people will be able to undertake Permitted
Work for fewer than 16 hours and earn up to £88.50 per week (w.e.f.
October 2007) for up to 52 weeks without losing their entitlement to
benefits. This was introduced during the passage of the Welfare Reform
Bill in response DWP research evidence and
the views of stakeholders on the value of encouraging more ESA customers
to try work first.
Further clarity is needed to address stakeholder concerns. Suggestions have been made around abolishing the non-time limited Permitted Work options for ESA which would include the SPW and PCAEPW (DN what do these abbs. mean) categories. These provisions currently promote social inclusion for people with more severe mental health conditions, for whom full time open employment is often not currently, or may never be, a viable option. This is particularly the case for those who have a greater distance to travel to work including having to overcome a greater number of barriers. This is particularly the case for those with severe mental illness or dual diagnosis.
Issues relating to
Permitted Work is considered
by Government to be a stepping stone into permanent full time employment
by enabling people to try working on a part time basis for up to 52
weeks, or longer if on SPW or PCAEPW (see Appendix 1 for details). However
although Government research has shown some successes with the PWHL
in enabling people to get into employment there are a number
of issues that need to be examined in order to ensure Permitted Work
functions as a successful mechanism for enabling those with mental health
problems into employment. The current Permitted Work rules are extremely
complex and have different benefit payment outcomes depending on whether
a person is on means tested or contributory benefits.
A major issue for people with mental health (and other problems) is
the impact of the PWLL and the tapering of Housing Benefit and Council
Tax Benefit for those on means tested benefits. For any earnings over
£20 Housing Benefit and Council Tax Benefit payments are reduced at
a rate of 65p per £1 and 20p per £1 respectively. This tapering often
means that any financial gains are negated and people are often worse
off when undertaking PWLL than when remaining on benefit resulting in
people remaining reliant on benefits when they are willing to work (see
Appendix 2 case studies for examples).
People receiving the
Disability Premium (DP) as part of their Income Support, are entitled
to the PWLL earnings disregard of £20.00 per week. This means
people can work 3.5 hours a week if theyre receiving the National
Minimum Wage. This disincentivises people due to the small amount of
work they can undertake. Being limited to 3.5 hours of work a week prevents
individuals participating in much mainstream employment, particularly
shift work which generally requires a minimum of 7 hours a day. If the
National Minimum Wage continues to rise, the number of hours a person
can undertake employment under the PWLL scheme will continue to fall.
Approximately 1.5 million
people claim incapacity benefit that is contributory and about 1.1 million
people claim income support for disability that is income based, and
250, 90016 people claim Severe Disablement Allowance. If
this proportion is replicated in ESA, eventually up to 1.5 million claimants
on contributory ESA (who have housing costs) will not be able to use
this opportunity to earn up to £88.50 and therefore maintain contact
with the labour market or develop the self-belief to move from benefits
into work because of the limitations set by the earnings disregard.
Under PWLL the number
of hours a person can work decreases further if a person undertakes
more skilled work that pays more than the National Minimum Wage. There
is an implied assumption built into the Permitted Work rules that most
work undertaken as Permitted Work will be paid at the National Minimum
Wage. Many people with mental health problems have had previous skilled
employment. However, because the level of income that a person is allowed
to earn per week is such that if a person undertook work paying above
the National Minimum Wage e.g. consultative work then they are
able to work far fewer than the 16 hour limit for PWHL. This in itself
acts a deterrent, especially when any employment costs, such as travel
expenses, are taken into account. People who have experienced mental
health problems often have skills that mean they can undertake more
highly paid work but this inherent exclusionary policy creates further
disincentive to actively try suitable work opportunities.
For example a person
could undertake consultative work for one a day per fortnight at a rate
of £150 which means the week they work they go beyond the PWHL earnings
limit set but if averaged for the month is lower than the PWHL earnings
limit. This would then trigger the benefit system to stop or reduce
many of the benefits previously available to them. They would be reliant
on return to their original benefits every time without any delays in
reestablishing their claim. Worries about the loss of benefit security
and can have a potentially negative impact on their condition which
further prevents them undertaking work.
Given the fluctuating nature of many mental health problems the fixing
of the PWHL hourly limit of up to 16 hours per week creates a barrier
for people who want to test out working for longer hours and who need
some flexibility to gradually increase the number of hours they work
within a real work environment. Creating a staggered capping system
for the number of hours worked, or calculating the number of hours worked
over a monthly or annual basis would resolve this problem. Ensuring
averaging of wages over a month is well established within JCP
and advertised widely to clients is extremely important to ensure people
understand the amount of work they can undertake under the PWHL scheme.
Individuals who undertake Permitted Work often incur expenses at work
such as travel and lunches. Meeting travel costs can be a huge disincentive
for those undertaking Permitted Work, especially if not receiving mobility
element of DLA. This means people either have to choose to be out of
pocket or do not get involved.
Unlike voluntary work
in which reimbursed travel expenses are not viewed as earnings by JobCentre
Plus, those undertaking Permitted Work who have their travel expenses
reimbursed have the reimbursed amount treated as earnings. This is often
the case for people participating in paid involvement work. This
can further reduce the number of hours or earnings a person can work
within the Permitted Work rules before being affected by the earnings
disregard. People with a mobility problem who require special transport
arrangements or those who live at some distance from their paid work
are prevented from working altogether where the reimbursed costs of
travel exceed their earnings limit. This further reduces the incentives
for trying to undertake work.
Problems with Permitted Work specific to
time-limited participation Currently SPW and PCAE categories
of Permitted Work have no time limit. These elements of the Permitted
Work scheme are generally used by people who have fluctuating conditions
such as mental health problems or more severe disabilities
as a support worker must sign off their work and commit to providing
regular support or because their condition is such they are not required
to undertake the PCA process.
If either or both of
these elements of Permitted Work are removed from the ESA, or are subject
to the same time limits as PWHL, then those with mental health conditions
who struggle to engage with the labour market for consistent periods
of time will be unable to maintain a higher level of contact to test
out, or increase, their work capabilities for longer than a year. If
these people have not found suitable employment within the year then
they will have to wait another year before trying to re-engage with
the labour market for anything beyond the hours allowed under PWLL provision.
Removing these elements
of Permitted Work will further socially exclude those who may never
return to full time employment but wish to remain active to the extent
their conditions allow them to by preventing them engaging as and when
is appropriate to their condition.
SPW and PCAEPW are also
extremely important for those undertaking involvement which is key initiative
of the Department of Health in service development in an
effort to contribute to society. Involvement is usually intermittent
and may be as little as a couple of hours a week for the duration of
a steering group over a few months. It may also be work such as responding
to a consultation or attending monthly or quarterly meetings. There
are no fixed patterns to involvement.
If the SPW and PCAEPW
options for payment are abolished people will be prevented from participating
once their 52 week time limit has been met. As already stated this means
that any progress made during this period in terms of building confidence
and learning new skills will be lost in the intervening year unless
they return to PWLL rules in order to continue their involvement. In
which case those most at risk of social exclusion in society will have
their risk of poverty furthered as they will be subject to benefit tapers
under the PWLL rules.
Fluctuations in benefit
We are not fully clear on the effect on motivation to try permitted work of continually reassessed benefits. It might though be safe to assume that regular changes to benefits, especially Housing Benefits, which take a relatively long time to process, and can result in overpayments, can only serve as a disincentive to make movements toward work.
Cost benefit analysis
It would be necessary
to undertake cost benefit analysis of the recommendations made below
in this paper in order to demonstrate the most effective means of simplifying
the benefit system in order to facilitate access to the labour market
of those currently on Incapacity Benefit or Income Support undertaking
Permitted Work and those who will be on ESA contributory or means tested
benefit in the near future.
These calculations need
to measure the distance travelled by people using the Permitted
Work scheme to access the labour market. The term distance travelled
can be used to refer to the progress that a beneficiary or participant
has made towards greater employability as a result of intervention. Distance travelled outcomes may include social inclusion outcomes such
as increased employment or education, specific mental health outcomes
such as lower levels of mental health problems and reduced levels of
use of medication or services, or other measurable dimensions such as
increased self esteem and empowerment. All these outcomes have very
serious economic impacts on the health expenditure, community participation
of individuals, debt management of individuals, the skill levels of
the workforce and therefore economic progress.
Solutions and Recommendations
1. Simplifying the Permitted
Work Scheme by removing PWLL from the scheme. Research demonstrates
that PWHL is far more effective in enabling people to move off benefits
and into work than other elements of the Permitted Work scheme.
This would enable all benefits claimants (both means tested or contributory)
to be treated in the same way and this would simplify the system of
payments and ensure that no one is subject to a PWLL earnings disregard
Increase the PWLL earnings
disregard for everyone undertaking Permitted Work to allow for up to
8 hours work per week at National Minimum Wage for PWLL over a calendar
month. This would enable people to access mainstream employers that
offer shift work because shift work is usually 7 hours long as a minimum.
3. Confirm that SPW and PCAEPW
rules will be the same for current IB and new ESA customers in order
that all are treated the same and can undertake SPW and PCA exempt Permitted
Work. This would particularly benefit those with fluctuating or long
term conditions to undertake employment as and when their condition
allowed rather than disengaging from employment altogether. This would
improve outcomes for those furthest from the labour market by helping
to lift them out of poverty and removing their need to be continually
reliant on the state thus improving their social inclusion.
4.Clear information about the Permitted Work schemes needs to be available to all Jobcentre Plus clients. Jobcentre Plus staff need to be clear about how the Permitted Work schemes interact with incapacity benefit, income support and ESA in order that those undertaking Permitted Work understand the impact it will have on their financial situation. This includes the impact of how much they can earn, what form of Permitted Work they can undertake, the affect of tapers for Housing Benefit and Council Tax Benefit and whether they will be subject to income tax and National Insurance payments.
This information should also be made available as part of the In Work
Better off calculations system that available online.
Government is encouraging
Britains workforce to gain new skills and undertake employment, enabling
those without skills to enter training and endeavouring to engage those
not currently involved in the labour market. However maintaining the
current rules for Permitted Work for Incapacity benefit, Income Support
and ESA claimants further the barriers it create in gaining employment
to those affected by mental health problems.
The introduction of the
ESA provides a unique opportunity to simplify the benefit system in
relation to Permitted Work by creating equality for those who are on
contributory and means tested elements of incapacity benefits and ESA.
Because eventually all incapacity benefit and disability related income
support recipients will move on to ESA this would greatly simplify the
benefit system in relation to Permitted Work.
In order to further equality and choice, and thereby encourage social inclusion, for those affected by mental health problems it is necessary to promote flexibility in the benefit system in order to encourage more people to be pro-active and undertake activity that will assist a return to work. Those affected by mental health problems have the highest want to work rate of all those affected by disability and a greater use of Permitted Work would help more to achieve their work aspirations.
Current Permitted Work Rules
Permitted Work can be
undertaken by people who are getting one of the following because of
illness or disability:
- Incapacity Benefit
- Severe Disablement Allowance
- National Insurance Credits
- Income Support, Housing Benefit and Council Tax Benefit
You do not need to undergo
a doctors examine in order to undertake Permitted Work.
Under the current rules
there are five potential types of Permitted Work for those on existing
- Permitted Work Lower Limit (PWLL)
can work and earn up to £20 a week for an unlimited period
- Permitted Work Higher Limit (PWHL)
You can work for
less than 16 hours a week (on average) and earn up to £88.50 a week
(w.e.f. 1/10/07) for a 52 week period.
- Permitted Work Higher Limit Subsequent (PWHLS)
You are allowed to
do further periods of PWHL once a gap period of 52 weeks has been serviced.
This is called Permitted Work Higher Limit Subsequent and there are
no limits to the number of times you can do permitted work under this
category. However there must always be a 52 week gap between periods
You can work for
less than 16 hours a week (on average) and earn up to £88.50 a week
(w.e.f. 1/10/07) for an unlimited period under SPW. The work must be
supervised by someone who is working for a local or public authority
or voluntary organisation, whose job it is to provide or find work for
people with disabilities. For example this could be work done in the
community, in a sheltered workshop or for a Social Firm. It also includes
work done under medical supervision as part of a hospital treatment
programme. Support must be from an external agency and must be ongoing
and regular. It must be over and above any natural support provided
by an employer in the work place.
- Permitted Work Personal Capability Assessment Exempt (PWPCAE)
You can work for
less than 16 hours a week (on average) and earn up to £88.50 a week
(w.e.f. 1/10/07) for as long as your health condition or disability
is considered sufficiently severe that you are treated as meeting the
threshold of incapacity without undergoing a medical
studies from mental health service users.
The following case studies
are from service users who have are participating within the Permitted
Work Scheme. Need more and to include examples of people who were put
off PW and how the proposals would encourage them to consider PW or
undertake more hours
Case 1 - Male, North East
I am employed under SPW rules. I get paid the minimum wage of £88.50 for 15 hours 59 minutes work. I feel that given my role this is not a lot of money and I should be earning at the equivalent rate as my colleagues. I need to work the 16 hours a week to make the effort worthwhile.
Because of the nature of my work, I dont get a lot achieved in the working week. I want to work longer hours but am wary of the fact this will affect my benefits. I want to work longer hours not only to do the work I am expected to do but a little bit more without feeling pressured to do it all within 16 hours. I work four hours a day (or thereabouts) over four days in the week. I do this because I need to be fairly flexible. This means that I have to do the hours travel for four days every week. This costs money and is currently about £60 a week. My employer has stated that she is willing to pay my travelling expenses but as we know this will affect my benefit. I could work two or three days a week but I wouldnt have that flexibility. I could also work from home but the people I need to see and speak to work in Nottingham and Mansfield. I also need to be in a work environment for my personal development or there is no benefit returning to work. At the moment I feel that I am giving less than 50% to my work and I find this extremely frustrating.
I feel that I need to slowly build up my stamina for work not only physically but mentally as well and would like to feel that I can do this by working longer without fear of being pursued by the DWP. I would like to see if I could commute to work in the morning, work an 8-hour day and then drive home at 5, just like normal people do. Only when I feel able to do this on a regular basis without feeling fatigued and needing to go to bed when I get home, will I feel that I am able to progress to a full time job.
From the £88.50 I currently earn, travelling costs account for about £60 a week, broadband about £9 a month , and is due to rise shortly to around £18, and my rent has gone from being about £4 a week to £34 with housing benefit. I sometimes wonder if it was wise to come back to the workplace. I said to myself when I was offered the opportunity that it might be better to take the hit and see what prospects arise in a year when I can get full time employment on a good salary like I used to earn before falling unwell.
Case study 2
Female 54, south west
Seven years ago I had
18 months of meetings with a Personal Advisor from New Deal for the
Disabled. Finally it was suggested I ask my Doctor to sign a Therapeutic
Earnings Certificate (TEC). This was just before it changed to Permitted
Work. I understood that the TEC would be continuous and without strings.
When I eventually had
some earnings to declare to the local council for Council Tax Benefit,
they did not recognise TEC and said I had to complete a self-employed
form. Because I did this the DWP said that Im self-employed.
When Therapeutic earnings
changed to permitted work scheme I decided to attempt permitted work.
I read I can earn up to £85 per week. I started to declare earnings
to the local council when my earnings gross (including expenses) were
over £20 p.w. I wanted to be honest from the start, because I was aiming
for the £85.
In December '06 I received a letter of appointment with Job Centre for January '07. At my interview the first words of interviewer were "we could be looking at fraud or malicious report". Although I was accompanied by a CPN I found the experience intimidating.
I endeavoured to supply letters of work and earnings to the JobCentre with the assistance of my CPN and Involvement Workers. At the end of March I received letter from DWP saying judged capable of work and Incapacity Benefit was not being paid anymore. I was put in touch with service user Advocacy, who knew how to Appeal. As a result of my appeal I received a letter from the DWP asking for further analysis of earnings. My earnings came to £12.75 a week excluding expenses and approx £22 a week including expenses. This letter suggested that averaging the figures may be possible and the decision could be reversed without Appeal and contained an apology for the resolution of this taking so long.
Having heard nothing
further from the DWP and not being able to get in contact with the service
user advocate I rang the named signatory on the letter I had received
from the DWP. She complained of a high work load, that she would be
on leave for a week. When told I have had no income since end of March,
said she would make my file a priority on her return. By the beginning
of December heard from I finally heard from my service user advocate.
The DWP had been in contact with him rather than myself. DWP were now
asking for the mileage for each meeting attended. I live in a rural
area and meetings are long journeys, and I didnt think to record
My case remains unresolved
and it is quietly and insidiously devastating. My mental health has
suffered and the recovery process of my own life is blocked. Im lucky
enough to have a secure home but Im being forced to run up debts
on credit cards as I have no income.
Case study 3
Male 49 years old, South West
I have Post traumatic
stress disorder, anxiety and severe depression. I have suffered from
this since I was very young. I have battled with crippling mental, emotional
and physical symptoms for a long time. Ten years ago I had a very serious
breakdown and have not been able to work at all since, despite severe
poverty and actually wanting to do something.
Two years ago a senior
psychologist took up my case and has been working with me since. Slowly
he has helped me to cope with my symptoms. Ive started service user
involvement and this is very useful to me. It helps me to find out about
what help is out there and gives me the opportunity to try and make
a difference to mental health services by giving my opinion and advice
and helping to improve services for other service users.
At first I could not
contribute much but over the last two years I have slowly worked my
way up to quite an important level. This also helps me get acclimatised
again to people and participating in society. As I have slowly built
up my skills and knowledge. I have also campaigned with many others
to be paid fairly for this level of involvement (work). I have now been
informed that I cant do involvement because I am breaking the law
and could have my income support, housing benefit and council tax stopped.
Like many others I can
only get back to any work gradually because like recovery it only happens
slowly in increments. Because of the very prohibitive rules my involvement
would have to be voluntary and I would have to remain on benefits. This
is a waste of a very useful route back to work and a very useful way
of helping the mental health services improve.
I would like to work
in the mental health as a self employed trainer/tutor. I have done a
training course to get a qualification and to learn how to do this professionally.
I had to pay for the course myself from my benefit which meant a total
cutback on food and heat etc. just to get on the course. It costs me
£10 a week in travel. So I am now so broke and must cut back on my
medication which is homeopathic as pay for myself and its expensive.
I hope my health lasts long enough to complete the course. I am doing
this because I want to work and support myself.
I have also, with a few
others, been negotiating with the PCT to try and pilot using us as trainers
to train their staff. They have eventually agreed to give us one or
two sessions to try it out. This was a very hard won offer. But current
permitted work rules will not allow me to accept the hard fought for
and deserved payment. Payment could have been invested in my business
to buy business cards, a projector and advertising. What I, and others
like me, need is to be allowed to create employment opportunities such
as this and to be allowed to keep the money I earn, within reason, without
it impacting on my benefits. This would not be indefinitely, just long
enough to try and secure enough work that I could then reduce my benefit
and try and find the optimum amount of work that I can manage without
making myself ill. I am the person to best judge my limits and getting
sick again will only cost much more in treatment.
Returning into society and activity and/or employment can only be done slowly. Recovery is a lifelong and undulating journey and involvement is part of this recovery journey.