Social Security (Disability Living Allowance, Attendance Allowance and Carer’s Allowance) (Amendment) Regulations 2013 — Motion of Regret

Part of the debate – in the House of Lords at 8:45 pm on 24th June 2013.

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Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions 8:45 pm, 24th June 2013

My Lords, I have some difficulty in framing this answer because the debate was very wide but the regulations we are discussing are actually extremely narrow. What we are actually discussing is bringing the treatment of patients in hospital into line between those who receive Motability and those who stop receiving it after a certain period. There was an exemption for the Motability element and we are just bringing the two into line. I acknowledge that there has been a very wide debate on the whole area but we are talking about something that is actually much narrower. I hope noble Lords will understand as I try to juggle the two. I will try to deal with some of the wider issues but I will deal with the actual issue first.

I will set a little bit of context by saying that even in these hard economic times this Government continue to spend around £50 billion a year on disabled people and services to enable those who face the greatest barrier to participate fully in society. That figure compares well internationally. We spend almost double the OECD average as a percentage of GDP—2.4% against the OECD average of 1.3%. Only two out of the 34 OECD countries spend more. Through the reforms of DLA and the introduction of PIP, we will make sure that the billions we spend provide more targeted support to those who need it most. Three million people will continue to get DLA or PIP and half a million will actually get more under the new system.

While I am on figures, to answer the question from the noble Lord, Lord Alton, about the money flow to Motability, £1.6 billion went through to it in terms of transfer of benefit. My noble friend Lady Thomas asked what happens to the transfer. Clearly we recognise that some people will lose out but we have sought to ensure that those who lose out are those whose disabilities have the least impact on their participation in society. On our sampling of this, many people—more than half a million—will be winners under PIP.

The UK has a proud history in furthering the rights of disabled people and we want to ensure that all people are treated fairly. The provisions under debate, which also apply to claimants of PIP, are a case in hand. They ensure that everyone receiving the mobility component of DLA or PIP in the future will be subject to the same payment rules, whether or not they have a Motability vehicle. The history of this was that when the mobility component of DLA stopped being paid to hospital in-patients in 1996, transitional provisions were built in, including a measure which allowed for payments to continue in order to cover the costs of the lease on a Motability vehicle. These arrangements represented a reasonable adjustment at the time for those in-patients who were committed to a mobility contract when the rules changed. However, noble Lords must understand that any lease held by someone in 1996 will have now long expired and these arrangements are past their sell-by date for the users affected at the time.

In response to the question from the noble and learned Lord, Lord Hardie, about consultation, we clearly signalled our intention to implement this change in our consultation on the detailed design of our reforms to DLA. In that consultation we made clear that this change was not intended to penalise Motability users but to introduce fairness between how we treat those who chose to take out a lease with Motability—some 600,000 people—and the vast, or substantial, majority who do not, which is 1.1 million people.

We received some support for our proposals. Unsurprisingly, some concerns were expressed as well. There were requests from some of the respondents to the consultation that the mobility component of both DLA and PIP should be paid continuously for all recipients while in hospital. I am sure that noble Lords would agree that to continue paying a benefit intended to meet the additional costs of disability indefinitely when they are already being met by the NHS would be a waste of financial resource, regardless of the financial climate. Adult in-patients will continue to receive their DLA for 28 days, which compares with an OECD estimate of the average hospital stay of between seven and eight days, and benefit payments will continue for 84 days for children.

The consultation told us that we needed to strike a better balance between attaining equal treatment for all DLA recipients in hospital in the future while recognising the particular concerns of those who currently have a Motability vehicle. In particular, concerns were expressed about existing Motability users who could not have planned for these new arrangements at the time they took out their lease. We have therefore introduced transitional protection for those people who had a Motability vehicle and were in hospital when the new rules came in. This will allow customers who were in hospital on 8 April to run out their current lease. However, in contrast to the previous provisions, we have set a backstop so that the protection will end after three years. I think noble Lords will agree that this is an extremely generous transitional protection period.

Therefore, the provisions apply only to people newly entering hospital and remaining there in excess of 28 days if an adult or 84 days if a child. I appreciate that where a Motability vehicle is recovered, this may have an impact on the user’s family—a concern that was also raised by some people in the consultation. However, I stress that a Motability vehicle is meant to be for the use of the disabled person, not to meet any mobility or transport requirements for family members or visitors to hospital. To quote from the Motability scheme’s own terms and conditions:

“The car is used by, or for the benefit of, the disabled person”.

Motability provides additional clarity in the terms and conditions:

“This does not mean that the disabled person needs to be in the car for every journey. In practice, this means other named drivers in the household can use the car for shopping and other routine activities, as long as the disabled customer will benefit”.

I leave noble Lords to decide whether the use of a vehicle by others when someone is in hospital is of a sufficiently direct and immediate benefit to the disabled person. In our view it is not, there being insufficient material benefit to the disabled person, particularly in meeting their own limitations in mobilising, as exemplified by the examples Motability uses.

I also understand that some users are concerned about when Motability would recover their vehicle and whether they would lose money as a result. I assure noble Lords that we have worked closely with Motability on this issue. It has confirmed that where payment of the mobility component stops, it will allow a further protection period of up to 28 days in which to recover the vehicle. Motability has also said that when a vehicle is returned any advance payment outstanding will be returned on a pro rata basis. Once these protections end, Motability will discuss with scheme users the return of the vehicle and, on a case by case basis, whether it may be more appropriate to defer the return of the vehicle. Clearly, if someone is expected to be discharged shortly or the vehicle is heavily adapted, that will be fully considered in any discussions. However, let me be clear: that will be an independent decision by Motability.

I will give noble Lords some figures around the scale of the issue—the numbers that the noble and learned Lord, Lord Hardie, requested. We estimate that there were around 1,500 in-patients with Motability vehicles when the new rules came in on 8 April. As I mentioned earlier, these people will be allowed to run their lease down, but will be subject to a backstop of three years’ protection. In the future, we estimate that there may be around 800 new in-patients a year who have a Motability vehicle, remain in hospital beyond 28 days or 84 days and will be subject to the new rules. These people will benefit from up to an additional 56 days a year of vehicle use and in all cases the return of the vehicle will be subject to one-on-one discussions with Motability, which may include retaining the vehicle for an additional period.

I will now try to pick up some of the broader points that were raised on the general position and the introduction of PIP. As I have mentioned, clearly some Motability customers will not receive the enhanced rate of the Motability component of PIP once DLA reassessment begins later this year, and will lose their vehicle. We cannot reliably estimate at this stage how many people will be impacted as decisions on whether somebody takes a Motability lease are claimant-led rather than led by an assessment of their need. We are, however, working closely with Motability on that, and we will aim to get a bit of a better—