Welfare Reform Bill

The amendment seeks to provide powers to disregard payments received and ensure that activity undertaken as part of service user involvement will not be taken into account in calculating benefit entitlement or payments. The Government recognise the importance of encouraging public bodies to involve service users in improving services, and we are also aware of the concerns that have been raised about how current benefit rules can make it difficult to ensure service user involvement. The noble Lord, Lord Skelmersdale, gave us an example of that. Employment and support allowance is an earnings replacement benefit, so we have to consider very carefully the effect on benefit entitlement of any activity which provides income. Equally, we have to take into account the effect of that activity on eligibility for benefit. However, it is equally important to remember that ESA is built on the aims of encouraging people to work, to build skills and to increase their confidence. It is essential that we provide an appropriate balance between encouraging participation in public life and protecting taxpayers’ money. I know that it is argued by some that service user involvement is not work but I do not think that that is a helpful distinction to make. Service user involvement involves many of the skills and activities that people routinely engage in in their everyday employment and ensures that services reflect the needs of the people who use them. In creating any distinction, we would be dismissing the value of service user engagement in helping disabled people to build confidence and develop the skills that would help them into other types of work. As such, service user involvement could count as part of a person’s work-related activity. Everything that this new clause proposes in respect of treatment of service user engagement can already be done through the Bill. For example, the aim of the amendment could be achieved through the flexibility we already have in Clause 3 where we can regulate for the appropriate treatment of any payments regarding the contributory allowance, including the treatment of expenses. However, whatever we do must be consistent with the principles underpinning the employment and support allowance. ESA is built on a foundation that people should be encouraged to work, build skills and increase their confidence. We want to encourage participation in public life as part of that, but we think that, as is already the case with councillors, a balance is to be drawn between income from working in and representing their community and avoiding duplicate provision from the public purse. We want to ensure that people are rewarded properly and appropriately for their contribution and involvement in their communities, and that there is the right balance between benefits for people who are unable to work full-time due to illness or disability, and the income those people can earn. Any changes we make need to be approached with care. We need to understand what the effects would be, not only for service users and public bodies, but, more widely, for earnings rules and work incentives. While service user involvement is an important activity, we also need to take account of the fact that our goal for many people with health conditions or disabilities is work, and we must not create disincentives for people to achieve that in our enthusiasm to ensure that all members of society can engage in activities in addition to employment. We also need to make sure that the procedures and guidance properly deal with service user involvement. Some Members of the Committee will know that we have recently announced a change to the rules on expenses paid to volunteers to ensure that people who give up their time when on benefits are not penalised. Alongside that, we have revised the guidance on applying the incapacity-for-work test to emphasise that when people take part in service user involvement they should not automatically be sent for a reassessment. A reassessment should be done only when there are specific reasons for believing the work a customer is doing demonstrates that they no longer satisfy the conditions of entitlement to the benefit. We intend that similar guidance will apply to ESA in the future. The noble Lord, Lord Skelmersdale, made reference to therapeutic work. The permitted work rules replaced the old idea of therapeutic work, as agreed with the person advised that—oh! I will leave that note to one side as I cannot read it. The question of permitted work rules is important, but in certain circumstances service users would fall outside the rules, but permitted work rules might be a route for some to engage in the manner envisaged. I hope this reply reassures the Committee that the Government understand the issues the amendment intends to address, and that it is not necessary as the Bill already contains relevant powers. I should also like to reassure noble Lords that, as the Minister for Employment and Welfare Reform said in another place, we are continuing to look for more flexible ways of helping people take up opportunities without fear of their benefits being removed. I therefore urge the noble Baroness and the noble Lord to withdraw the amendment.