Up to half a million disabled people and their families stand to lose out under the government’s proposed Universal Credit, a report says.

The Children’s Society, Citizens Advice and Disability Rights UK say 100,000 households with children could have incomes reduced by up to £28 a week.

They are urging ministers to reconsider their plans.

(From BBC News…)

But the government called the report “highly selective” and said it could lead to “irresponsible scaremongering”.

The Universal Credit will replace Jobseeker’s allowance, tax credits, income support, employment and support allowance – formerly known as incapacity benefit – and housing benefits with a single payment. The system will be “piloted” in parts of north-east England next April and will come into force across Britain for new claimants from October 2013. Existing claimants will be transferred to the new system in stages until 2017. Universal Credit will be capped at £26,000 per household.

The report argues that the changes will mean 230,000 severely disabled people who do not have another adult to assist them will receive between £28 and £58 less in benefits every week. It also states that around 116,000 disabled people who work will be at risk of losing around £40 per week.

The report says the impact of the cuts in support for disabled children could be “extremely severe” for families currently receiving the mid-rate “care component” of the Disability Living Allowance, a payment made where a child can be severely disabled but does not need care overnight.

Of those families affected, one in 10 expressed fears that they could no longer afford their own home, while two thirds said they would have to cut back on food, and more than a half said it would lead them into debt. Some families said the changes to support for disabled children could result in their children having to be placed in full-time residential care.

The report says 83% of those eligible for the severe disability premium, which will be abolished under the changes, reported that a reduction in benefit levels would mean they would have to cut back on food and 80% said they would have to cut the amount they spent on heating. The changes start to come into force from October next year and current benefit claimants who move on to Universal Credit will not see an immediate reduction in their payments.

But they will have their level of benefit frozen, with no increases to take into account rising prices, campaigners say, and they may see their support cut immediately if their household circumstances change. Welfare reform minister Lord Freud told BBC Radio 4’s Today programme that the “transitional protection” the government had put in place would mean existing claimants would not be out of pocket.

“Existing levels of support will be maintained in a cash sense for families with disabled children or who are disabled themselves. That will be maintained indefinitely on a cash basis,” he said. On the loss of the severe disability premium, he said there was a “compensating factor” because the government was increasing the general level of support for the most disabled. “It’s misleading just to look at one element going. You have to look at the whole picture,” he said. The Universal Credit package “as a whole is one of the best things for people with disabilities” and would be “massively helpful” for those who are working because it allows greater flexibility, Lord Freud said.

Independent peer Baroness Tanni Grey-Thompson, who shares the title of Great Britain’s most successful female Paralympian with cyclist Sarah Storey, said the findings of the report did not make “easy reading”. She told the BBC: “Under the new system it is going to be difficult for a number of disabled people. The government say people are protected but it’s only for current benefit claimants. “What we want to do is ask the government to think again. We are in a situation where the regulations of the Welfare Reform Bill are coming to us quite soon and we can make changes. I think we can improve the system to help disabled people lead better lives.”

A Department for Work and Pensions spokeswoman said savings from abolishing the adult disability premiums and changes in the child rate would be “recycled” into higher payments for more severely disabled people. She added that Universal Credit would provide greater incentives for people – including disabled people – to try out work and would reduce the financial and administrative barriers to work that exist in the current system. She said: “The report is highly selective and could result in irresponsible scaremongering. “The truth is we inherited a system of disability support which is a tangled mess of elements, premiums and add-ons which is highly prone to error and baffling for disabled people themselves. Our reforms will create a simpler and fairer system with aligned levels of support for adults and children. More importantly, there will be no cash losers in the rollout of Universal Credit. In fact, hundreds of thousands of disabled adults and children will actually receive more support than now, including paying a higher rate of support for all children who are registered blind.”

The report summarises the findings from three research reports based on evidence from surveys of almost 3,500 disabled people and their families, as well as a parliamentary evidence session.