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Assessing the distributional impact of reforms to disability benefits for older people in the UK: implications of alternative measures of income and disability costs

Published online by Cambridge University Press:  09 October 2012

RUTH HANCOCK  and
STEPHEN PUDNEY
RUTH HANCOCK*
Affiliation:
Health Economics Group, University of East Anglia, Norwich, UK.
STEPHEN PUDNEY
Affiliation:
Institute for Social and Economic Research, University of Essex, Colchester, UK.
*
Address for correspondence: Ruth Hancock, Health Economics Group, University of East Anglia, Norwich NR4 7TJ, UK. E-mail: [email protected]
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Abstract

The UK Attendance Allowance (AA) and Disability Living Allowance (DLA) are non-means-tested benefits paid to many disabled people aged 65 + . They may also increase entitlements to means-tested benefits through the Severe Disability Premium (SDP). We investigate proposed reforms involving withdrawal of AA/DLA. Despite their present non-means-tested nature, we show that withdrawal would affect mainly low-income people, whose losses could be mitigated if SDP were retained at its current or a higher level. We also show the importance of the method of describing distributional impacts and that use of inappropriate income definitions in official reports has overstated recipients' capacity to absorb the loss of these benefits.

Keywords

disability benefitolder peoplewelfare reformdisability costsincome measurement
Type
Articles
Information
Ageing & Society , Volume 34 , Issue 2 , February 2014 , pp. 232 - 257
Copyright
Copyright © Cambridge University Press 2012 

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