Welfare reform: impact report on benefits for disabled people

2. Context

Disability benefits play a crucial role in reducing poverty and supporting social inclusion for disabled people, because disabled people can be faced with higher barriers to employment, lower pay when in work and higher living costs.

When welfare reforms reduce household incomes, the effect can be particularly negative for disabled people, who can find it more difficult to increase their earnings to compensate. Higher barriers to work mean that disabled people are much less likely to be employed – in 2018 the Scottish employment rate for disabled people was 45.6%, much lower than the 81.1% employment rate of people who were not disabled^[19]. That was despite economically inactive disabled people being more likely to want to work than economically inactive non-disabled people – in 2017 two thirds of inactive disabled people stated they were inactive because of poor health^[20].

Disabled people who are employed also, on average, receive lower pay. The Equalities and Human Rights Commission estimated that between 1997 and 2014 disabled men were paid an average of 13% less per hour worked than other men, while disabled women were paid an average of 7% less per hour than other women^[21].

Everyday living expenses can also be higher for disabled people. Extra costs can arise, such as the cost of specialist equipment to help live independently, or higher energy and transport costs. Families with disabled children across the UK are much less likely to be able to afford to take a holiday away, or replace worn out furniture, clothes or important household electrical goods^[22].

These additional costs are recognised by the Social Metric Commission’s poverty measurement tool, which shows that across the UK poverty rates for people living in families with at least one disabled person are significantly higher (28%) than they are for those living in families with no disabled people (19%)^[23]. The Commission estimate that almost half, or 48%, of people in poverty live in a family where someone is disabled.

Official statistics on poverty in Scotland also show that households with someone disabled in the family are around 7 percentage points more likely to live in relative poverty after housing costs^[24]. However, these statistics also show just how important disability benefits are. When the value of any disability benefits received are deducted from household disposable incomes, the poverty rate for disabled households is almost twice (30%) that of others (16%).