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The distributional impact of reforms to disability benefits for older people in the UK

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  • Pudney, Stephen
  • Hancock, Ruth

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.

Suggested Citation

  • Pudney, Stephen & Hancock, Ruth, 2010. "The distributional impact of reforms to disability benefits for older people in the UK," ISER Working Paper Series 2010-35, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2010-35
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    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/iser/2010-35.pdf
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    1. Holly Sutherland & Ruth Hancock & John Hills & Francesca Zantomio, 2008. "Keeping up or Falling behind? The Impact of Benefit and Tax Uprating on Incomes and Poverty," Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 467-498, December.
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    1. Pudney, Stephen & Hancock, Ruth & Morciano, Marcello, 2012. "Disability costs and equivalence scales in the older population," ISER Working Paper Series 2012-09, Institute for Social and Economic Research.

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