Spending on PIP benefit rises significantly: report
Auditor General reveals claimants were paid £838m in 2019-20
SPENDING on the personal independence payment (PIP) benefit in Northern Ireland last year was significantly more than expected, the Auditor General has found.
The PIP benefit was introduced in the region in 2016 as part of welfare reforms to replace disability living allowance (DLA).
Many have complained about the medical assessment process and length of time applications take.
A new report by Northern Ireland’s Auditor General Kieran Donnelly has found claimants were paid a total of £838m in 2019-20, against an estimated £539m. The report notes that 2019-20 was the first year where expenditure on PIP in NI exceeded that of DLA.
Similar to PIP, DLA expenditure was also higher than expected, at £432m compared to an estimate of £401m.
The report concludes that while it is too early to assess if the implementation of PIP will meet all its objectives, it is likely to cost more than DLA.
By May 2020, there were more than 146,000 PIP claims in payment compared to 78,000 DLA claims. More than a third of PIP claimants receive the highest payment rate, compared to 15% of DLA claimants. The maximum PIP award during 2019-20 was £148.85 per week.
The main disabling condition for claimants awarded PIP is mental illness, affecting approximately 61,000 claimants (42% of claims) in May 2020.
Next is musculoskeletal disease, affecting over 46,000 claimants (33% of claims). This is similar to the position in GB where more than 80% of claims are due to mental illness, musculoskeletal disease, neurological disease or respiratory illnesses.
While payments to PIP claimants are higher than estimated, the report refers to underspends in other areas, due largely to the number of claimant appeals being fewer than expected.
From 2016 to March 2020, the Department for Communities incurred £43m of contract administration costs, compared with an estimate of £111m.
Of the money set aside by the Executive to mitigate against claimants losing out as a result of the move to PIP, the department paid out just 60% (£73m) of the allocated £121m during the four years ending March 31, 2020.
Meanwhile, payments to Capita for completing assessments totalled £88m for the four years to March 2020, which was lower than the department’s initial estimate of £140m.
This underspend was partly explained as due in part to the renegotiation of the contract.
The report also notes that, earlier in the contract, Capita missed key targets relating to clearance times and the quality of assessments, but adds that, more recently, Capita has improved performance in both these areas. Mr Donnelly said while his report has not evaluated the quality of Capita’s work, it concludes the department has generally managed its contract in line with good practice.