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Basic income and disability

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A substantial tranche of current benefits relates to disability and incapacity. We need to distinguish clearly between two different sets of conditions:

1. Treatable conditions

2. Permanent incapacity (e.g. mental or physical disability)

Many (perhaps most) people currently on incapacity benefit fall into the first category. For many of them, their incapacity is as much psychological as physical. The government has created a set of economic conditions in which many people will find it difficult to find a new job if they lose their current job when they are over a certain age, and in which prospects for those just starting their careers may be bleak, no matter how hard they try to find work.

The psychological harm done from finding oneself "on the scrap-heap" is genuine, and many doctors will have little compunction in signing off someone in this condition as "incapacitated". Yet the real cure for this condition is to find employment. Unfortunately, governments have structured the incapacity-benefit rules in such a way that it is risky for recipients to accept job offers, because they will have to sacrifice their entitlement to the benefit when they cannot be sure that the job will work out. Incapacity benefit (and particularly the eligibility rules) thus becomes one of the most pernicious traps in the benefits system.

It suits governments to have people defined as incapacitated rather than unemployed, and recipients have powerful incentives to continue to define themselves as incapacitated rather than as unemployed. Not surprisingly, the ranks of the "incapacitated" has swelled as a consequence in recent years.



Dr. Radut Consulting