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

Stephen Pudney and Ruth Hancock

No 2010-35, ISER Working Paper Series from Institute for Social and Economic Research

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.

Date: 2010-11-08
New Economics Papers: this item is included in nep-age, nep-eur and nep-hea
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