Why the poverty rate can be misleading for disability
This year, for the first time, Monitoring Poverty and Social Exclusion featured a chapter on disability. This forced us to think about how we measure poverty among disabled people and what this means for policy.
The starting point was to look at the poverty rate. Figure 1 (page 83 of the report) shows the proportion of people in poverty in families where someone is disabled and in families where no one is disabled. We can see that, in 2010/11 the poverty rate for people in families with disabled people was, at 24%, less than the level 15 years ago (30%) but still higher than the rate for families where no one is disabled (20%).
Figure 1: The proportion of people in poverty
Looking only at people in families where someone is disabled, we can also break them down by those in receipt of a disability related benefit and those not. In 2010/11 the poverty rate for those in families claiming a disability benefit was 14% compared to 29% for those not claiming. For context, around one-third of people in families where someone is disabled receive a disability benefit.
So the poverty rate for people in families claiming a disability benefit is half that for people in families where someone has a disability but is not claiming. What this means is that disability benefits are reducing the poverty rate among disabled people. In fact, households receiving disability benefits have a lower risk of poverty than households with no disabled people.
However, we know that there are costs associated with disability that some of these benefits are intended to cover. This leads us to question how much the poverty line can tell us about disability as it doesn’t take into account the additional costs of disability. So as well as low income, we need to consider household expenditure. We do this by looking at whether households can afford a range of everyday items including keeping the home warm enough in winter, keeping the home in a decent state of decoration and celebrating children’s birthdays. This is commonly referred to as a measure of material deprivation.
Figure 2 (page 83 of the report) shows at the relationship between disability and material deprivation. (The definition of material deprivation is complex but explained in full in our report on page 153). It shows that families with a disabled person are more likely to lack basic items for reasons of cost than households without a disabled person, even when they have the same level of income.
Figure 2: The proportion of people that are 'materially deprived'
For lower income families with a disability, the additional costs of having a disability clearly means that other ‘basic items’ contained in the material deprivation measure must be sacrificed. When comparing the income of disabled families with non-disabled families we cannot assume that a higher income means a higher quality of life as the demands on their income are greater.
These findings are not surprising but they are important. It highlights that benefits such as the Disability Living Allowance (DLA) are entirely justified. So it is worrying that DLA is going to change to the Personal Independence Payment (PIP) as, at the time of writing, the government’s intention is to cut 20 per cent of the DLA caseload (and hence expenditure). Given what these graphs show, withdrawing any of this benefit is taking a huge risk with the lives of vulnerable disabled people.
And this is not the only way that the disabled could be affected by the benefit cuts. Our report also found that many households in the poorest fifth of the income distribution will be hit twice by welfare reform: through changes to housing benefit and income support benefits. Those on DLA could be hit three times over.
Alongside this, a report out last month showed that some disabled groups would also lose out under universal credit. Whatever the government plans for welfare reform are it is clear that disabled people need that extra bit of money to meet their basic needs than the non-disabled. Cutting this support can only result in poverty becoming both deeper and wider among disabled people.