Introduction of Personal Independence Payment

Personal Independence Payment (PIP) is replacing Disability Living Allowance for people of working age. PIP is non-means-tested and is intended to help with the extra costs arising from ill health or disability. It has two components: a mobility component, based on an individual’s ability to get around; and a “daily living” component, based on ability to carry out other key activities necessary to be able to participate in daily life. Each component has two rates.

When fully introduced, it is expected that around 600,000 fewer people will receive PIP than would have got DLA, and expenditure will be £2.5 billion a year lower than it would otherwise have been.

Entitlement to PIP is determined by a “new, fairer, objective assessment of individual need.” Atos Healthcare holds the contracts for undertaking assessments in Northern England and Scotland; and in London and Southern England. Capita Business Services Ltd holds the contracts covering Wales and Central England; and Northern Ireland. These are separate from the DWP Medical Services contract, now held by Maximus.

The timetable for introducing PIP has been revised twice. In December 2012 DWP announced that PIP would be introduced for new claims from April 2013 as previously announced, but for most existing DLA claimants reassessment would not begin until October 2015. Reassessment of DLA claimants with fixed-term awards, or reporting changes in circumstances, was to have started nationally in October 2013, but from that month it commenced in certain areas only. Reassessment is gradually being extended to further postcode areas. The Government said that a more “controlled approach” to the introduction of PIP would enable it to learn lessons from the “living running” of the new benefit.

In a report in February 2014, the National Audit Office said that “poor early operational performance” had led to “long uncertain delays” for PIP claimants. The Department had failed to allow sufficient time to test the new system, and unexpected delays in the assessment process had led to a large backlog of claims. NAO recommended that the DWP set out a clear plan for informing claimants about the likely delays they would experience, while plans to improve performance took effect.

Both the Work and Pensions Committee and the Public Accounts Committee described the level of service to PIP claimants and the length of time people are having to wait for decisions on PIP claims as unacceptable. In June 2014 the then Chair of the Public Accounts Committee, Margaret Hodge, said the implementation of PIP had been “nothing short of a fiasco.” The Government acknowledged that the situation was not satisfactory and said it was "working collaboratively" with the assessment providers to improve performance and reduce the backlog of claims.

The last Government said that, as a result of actions it was taking, by autumn 2014 no PIP claimant would have to wait more than six months and by the end of 2014 no one would be waiting more than 16 weeks. However, this commitment relates to how long a person has to wait for an assessment once they have returned the completed form, not the overall end-to-end journey from initial contact with the Department to the decision on their claim.

Statistics released by DWP in May 2015 show that, for new PIP claims (excluding those under the special rules for terminally-ill people) “cleared” in March 2015, the average time from registration of the claim to a decision was 15 weeks (down from a peak of 41 weeks in July 2014), and 11 weeks from referral to the assessment provider to a decision. For DLA reassessments, the average interval from registration to decision was 11 weeks (down from 32 weeks in August and September 2014), and 6 weeks from referral to the assessment provider to the decision. The next statistical release is expected on 17 June.

On 5 June the High Court ruled that the length of time two claimants had had to wait for a decision on their PIP claims was unacceptable and unlawful, but did not breach their human rights. The Government is considering the terms of the judgment.