Decision-Making and Disability Living Allowance

16 June 2005

Decision-Making and Disability Living Allowance

Report to Parliament by the Comptroller and Auditor General for Northern Ireland (NIA185/03 HC 43)

1. In 1999, the Social Security Agency implemented major policy changes to the decision-making and appeals process for social security benefits. A report published today by John Dowdall CB, the Comptroller and Auditor General for Northern Ireland examines the impact and effectiveness of these changes on the management of Disability Living Allowance (DLA).

2. DLA is a non-means-tested, non-contributory benefit, paid as a contribution towards the extra costs associated with disability. Entitlement is based on a person’s care and mobility needs. It is a complex benefit to administer which in part stems from the complex legislative framework. Traditionally, take-up in Northern Ireland has been much higher than in Great Britain although research would indicate that this is closely linked to variations in health status. In 2003-04 it provided vital support for about 160,000 individuals who received payments totalling £515 million. The key findings of the report are:

  • DLA remains highly vulnerable to financial error. The report concludes that the amount of error is a substantial sum and greater than either the Agency’s estimate of administrative (internal) error of £33.5 million or its estimate of customer (external) error of £41.7 million – due to the way the estimates are determined it is inappropriate to add the amounts together (paragraph 3.12 and 3.13. See also paragraph 6 overleaf).
  • The Agency has substantially reduced the backlog of outstanding claims for DLA and has taken important steps to improve the quality of decision-making. For example, 94 per cent of decisions were error-free in 2003-04 compared with 91 per cent the previous year (paragraph 3.7); • On average, during 2003-04, it took the Agency nearly five months to process a new claim – seven weeks outside its target. At the beginning of the year a new IT system had been deployed which caused a dip in performance, however, by the end of the year, while still outside target, improvements in performance had occurred (paragraph 2.5).
  • Customers who appeal frequently wait more than one year for a final decision on their eligibility (paragraph 4.4).

Improving the speed of decisions (Part 2)

3. The disappointing results in reducing the time taken to deal with DLA claims can be linked, in part, to the fact that a new IT system was only implemented in March 2003, over a year later than intended. The future success of the system will depend to a large extent on how the Agency’s Public Finance Initiative partner manages the operation of the new technology (paragraphs 2.13 and 2.14).

4. Another contributing factor to the delays in processing claims for DLA has been the lack of medical practitioners within the Agency’s Medical Support Service (MSS) to meet the increased demand for independent medical assessment of customers’ disabilities. The Agency has taken steps to reduce the number of cases referred to MSS but the report points out the need for the Agency to ensure that this does not compromise the quality of decision-making (paragraphs 2.19 and 2.20).

Identifying Error and improving the quality of decision-making (Part 3)

5. Benefit Reviews based on statistical samples of 600 DLA cases show that the number of suspected and confirmed fraud cases identified fell dramatically from 37 in 1999 to 2 cases in 2002. There has, however, been a significant increase in the level of customer error (paragraph 3.10).

6. The Agency acknowledges that its use of two separate exercises to estimate the level of internal and external error is complicated. As a result of the report, it is now investigating how information from the two exercises can be combined in order to provide a more accurate and meaningful estimate of the total level of error (paragraph 3.13). (See also first bullet point under Key Findings).

7. The greatest single cause of incorrectness is unreported change in customers circumstances, which may indicate that many DLA claimants still do not understand the rules surrounding DLA. The report calls on the Agency to ensure that the requirements attached to a claim and the basis of the decision are clearly explained (paragraph 3.16).

Disputing decisions on award of benefit (Part 4)

8. The expected decrease in the number of decisions appealed has not materialised, adding to the administrative expense of arriving at a decision. Of the 52,000 DLA decisions made during 2003-04, over 4,700 (nine per cent) went to an independent tribunal (paragraph 4.3) and 1,000 people achieved a more favourable decision (paragraph 4.12). The report recommends that decision-makers should make more use of personal communication with claimants to collect initial or follow-up information so that decision-making is improved and the number of disputed decisions is curtailed (paragraph 4.17).