Task Force hopes ESA will increase IP sales

The Income Protection Task Force has hailed changes in the distribution of state benefits for those unable to work, saying it may increase income protection (IP) sales.

Clive Waller, co-chair of the Task Force commented: "The additional publicity given to the size of state benefits will underline how little people have to live on if they are long-term disabled and have no disability insurance. If the industry uses this opportunity effectively, it can stimulate sales of IP."

From 27 October the Incapacity Benefit system was replaced by Employment and Support Allowance consisting of two phases: the assessment phase and the main phase.

In most cases, those qualifying for the allowance will not receive money for the first three days of a claim and will then receive the assessment phase rate while their ability to work is assessed. This rate is paid for the first 13 weeks while a decision is made on the claimant's capability for work through a capability assessment.

The main phase rate starts from week 14 of a claim if the assessment shows limited ability to work. There are two groups within the main phase.

There is work related activity group where claimants will be expected to take part in work-focused interviews with a personal adviser and with access to support to help prepare for suitable work. Claimants will receive a work related activity component in addition to the basic rate.

The support group is when an illness or disability has a severe effect on ability to work. Claimants will not be expected to work but can do so on a voluntary basis. They receive a support component in addition to basic rate.

Peter Le Beau also co-chair of the Task Force said: "This measure has been characterised as an attempt to foil 'benefit scroungers' but it is much more than that, although it may lead to up to a million people coming off benefit. This is a positive piece of legislation that will have strong social benefits."

- For benefit rates, please go to pages 43-44.