How best to support older people to meet the costs that disability brings remains at the forefront of policy debate. Research by Stephen Pudney and Ruth Hancock has investigated how well the dual system of support (cash disability benefits and publicly-subsidised care services) work together. Their analyses used the Family Resources Survey and the English Longitudinal Study of Ageing (and therefore focuses on the household population, excluding those in care homes).
They find that the present system is quite good at using limited resources to minimise the number of older disabled people in poverty. But it is much less effective in protecting people from very deep poverty. The people most affected by this are those with severe disability (and therefore high disability costs), especially those who are unaware of, or not able to negotiate, the systems for claiming help with their care needs. Failure to meet severe need is a much bigger source of targeting error in the current system than is the spending of resources on the ‘wrong’ people. Although introducing means-testing of disability benefits has been suggested, it is possible to achieve similar improvements in poverty outcomes in a fully means-tested or a fully non-means-tested version of the disability benefit system.
The reason for this is that people with low incomes are more likely to be affected by severe disability, and also have a stronger need for support and are therefore more likely to claim any support to which they are entitled. Receipt of disability benefits is much higher (14%) than receipt of publicly-funded care (3.3%) in the 65+ household population in England. Receipt of each form of support rises as disability rises, but only about 50% of older recipients of publicly-subsidised care report also receiving disability benefits. Receipt of both forms of support is concentrated on the most disabled. However a third of the 10% of most disabled older people receive neither disability benefits nor publicly-funded social care. Combining disability benefits and publicly-subsidised social care into a single system, as some have suggested, risks increasing the proportion of older people with disabilities receiving no support.