The Social Security (Incapacity for Work) Act 1994
| Date | 01 July 1995 |
| DOI | http://doi.org/10.1111/j.1468-2230.1995.tb02028.x |
| Published date | 01 July 1995 |
| Author | Nick Wikeley |
LEGISLATION
The
Social Security (Incapacity for Work) Act
1994
Nick Wikeley
*
The Social Security (Incapacity for Work) Act
1994l
is the most radical piece of
social security legislation since the Social Security Act
1986.
The Act abolishes
sickness and invalidity benefits and replaces them with a new and less generous
benefit, incapacity benefit. This article starts by outlining the pre-April
1995
position before considering the background to the new benefit and examining its
structure and scope. The conclusion seeks to put these changes in the context of
other recent and impending developments in social security provision.
Benefits
for
incapacity
for
work
before
April
1995
In the Beveridge scheme, sickness benefit was paid at a flat rate (equal in value to
unemployment benefit) for
so
long as a person was incapable of work. In
1971
the
then Conservative government introduced invalidity benefit (IVB)
,
payable after
six
months of incapacity.2 The role of sickness benefit was further marginalised
with the enactment of the statutory sick pay
(SSP)
scheme in
1983.
Since then,
SSP
has constituted the principal benefit for those off work due to short-term sickness.
SSP
is now payable to eligible employees for
28
weeks.3 Before April
1995,
incapacitated claimants who did not qualify for
SSP
were entitled to sickness
benefit for the same period if they had an adequate national insurance re~ord.~
Where a person who had been in receipt of
SSP
or sickness benefit remained
incapable of work after
28
weeks, he or she would then have to move onto IVB,5
which would be payable until the person became fit to work again or until five
years after pensionable age.6 Strictly speaking, IVB was a composite of three
separate elements. The first was the basic invalidity pen~ion,~ paid at the same
rate as the state retirement pension and which could be supplemented by additions
*Professor of Law, University of Southampton.
Royal Assent was given on
5
July 1994 and the Act came into force fully on 13 April 1995: S11994
No
2926. The Act is abbreviated in footnotes to SS(1FW)A 1994.
See
Ogus,
Barendt and Wikeley,
fie
Law
ofSociaZ
Security
(London: Butterworths, 4th ed, 1995)
Social Security Contributions and Benefits Act (SSCBA) 1992, Part
XI.
Since the Statutory Sick Pay
Act 1994, most employers have had to meet the full cost of SSP. The ‘small employers’ exemption has
now been replaced by a rebate
for
all employers whose SSP payments exceed
13
per cent of their
liability for Class 1 National Insurance contributions in any one month:
SI
1995 No 512.
SSCBA 1992,
s
31.
Some claimants with an inadequate contributions record might qualify for severe disablement
allowance (SDA):
ibid
s
68. The rules governing SDA are subject merely to consequential
amendments by the SSOA 1994,
s
9, and are not discussed further here.
A
Social Security Commissioner has held that the linkage of
IVB
with pensionable age constitutes
unlawful discrimination against women:
CS/27/1991
(Graham);
this matter has since been referred by
the Court
of
Appeal to the
ECJ.
Some
40,OOO
‘Graham
look-alikes’ have had IVB suspended pending
the outcome
of
this litigation: HC Deb vol254, col 734w (16 February 1995).
SSCBA 1992,
s
33.
pp 151
-
152.
@
The
Modern
Law
Review Limited
1995
(MLR
58:4,
July).
Published
by Blackwell
Publishers,
108
Cowley
Road, Oxford
OX4
1JF
and
238
Main
Street,
Cambridge, MA
02142,
USA.
523
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