Around 500,000 disabled people are expected to lose out when the Disability Living Allowance (DLA) is scrapped, a new report has claimed.
There has been a £500 million drop in disability support since George Osborne's 2010 Emergency Budget, according to the report, authored by The Hardest Hit, a coalition of 90 disabled people's organisations and charities.
The report's research, largely based around surveys and interviews with both disabled claimants and welfare officers, showed that 65% of respondents believe they would have to give up work without the support of the DLA.
The figures suggested the loss of employees from the workforce could be as high as 50,400, resulting in a possible reduction of £293.3 million in tax receipts to the Treasury. The report pointed out that variables make calculating exact figures impossible.
The Department for Work and Pensions had "failed to consider" knock on effects of scrapping the DLA, the report claimed, citing examples such as increased burdens on council funded care if 500,000 people were to lose benefits. It argued the £2 billion in savings expected by the Government from ending DLA is "overestimated" by potentially £1.6 billion.
Increased costs such as implementation; lost tax revenue; and increased dependence on council services, were predicted by the report to largely cancel out hoped for savings.
The government's disability assessment process was also criticised by the report, with 65% of interviewees saying that disability assessors "did not understand their condition", and 87% of welfare advisors arguing "constant re-assessments for benefits are damaging people's health".
The report highlighted the fact that disabled people are "twice as likely to live in poverty" and only a small loss of income can "tip people with a disability into greater dependence on health and social care services or friends and family".
Jaspal Dhani, chief executive of the UK Disabled People's Council (UKDPC) and co-chair of the Hardest Hit campaign, said:
"Disabled people, those with long-term conditions and their families are already at risk of hardship and face massive barriers to getting into work and education. Cuts to the support they depend upon risk pushing them into poverty, debt and isolation.
"The Chancellor has just announced a further £10 billion cut to the welfare budget. With £9 billion having already been removed from disability benefits and services in this Parliament, disabled people are already at a tipping point.
"The government has some urgent choices to make, but must rule out targeting disabled people for further spending cuts in the next Budget and Comprehensive Spending Review."
Speaking at Prime Minister's Questions on Wednesday, David Cameron said that "no recipients will lose out, unless their circumstances change" and that "the money that is going into disability benefit will not go down under universal credit; it will go up".
Highlighting the government's decision to focus "on the most disabled", the Prime Minister said they had chosen to "increase the amount that we give to the most severely disabled children, and there will be a new lower amount for less disabled people".
Mr Cameron's statement appears at odds with the findings of the report, which argued that 450,000 disabled people "could stand to lose out under Universal Credit".
The report claimed that "thousands of very sick and disabled people are being wrongly labelled fit to work" under the government's new scheme, and it is unclear whether this counts as the "changing circumstances" to which Mr Cameron referred.
Richard Hawkes, chief executive of the disability charity Scope, said: "Disabled people and their families are at breaking point because their vital support is being stripped away.
"How many more wake-up calls do we need? Report after report tells the same damning story. Welfare cuts will have a devastating impact on people's lives.
"It's time to start focusing on what support and services disabled people need to live decent lives, rather than what can be taken away.
"The new Disability Minister wants to be a 'champion for disabled people'."
Minister for Disabled People, Esther McVey said: "There's a lot of misleading stories about the impact of our welfare reforms on disabled people.
"The truth is - as the Paralympics showed - the UK continues to be a world-leader in the rights for disabled people - as so wonderfully showcased by the Paralympics.
"However too often under the current system we are spending money on overpayments where people's conditions have changed, with £630m a year on DLA alone.
"Our welfare reforms will ensure the billions we spend, better reflect today's understanding of disability and offer the targeted support disabled people need to live independent lives."
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