Personal Independence Payment
23 May 2013Personal Independence Payment
If you are an existing Motability customer, the Government’s plans to replace the Disability Living Allowance (DLA) for all recipients aged 16 to 64 with a new benefit called Personal Independence Payment (PIP), from 8 April 2013, may affect your eligibility to join the Scheme.
How PIP works howpipworks
Most Motability customers currently use their DLA to pay for their vehicle leases. Like DLA, PIP will have two components:
- a “daily living” component
- a “mobility" component
Each component will have two rates of payment:
- a “standard” rate
- an “enhanced” rate
You will be able to lease a Motability car by using the Enhanced Rate of the Mobility Component of PIP, which will be set at the same level as the Higher Rate Mobility Component of DLA. Like DLA, PIP will not be means-tested or taxable, and can be paid whether the claimant is working or not.
theplannedchanges The planned changes
PIP will replace DLA for disabled people aged between 16 and 64, even if they currently have an ‘indefinite’ or ‘lifetime’ DLA award.
- DLA will remain for disabled children until they reach the age of 16
- DLA will also continue to be available for those aged 65 and over on 8 April 2013
- Recipients of the War Pensioners’ Mobility Supplement are not affected by the planned changes
eligibilityforpip Eligibility for PIP
The Department for Work and Pensions (DWP) will award PIP based upon their assessment of an individual’s ability to carry out a range of everyday activities. Regulations to finalise the assessment criteria for PIP will not go before Parliament until early 2013. The eligibility criteria for PIP will be different from those for DLA today and existing DLA recipients will not be automatically transferred across to PIP. This means that even if you already receive DLA, you will need to make a claim for the new benefit when the DWP invite you to do so at some point between 2013 and 2018. The DWP will then assess your claim and decide what level of PIP benefit you should receive.
whenpipwillbeintroduced Invitation to apply for PIP
From October 2013, children reaching the age of 16 and existing DLA recipients whose fixed term DLA award ends, or who report a change in their condition, will be invited to apply for PIP. From October 2015, all other DLA recipients including those with 'indefinite' or 'lifetime' DLA awards will be invited to apply for PIP. The process of reassessing current DLA recipients should be complete by 2018.
If DWP invite you to apply for PIP, you will need to make a claim for the new PIP benefit within four weeks of being invited to do so. If you do not make a claim for PIP, DWP will suspend and then stop your DLA payments completely. It is very important that you do not ignore any communications from DWP; please read any letters you receive carefully and respond with any deadlines.
The changes explained above will apply to England, Wales and Scotland. The devolved administration in Northern Ireland is working with DWP to consider how changes will be introduced in Northern Ireland.
pipandthemotabilityscheme PIP and the Motability Scheme
The Motability Scheme will work with PIP in the same way as it does with DLA. Motability will continue to lease cars, powered wheelchairs and scooters to disabled people who receive either:
- The Higher Rate Mobility Component of DLA
- The Enhanced Rate of the Mobility Component of PIP (from April 2013) which will have the same value as the Higher Rate Mobility Component of DLA.
- The War Pensioners’ Mobility Supplement
If you are an existing DLA recipient who is awarded the Enhanced Rate of the Mobility Component of PIP, then your Motability lease will continue as you move from DLA to PIP.
If you are an existing DLA recipient who has not received the Enhanced Rate of the Mobility Component of PIP, you will not be eligible to use the Motability Scheme. If this happens:
- The leasing agreement will end
- Motability will arrange with you for the vehicle to be returned
- Motability refunds any Advance Payment on a pro-rata basis e.g. if the agreement ended after one year of a three year lease, two-thirds of the Advance Payment would be refunded
- Subject to terms and conditions, Motability may in some cases be able to offer the vehicle for sale to you
- You will not be charged for any early termination penalties or administration charges
Appealing the decision
Customers will be able to appeal to the DWP if they disagree with the decision. However, DWP will not continue to make DLA payments while an appeal is being processed and so Motability will not be able to leave the vehicle with you. If the appeal is successful, you will of course be eligible to re-join the Scheme.
nextsteps Next steps
DWP will send general information about PIP to all existing DLA claimants in February 2013. You do not need to make a claim for PIP until you are contacted by the DWP at some point between 2013 and 2018.
moreinformationaboutpip More information about PIP
More information about the DWP’s plans for DLA and PIP can be found on the Government’s website: https://www.gov.uk/personal-independence-paymentOpens in new window
Disability Rights UK (an independent charity) also produces a series of factsheets covering DLA and PIP and these are available from: www.disabilityrightsuk.org/how-we-can-help/benefits-information/factsheetsOpens in new window
Motability will also continue to update you as the DWP implementation plans are confirmed.