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Personal Independence Payment

23 May 2013

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.

Related to Personal Independence Payment

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I am a Motability customer – how does Personal Independence Payment affect me?

From 8 April 2013, the Government is introducing a new benefit called Personal Independence Payment (PIP) which will replace Disability Living Allowance (DLA) for disabled people aged between 16 and 64.

Motability customers currently use their DLA to pay for their vehicle leases. So, it is important that you are aware of the Government’s planned changes to disability benefits, which could affect your eligibility to use the Scheme.

Find out more about PIP

What if my allowance runs out before the end of the agreement?

If your higher rate mobility allowance is due to expire during your agreement, it is your responsibility to ensure your allowance is renewed on time with the Department for Work and Pensions (DWP) or Service Personnel and Veterans Agency (SPVA) so you can continue to use your Motability car.

Three months before your allowance is due to expire, if you have not already heard anything about your renewal, you should contact the DWP or SPVA and ask them to send you the information you need to renew your allowance.

If the DWP or SPVA decide you are no longer eligible for the HRMC DLA, we will not be able to continue to lease a vehicle to you. We will work with you to arrange for your vehicle to be returned. If you paid an Advance Payment, this may be refunded to you on a pro-rata basis.

Can I join Motability if I receive Armed Forces Independence Payment?

As part of the Welfare Reform Act 2012, a new allowance called Armed Forces Independence Payment (AFIP) is planned to be introduced. Those who receive this allowance will be eligible to join the Motability Scheme. If you receive this allowance and would like further information, please contact Customer Services on 0845 456 4566.

Can I get a car AND a scooter or powered wheelchair?

If your current Motability lease agreement is nearing the end of the lease, you will be able to place an order for a new Motability product (car, scooter or wheelchair). You must wait for the current contract to end before entering into another Motability agreement which uses your allowance. You are not able to have more than one lease agreement (i.e. more than one product or vehicle) with Motability at any time. So it is not possible to have a lease for a car and a wheelchair or scooter at the same time.

How do Motability Operations collect the payments?

Motability Operations receives the 4 weekly payment for the lease agreement as a direct transfer from the relevant benefits agency.

If I'm over 65, can I still join the Motability scheme?

If you are 65 and over and you receive the Higher Rate Mobility Component (HRMC) of the Disability Living Allowance (DLA) or the War Pensioners' Mobility Supplement (WPMS), and have at least 12 months remaining on your allowance, you're eligible to join the Scheme.

The Department for Work and Pensions (DWP) currently have no plans to introduce Personal Independence Payment (PIP) for those over the age of 65. If you are aged 65 or over on 8 April 2013, you will not be able to claim PIP and will continue to receive DLA for as long as you satisfy the eligibility criteria.

Unfortunately, the Attendance Allowance cannot be used to lease a car through Motability.

What age can I first receive the mobility allowance?

The Higher Rate Mobility Component (HRMC) of the Disability Living Allowance (DLA) can be awarded from the third birthday of the disabled person. It is possible to apply for the allowance before that date and as long as the eligibility criteria is met, the award will start from when the disabled person turns three. If a child under three has had the allowance confirmed, an application can be made up to three months before their third birthday, but the Motability agreement can't start until the allowance is awarded.

If a child above the age of three is in receipt of the HRMC then an application can be submitted to the Motability scheme. The application will need to be submitted in the name of the appointee who is responsible for the allowance.

Children who receive HRMC of DLA can remain on this benefit until they reach the age of 16 as long as they continue to satisfy the eligibility critera. The Department for Work and Pensions (DWP) will write to existing claimants before their 16th birthday to inform them when their DLA will end and how claim for Personal Independence Payment (PIP).

The DWP currently have no plans to introduce PIP for those under the age of 16.

Can any other allowance be used with Motability?

If you receive any of the following allowances and have at least 12 months award remaining, you can exchange all or part of the allowance to cover the cost of a Motability leasing agreement:

Higher Rate Mobility Component of Disability Living Allowance
Enhanced Rate of the Mobility Component of Personal Independence Payment (PIP)
War Pensioners’ Mobility Supplement (WPMS)
Armed Forces Independence Payment (AFIP).

Unfortunately, no other allowances can be used through Motability under any circumstances.

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