As part of its welfare reform programme, the Government has started to replace Disability Living Allowance (DLA) with a new benefit called Personal Independence Payment (PIP) for disabled people aged between 16 and 64.
How PIP works
Most Motability customers currently use their DLA to pay for their vehicle leases. Like DLA, PIP has two components:
- a “daily living” component
- a “mobility" component
Each component has two rates of payment:
- a “standard” rate
- an “enhanced” rate
You are able to lease a Motability car by using the Enhanced Rate of the Mobility Component of PIP, which is set at the same amount as the Higher Rate Mobility Component of DLA. Like DLA, PIP is not means-tested or taxable, and can be paid whether the claimant is working or not.
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.
Eligibility for PIP
The Department for Work and Pensions (DWP) awards PIP based upon their assessment of an individual’s ability to carry out a range of everyday activities. The eligibility criteria for PIP is 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 invites you to do so at some point between now and 2018. The DWP will then assess your claim and decide what level of PIP benefit you should receive.
Invitation to apply for PIP
Since 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, have started to 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 the 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, the DWP will suspend and then stop your DLA payments completely. It is very important that you do not ignore any communications from the 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 the DWP to consider how changes will be introduced in Northern Ireland.
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
- The War Pensioners’ Mobility Supplement
- The Armed Forces Independence Payment.
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
- You may be eligible for our one-off transitional package of financial support and advice regarding alternative mobility arrangements
- 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.
You do not need to make a claim for PIP until you are contacted by the DWP at some point between now and 2018. It’s important that the Department for Work and Pensions has your up to date contact details. If your details have changed, you can let them know by calling 03457 123 456.
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-payment
Disability Rights UK (an independent charity) has produced a guide to claiming PIP Will download a resource(PDF 1MB) (PDF 1.8 MB) , you can find this and other factsheets covering DLA and PIP at: www.disabilityrightsuk.org/how-we-can-help/benefits-information/factsheets/factsheets-alphabetical-order