Would reforms to the disability and financial eligibility criteria for disability benefits for older people in Great Britain improve targeting? An analysis exploiting estimates of latent disability and disability costs

In Great Britain older people may qualify for non means-tested disability related social security benefits, and receipt of these benefits can in turn generate higher entitlements to means-tested benefits. Some have claimed that the non means-tested components are not well targeted on those with the greatest disability or financial need. Using estimates of latent disability and of the extra living costs that older disabled people face, we analyse some potential reforms to disability benefits. We consider how an assessment of the targeting of the existing system is affected by taking account of disability costs and whether targeting is improved by a shift towards more means testing within the system. Initial results suggest that once disability costs are taken into account, disability benefits are already well-targeted on those in most financial need. The substantial proportion of the most severely disabled who appear not to be receiving any disability benefits is potentially of more concern.