On 13 April this year, incapacity benefit (ICB) replaced sickness benefit (SB) and invalidity benefit (IVB) for people who are too ill or disabled to work.

The old system Prior to 13 April, SB, a contributory benefit, was paid for the first 28 weeks of incapacity for work if the claimant was not entitled to statutory sick pay (SSP).

SSP is, of course, paid by employers not the government.

If the incapacity continued beyond 28 weeks, IVB was then generally paid (whether the claimant had been getting SB or SSP).

The test for incapacity was: is the person capable of doing work which he or she could reasonably be expected to do? Political background The government is conducting a long-term review of social security spending.

Two years ago it expressed concern about the growth in the numbers of people receiving IVB (about 1.8 million at the time of its abolition, up from 740,000 in 1983).

There are, in fact, cogent demographic reasons for the growth but the government decided the bill had to be cut.

ICB was the result.

The government expects the new scheme eventually to cost about £1.7 billion a year less than the old.

It has estimated that some 240,000 SB/IVB claimants will lose benefit over the next two to three years, and that each year some 70,000 new claimants who would have been entitled to the old benefits will be refused ICB.

In addition, claimants who do qualify will get less benefit.

This is partly because of tighter eligibility conditions for the additional benefit paid for child and adult dependants, and the age-related additional benefit, and partly because it will generally take 52 weeks of incapacity, instead of 28 weeks, to get the maximum amount of benefit.

Also, ICB is often taxable, whereas the old benefits were not.

Basic features o f ICB The rules are complicated and only a broad outline can be given in this article.

As ever with social security law, every rule has an exception.

The position sometimes differs according to whether or not someone was getting one of the old benefits on 12 April.

The transitional protection rules are outlined towards the end of the article.

The major difference with the old scheme lies in the way incapacity is judged.

There are new tests (see below).

ICB is a contributory benefit.

Except in the case of some widows and widowers, claimants must satisfy the NI contribution conditions, in particular for the two (tax) years prior to the year of the claim.

There is no longer an exemption for people rendered incapable of work by an industrial accident or prescribed disease (although if they were entitled to SB or IVB on 12 April, they do have transitional protection).

Like SB and IVB, ICB is not means tested.

The claimant's financial position has no bearing on his or her entitlement.

SSP continues to be paid for the first 28 weeks of incapacity where the claimant is entitled to it (broadly if he or she is an employee earning at least £58 a week) and only after that can he or she move on to ICB.

If there is no entitlement to SSP, ICB is payable from the outset of the incapacity (subject to what is said below about the 'waiting days').

Strictly speaking, ICB is paid for a 'day of incapacity for work' falling within a 'period of incapacity for work' ('PIW').

Periods of entitlement to maternity benefits can be days of incapacity for work.

A PIW is, broadly, four or more consecutive days (s.30C(1)(b) of the Social Security Contributions and Benefits Act 1992 (SSCBA)).

Sometimes, two PIWs are linked to form one period.

ICB is not paid during the first three days of a PIW (the 'waiting days'), but this does not apply if the claimant was recently entitled to SSP.

In certain circumstances -- for example, if the incapacity results from misconduct -- someone can be disqualified from receiving ICB for up to six weeks.

In addition there are special rules for people going abroad and for prisoners.

New incapacity tests There are, in fact, two tests for assessing incapacity for work: (a) the 'own occupation' test and (b) the 'all-work' test.

'Own occupation' test This applies if someone has a regular occupation at the time he or she falls ill.

It applies if he or she did paid work in a particular occupation for at least 16 hours a week for more than eight out of the 21 weeks immediately before he or she claims ICB.

It does not matter if he or she had more than one employer as long as the jobs were of the same kind.

And, self-employed work counts.

If the test applies, incapacity is judged with reference to the claimant's ability to do work which he 'could reasonably be expected to do in the course of the occupation in which he was...engaged' (s.171B(2) of the SSCBA).

The test applies for the first 28 weeks of a claim.

Some people are exempt (see below).

'All-work' test It is the 'all work' test which has aroused most of the controversy.

It applies after 28 weeks, if the claimant satisfied the 'own occupation' test for that period, or from the beginning if he or she did not.

Many claimants are exempt from the test (see below).

The test is a functional one.

It seeks to judge, objectively, a person's capacity for work by assessing his or her ability to do certain activities.

Account is no longer taken of a person's ability to perform real jobs.

In particular, no account is taken of factors such as age, training, or work experi ence.

The activities in question are set out in the schedule to the Social Security (Incapacity for Work) Regulations 1995 (SI 95/311) (the IFW Regs).

There are 18 different activities listed, 14 to test physical disabilities and four mental disabilities.

Examples of the former are 'walking up and down stairs' and 'reaching', and of the latter 'daily living' and 'interaction with other people'.

Against each activity are listed a number of 'descriptors'.

'Descriptors' are particular ways in which a person may be unable to carry out the activity in question, or carry it out properly.

There are up to eight descriptors for each activity.

Each is given a certain number of points, up to a maximum of 15.

So, against 'walking up and down stairs' one finds, for example, 'cannot walk up and down a flight of 12 stairs without holding on' (three points); for 'reaching' one of the descriptors is 'cannot raise either arm to his head to put on a hat' (15 points); and one indication that you have problems with 'daily living' is if you 'need alcohol before midday' (two points).

For physical conditions, only one descriptor can be counted per activity (and, in fact, only one for the two walking activities).

If more than one descriptor relating to a particular activity (or the two walking activities) is relevant, you take the higher or highest.

If the total of the relevant descriptors comes to 15 points or more, the claimant fails the 'all-work' test and is deemed incapable of work; if it comes to less than 15, he or she is deemed capable, whatever the reality.

For mental conditions, by contrast, you total all relevant descriptors for all relevant activities.

The magic total in this case is only ten points.

However, no mental descriptor is worth more than two points, so the total may be harder to reach.

It is possible to combine descriptors for physical and mental conditions.

In this event, a total of 15 must be reached with a minimum of six points from the 'mental' activities (but if that threshold of six points is reached then, rather confusingly, the 'mental' score becomes worth at least nine).

The impact of work on eligibility Because of the nature of the 'all-work' test, it is possible to fail it but still actually be capable of some work (just as it is perfectly possible to be unfit for work and yet 'pass' the test).

For example, someone may score 15 points, and therefore fail the test, because he 'cannot raise either arm to his head to put on a hat' and yet be capable of carrying out an office job.

Provision is therefore made to treat as capable anyone who does actually work -- whether the work is paid or unpaid.

This only applies for weeks in which the work is done.

Moreover, there are several types of work which can be done without jeopardising benefit (see reg 17 of the IFW regs).

For example: caring for a close relative; voluntary work for less than 16 hours a week; and therapeutic work: the work must be done on the advice of a doctor and be for less than £44, and an average of 16 hours, a week, and must either have a beneficial effect on the particular illness (or disability) causing the incapacity for work or be part of a treatment programme or a sheltered work scheme for people with disabilities.

People who were doing therapeutic work on 12 April may continue to do so under the more favourable old rules.

Application of the tests to other benefits The incapacity tests do not only apply to ICB.

They also apply to other benefits where capacity for work is relevant (see reg 19 IFW regs).

So, they apply to severe disable ment allowance (SDA), which is a benefit for severely disabled people who have been unable to work for at least 28 weeks and who do not satisfy the contribution conditions; and to claimants who apply for a disability premium on top of their basic income support, housing benefit or council tax benefit because of their incapacity for work.

Exemptions from both tests Certain categories of people are exempt from either test and are treated as being incapable of work, whatever the reality (see regs 11 to 14 of the IFW regs): people who are carrying an infectious or contagious disease (or who have been in contact with a carrier); in-patients at hospitals or similar institutions; people receiving certain regular treatment such as kidney dialysis; and certain pregnant women.

Exemption from the 'all work' test Again, people who are exempt from just the 'all work' test are treated as being incapable of work, even if they are in fact capable.

They fall into these broad categories: some people who were entitled to certain benefits on 12 April 1995, eg, people aged 58 or over on 13 April who had not been capable of work for more than eight continuous weeks between 1 December 1993 and 12 April 1995 and (inter alia) were entitled to IVB on both the earlier and later dates; people getting the highest rate care component of disability living allowance (DLA) and certain other disability benefits; people who are terminally ill and are expected to die within the next six months; and people suffering from specified conditions, eg, registered blind people.

In the case of some of the specified conditions, eg, some forms of paralysis or severe mental illness, a doctor from the Benefits Agency Medical Service (BAMS) must certify that the claimant is suffering from the condition.

Detailed published guidance is given to the BAMS doctors.

In addition, people who pass the 'all work' test -- because they score less than 10 or 15 points -- can nevertheless be treated as incapable of work in certain 'exceptional' circumstances.

An example is where, because someone is suffering from a particular illness, work would represent a 'substantial risk to the physical or mental health of any person [including presumably himself]'.

In all the listed cases it is the opinion of a BAMS doctor which counts.