One in three disabled people find themselves out of work within a year of starting a new job – while one in six people in work who become ‘limited in daily activities’ lose their jobs within a year.

These new statistics, derived from official survey data, highlight the need for a different approach to tackling poverty and raising the level of employment among disabled people – including people in work who develop limiting conditions such as rheumatism, diabetes, depression, back problems and progressive diseases such as multiple sclerosis.

The research for the Joseph Rowntree Foundation, by Tania Burchardt of the Centre for Analysis of Social Exclusion at the London School of Economics, shows that disabled people make up a growing proportion of the working-age population: between 12 and 16 per cent depending on the definition used. Yet overall employment rates among disabled people remain low, at around 40 per cent. Disabled people accounted for half of all working-age adults last year who were not employed but said they wanted a job.

Looking at movements in and out of work, the research shows that although employment rates for disabled people vary according to the economic cycle, they are always more volatile than those for the non-disabled. In addition:

• About 3 per cent of the working population each year become ‘limited in daily activities’, of whom half report continuing impairment a year later.
• One in six of these lose their jobs in the first year after becoming disabled.
• Six times the proportion of non-disabled people who are not employed get work as people who are disabled.
• A third of disabled people who find jobs are out of work a year later, compared with a fifth of non-disabled people starting work.

The analysis also found that once account was taken of care costs and other extra expense relating to disability, as many as half the disabled population had net incomes that were less than half the national average. Even without the adjustment, 40 per cent fell below this government-recognised poverty line.

Despite improvements since 1985 in benefits available to some disabled people, take-up was found to be low and greater severity of impairment was generally associated with lower income.

The study calls on policy makers to address the basic question of whether disabled people have enough income to secure a standard of living comparable to their non-disabled peers. It also recommends that the New Deal for Disabled People and other government policies to tackle social exclusion should offer more support to disabled people starting jobs and to people who become disabled while in work.

Tania Burchardt said: “Too little attention has been paid to movements between employment and non-employment and between being non-disabled and becoming disabled. For example, benefit rules should help people stay in work by being flexible when people’s conditions fluctuate – as with mental illness or degenerative diseases.”

She added: “Last year’s disability benefit reforms raised support for those who are employed and for some of those more obviously unable to work. But these were one-off increases and benefits for disabled people who are unemployed, non-employed partners, or have retired early were pared back. The living standards of disabled people, especially those with more severe impairments, will continue to be well below the rest of society, unless benefit levels are linked to national prosperity.”