If there is to be ‘means testing’ PIP/DLA, depending on how the government implement it, could shatter Motability’s business model, or at least cause them severe headaches.
Unless there is an absolute yes/no filter which either pays the full amount of DLA/PIP or not, any ‘means testing’ could mean different claimants being paid differing amounts depending on their financial circumstances – rather as occurs with UC or Income Related ESA etc. How much you receive depends on your financial circumstances.
Thus, despite someone being awarded the High Rate/Enhanced Mobility (or/and Care) Component of PIP/DLA they may not receive the full weekly amount of the benefit.
As such, this then shatters Motability’s business model, which is based on customers all receiving the full amount of the awarded component.
If people aren’t awarded the full weekly amount, Motability have a real headache and would seriously have to look at:
Allowing only those in receipt of the full weekly Mobility component of DLA/PIP being customers of the scheme. Or
Variable advance payments based upon how much individual customers actually receive per week in order to make up the full cost of the vehicle over 3 years – ultimately this could shoot up the AP’s exponentially. Also, the administration involved in working out the individual’s AP would be a significant administrational burden on Motability. Or
Going over to a ‘with risk’ business model – i.e., a hybrid of along with the DLA/PIP component, allowing customers to ‘top up’ the weekly payments from their own funds. Again, this would have to be worked out on an individual basis and could involve some form of credit worthiness check to ensure the customer can afford their ‘portion’ of the weekly payment. This also introduces risk to the Motability business model in that a customer can simply stop paying, so this risk would need to be priced in.
A similar scenario also occurs if DLA/PIP become taxable. Although taxable benefits/allowances are usually paid without tax deducted, if the sole source of someone’s income are taxable benefits (for example, full taxable State Pension and both full components of taxable DLA/PIP) it could put someone over the current tax threshold. So, again could lead to varying DLA/PIP payments with the same problems as above. It also puts a significant administration burden (and cost) on the DWP and HMRC in taxing the benefits.
As any of these (or other viable means testing/taxing options) could cause Motability severe headaches (and loss of customers and profits), you can bet your bottom dollar they are lobbying the government behind the scenes (probably via their patrons who are usually current/ex politicians?) in order to maintain the current status quo of paying the scheme allowances both non-means tested and also tax free.