Disability living allowance claimants have risen by 30% – but for more complex reasons than Iain Duncan Smith would have you believe

Few people would argue with the government's desire to tackle benefit fraud. But more problematic is the persistent exaggeration of the scale of abuse within the system that accompanies any statement of reform.

The work and pensions secretary, Iain Duncan Smith, set out the need to reform disability living allowance (DLA) in an interview in the Telegraph, pointing out that the number of people claiming it had risen by 30% in the past few years.

The cost of DLA, which is intended to help people meet the extra costs of disability-related care and mobility, will soon cost around £13bn a year – more than unemployment benefit, he told the paper.

"A lot of that is down to the way the benefit was structured so that it was very loosely defined," Duncan Smith said.

Justifying the decision to introduce a reformed system designed to cut benefit payments by £2.24bn by 2015/16, resulting in 500,000 fewer claimants, he said the current system was riddled with abuse and fraud.

Disabled woman protests at DLA cuts. Photograph: Julian Makey/Rex Features

From next year more than two million people would be made to undergo a face-to-face assessment, to gauge their eligibility for the replacement benefit, personal independence payments (PIP), he said.

Anyone not close to the issue would probably skim the article and link the 30% rise in the cost of the benefit with Duncan Smith's comments on fraud and abuse, and assume that a reformed assessment system will weed out those who should not be receiving the payments.

Anyone who claims the benefit has a different perspective. The response from disability campaigners and charities has been furious, with anger focused, firstly, on the suggestion that the 30% rise in cost reflects a huge rise in fraudulent claims and, secondly, on the idea that regular reassessments will lead to a fairer allocation of benefits.

On the first point, campaigners point out that Duncan Smith has deliberately neglected to talk about significant demographic and medical changes that help explain the rise in claimant numbers.

On the second point, they point to the ongoing chaos associated with the reassessment of all incapacity benefit claimants (the parallel out-of-work benefit). The work capability assessment, outsourced to Atos, a private healthcare organisation, has made it harder to qualify for the benefit, but the assessment process has been highly erratic, with thousands of patients with chronic, lifelong disabilities being wrongly found fit for work.

Around 40% of those who are found fit for work are currently appealing against the decision, and about 40% of cases which go to tribunal are overturned in the claimant's favour.

Why has the DLA bill grown so dramatically? Neil Coyle, director of policy and campaigns with Disability Rights UK, says the biggest area of growth is down to the ageing population – people who have been granted DLA earlier in life can continue to claim when they pass pension age. Since this is a relatively new benefit, launched in 1992, the number of older people claiming it has ballooned, he says. There has also been a growth in younger claimants. "We have more disabled children surviving, which is a positive thing," he adds.

"What is disturbing is the suggestion that this is down to fraud and abuse. The DWP's own estimates put fraud at 0.5%. There isn't a 30% of abuse of DLA," he said.

"There has been a rise in verbal abuse of disabled people, which is inflamed by comments like these which suggest that people are on the fiddle, when actually they have a higher cost of living. The language used, and the assumption that there is a large level of fraud and abuse will inflame hostility towards disabled people."

Around one-third of disabled people already live in poverty, because of the higher cost of living associated with disability. With councils also making cuts to the amount they spend on supporting disabled people, Coyle warns that the savings-driven reform of DLA is likely to cause real hardship.

DLA is not an out-of-work benefit, and many people use the money to help subsidise the extra costs of getting to work. Disability Rights UK estimates that at least 25,000 people could be forced to give up their work as a result of the drive to restrict payments, pushing up unemployment payments.

A DWP spokesperson said: "DLA is an outdated benefit with £630m of overpayments and the vast majority of people getting the benefit for life without systematic checks to see if their condition has changed. We are replacing DLA with personal independence payment (PIP) and introducing a new face-to-face assessment and regular reviews – something missing under the current system."

Campaigners have pointed out that in fact many people already undergo repeated checks of their eligibility for the award, and it is only those who are deemed to have a lifetime condition who are exempt from these checks. The ongoing reassessment of claimants' eligibility for employment and support allowance (ESA, the replacement for incapacity benefit) has seen people with permanent, degenerative conditions such as, for example, blindness, called back annually for their condition to be checked.

Richard Hawkes, chief executive of Scope, which supports disabled people and their families, said the highly flawed nature of the current reassessment process for claimants' eligibility to ESA gave legitimate cause for alarm about the prospect of a new drive to reassess two million people to determine whether they should receive PIP. If the new assessments were anything like the current one, the process could result in hundreds of thousands of people being wrongly assessed, he warned.

The government is due to announce before the end of this month whether Atos will be given part of the contract for the new PIP assessments, which has a net value of between £300m and £1bn.

Reform, said Hawkes, should be driven by genuinely wanting to ensure that the right people get the right benefits, rather than in response to a sense of outrage that the bill has grown by 30%.

"It doesn't help the levels of fear and anxiety that lots of disabled people and their families have at the moment, as a result of the cumulative impact of the cuts," he said.

"We are in daily contact with people who fear that the gains made over the past 20 to 30 years risk being thrown away. People are worried that we are not going to continue to support disabled people living independently in the community."