The Motability car scheme has won praise after announcing that it will hand £2,000 to every disabled person who has their vehicle taken away after being reassessed for the government’s new personal independence payment (PIP).
It is one of a series of measures designed to ease the pain of those who will be assessed as no longer eligible for the higher rate of mobility support, and so also no longer eligible for the Motability scheme.
The Department for Work and Pensions is to reassess about two million disabled people aged between 16 and 64 who currently claim disability living allowance (DLA) over the next five years.
Motability believes that – as the reassessment process only applies to working-age claimants – about 360,000 of its 620,000 customers will be affected.
Because the reassessment process does not start until later this month, the first cases of customers losing their vehicles are not expected until early next year.
One Labour peer has estimated that 180,000 disabled people could have their Motability vehicles repossessed in the transition from DLA to PIP, while Motability has suggested that up to 100,000 existing customers could lose their eligibility in the three years to 2016.
Among the package of measures announced by Motability is a one-off "transitional support" payment of £2,000 to anyone who loses their vehicle after joining the scheme before January 2013, which is aimed at helping them buy a used car as a replacement if they want to do so.
Those who joined the scheme this year, and were therefore aware that they could lose their Motability eligibility because of the PIP changes, will receive £1,000.
DWP has already announced that DLA payments will continue for four weeks once the PIP decision has been made, but Motability says it will allow customers to keep their vehicles for an additional three weeks before they need to be returned to a dealership.
It is also working with its suppliers to ensure customers have access to information on services such as insurance, breakdown cover and buying a car.
Customers will be offered the chance to buy their existing vehicle, and if they do not want to do so will be given help with the cost of transferring any adaptations from their Motability vehicle to a replacement.
Any customers with wheelchair-accessible vehicles – who are less likely to lose eligibility because of their high support needs – will be dealt with "on a case by case basis" and will be able to keep their vehicle for up to six months, with Motability "where appropriate, enabling them to retain their current vehicle".
There will also be a "package of support and advice" for customers leasing a scooter or powered wheelchair, with "the objective of allowing them to retain their current product wherever possible".
Helen Dolphin, director of policy and campaigns for Disabled Motoring UK, said it was a "very generous package" and would provide a "buffer" for any Motability customers who lose their higher rate eligibility in the move from DLA to PIP.
She said: "Motability didn’t have to do what they have done at all. I think they have understood the impact of losing their car allowance to disabled customers.
"They have pulled out all the stops to make the changeover as smooth as they can. I think they have calculated what they can afford without having any detrimental effects on current users."
A Motability spokeswoman said the organisation planned to fund the support package by drawing on some of its capital reserves.
She said: "We have spent the past two years analysing and researching the impact of PIP and consulting with customers, disability organisations, suppliers, as well as DWP.
"In particular, we have considered the degree to which we can assist those customers who will lose their eligibility to remain on the scheme when they are first reassessed for the new benefit.
"Most of these former customers will have relied on the scheme for many years and expected to continue to do so into the future.
"The unexpected loss of benefits and eligibility to use the scheme, even though their disability remains the same, will present them with a difficult transition."
She said customers should be able to buy a used car that is about seven to 10 years old, for between £1,750 and £2,000, while the extra three weeks should allow them "some time to make alternative arrangements".
She added: "The purpose of Motability is to support the mobility of disabled people and we are pleased that we can offer this support and advice to our former customers as they leave the scheme and look to make alternative arrangements in the wider market."
But she warned that Motability would have to keep the support package "under constant review" during the five-year PIP reassessment programme, "taking account of economic developments, any changes which the government may make to PIP following their review during 2014, as well as feedback from all of our stakeholders".