Disability allowance is not generally payable where a person is resident in an institution, where the cost of care and maintenance is being met in whole or in part by or on behalf of a health board. This provision has been a feature of the disability allowance, and of the former disabled person's maintenance allowance which it replaced. In cases where a person is in full-time institutional care the maintenance costs and an element of pocket money are met through funding from the health boards.
Since the take-over of the disability allowance scheme from the health boards, a number of measures have been introduced to progressively relax this disqualification. Disability allowance now continues to be paid for up to 13 weeks where the recipient goes into hospital or institutional care for the purposes of undergoing medical or other treatment of a temporary nature. In addition, disability allowance is paid at half-rate in the case of those in part-time residential care.