What changes have been announced to the benefits system?
Some elements of the reforms have been welcomed and others criticised.
The Government has announced a raft of changes to the welfare system which it said will help support people into work.
The reaction to the various measures has been mixed, with some parts being welcomed and others branded “draconian cuts that will drive more disabled people into poverty”.
– What is happening with universal credit (UC)?
It is aimed at helping people on a low income or those who are out of work.
The Government said it will introduce an above-inflation rise to the standard UC allowance by 2029/30 – adding £775 in cash terms annually. But the health element allowance will be almost halved for new claimants from April next year while those already claiming will have their amount frozen until 2029/2030.
The Institute for Fiscal Studies (IFS) said the reforms will see a “substantial redistribution across benefit recipients”.
They estimated that some 2.4 million families currently getting the health element of UC will get £280 less a year in 2029-30, while 4.5 million families on UC will get £150 more a year in 2029-30.
The reduction for new claimants to the health element of UC would be around £2,500 less a year, the IFS added.
The test which determines someone’s eligibility for UC health – the work capability assessment – is to be scrapped in 2028, having been described by Work and Pensions Secretary Liz Kendall as “complex, time consuming and often stressful for claimants”.
The IFS said this change could see some 600,000 people at risk of being worse off by £2,400 a year.
The Government said it will legislate for a so-called “right to try”, which will allow people to try work without the fear their benefits will automatically be put at risk.
– What is happening with personal independence payments (Pip)?
The payment is aimed at helping with some of the extra costs caused by long-term disability and ill health and is not dependent on whether someone is working or not.
Some people will lose their Pip entitlement, the Government said, as the process to qualify is tightened in an effort to focus the disability benefit on “those with higher needs”.
The Government said it will bring in a new eligibility requirement for a minimum score of at least four points regarding how much help the person needs with everyday tasks (the daily living element of the benefit).
No change is being proposed for the mobility element, which looks at how much help someone needs in getting around.
The Government confirmed the change “means that people who only score the lowest points on each of the PIP daily living activities will lose their entitlement in future”.
The IFS said the impact of that change is difficult to predict “as the way claimants approach the assessment is likely to change in response”.
It pointed out that previous governments attempting similar reforms “have found that they have saved much less than hoped”.
The Government also committed to not putting UC claimants who have the most severe disabilities and health conditions that will never improve through the ordeal of being reassessed for benefits “to give them the confidence and dignity they deserve”.
However the Government said it plans to increase the number of face-to-face assessments in Pip and under the current work capability assessment in a bid to “give confidence to claimants and taxpayers that they’re being done properly”.
– What about young people?
The latest figures showed there were 109,436 people aged 16 to 21 on UC health in December 2024.
This was up from 97,305 a year earlier in December 2023 and more than double the 42,154 in December 2019.
The Government said it will also consult on raising the age at which people can claim Pip from 16 to 18.
Prime Minister Sir Keir Starmer said that “millions of people – especially young people” with the potential to work have “instead become trapped out of work and abandoned by the system”.
He added: “It would be morally bankrupt to let their life chances waste away.”
– What has the reaction been?
But the National Autistic Society criticised the tightening of Pip eligibility, saying this will make assessments “even more difficult, pushing more autistic people into poverty”.
Anti-poverty charity Turn2us said “the cuts will harm more people than they help”, with a restriction on Pip and reduced access to UC health likely to “create hardship, erode trust and cost us more in the long run”.
National disability charity Sense said disabled people “need greater support from the Government, not draconian cuts that will drive more disabled people into poverty”, while disability equality charity Scope accused the Government of “choosing to penalise some of the poorest people in our society” and “ripping £5 billion out of the system”.
The Resolution Foundation think tank said while the measures announced “should encourage more people into work”, any gains in living standards “risk being completely overshadowed by the scale of income losses faced by those who will receive reduced or no support at all – irrespective of whether they’re able to work”.
Tom Waters, an associate director at the IFS, said: “The hope is more employment and fewer people in the disability and incapacity benefit system.
“The risk is that it’s precisely the individuals receiving health-related benefits that are least responsive to financial incentives to work, and perhaps most in need of extra financial support.”
