Significant Overhaul in UK Welfare System Targets Disability Benefits
The UK government, led by Work and Pensions Secretary Liz Kendall, has rolled out a sweeping welfare reform focused on disability benefits. These changes, part of a wider strategy to overhaul the social support system, are anticipated to save over £5 billion by 2029-30. Such a massive reduction is seen as one of the largest welfare cuts since 2015.
One of the central aspects of this plan involves the redistribution of Universal Credit (UC) benefits. Current recipients of UC's health component, accounting for about 2.4 million families, will see an average annual reduction of £280 by the end of the decade. By contrast, 4.5 million other UC claimants will benefit from an increase of £150 each year. This approach aims to streamline benefits but raises questions about its fairness, particularly as new UC claimants will automatically receive a reduced health element, slashing a significant £2,500 off their annual support.
Linking Benefits to PIP and Tightening Criteria
Another major pivot in the reforms is connecting the UC health element to Personal Independence Payment (PIP) eligibility. From 2028-29, only those qualifying for PIP will access the health element, excluding around 900,000 individuals who presently partake in the UC health benefits but don’t meet PIP standards. The effect will be a sharp annual income cut of £2,400 for these individuals.
While this shift leaves many facing financial uncertainty, not all changes are cuts. The standard UC allowance will see a notable increase, going up by £775 annually for individuals over 25, marking a significant leap surpassing inflation rates historically set as far back as 1980.
However, as eligibility for PIP tightens, applicants will now need at least four points on a daily living activity score—a change likely to challenge those with lower-moderate needs, as the system increasingly favors those with more severe challenges.
A strategic transformation includes canceling the current Work Capability Assessments. Instead, a streamlined assessment aligned with PIP criteria will be introduced, focusing significantly on how conditions affect daily living, rather than strictly evaluating work capacities.
Critics are particularly wary of these changes. Over 100 charities, including Scope and Parkinson’s UK, raise alarms on the potential rise in poverty among disabled communities. Charles Gillies, representing the Disability Benefits Consortium, has condemned these cuts as both “immoral and devastating,” pointing out the looming threats to both health and financial stability.
Despite these criticisms, the government reinforces its commitment to heightened employment support, allocating £1 billion annually for customized employment assistance and new premiums for those with severe lifelong conditions. They also introduce the “Right to Try Guarantee,” allowing disabled individuals the flexibility to seek jobs without an immediate loss of benefits, in hopes of encouraging more to enter the workforce.
Tom Waters, from the Institute for Fiscal Studies, notes the gamble behind these plans. They could potentially misfire by targeting those least likely to respond to work incentives while simultaneously diminishing essential support for many.
