Here, we explain all the changes which have been put forward by the Government and the DWP for the disability benefit PIP and Universal Credit last week and how they could impact you
The Department for Work and Pensions (DWP) is reportedly set to reveal £6billion worth of potential benefit cuts – but what could these changes mean for you?
The DWP is said to have drawn up a raft of measures which was leaked to ITV News last week. These measures aim to push more people claiming disability benefits into work – even if they have extreme and serious health issues. The DWP plans, which have prompted outrage from disabled people, and some members of the Labour Party, will impose stricter criteria for Personal Independence Payments (PIP), freeze payments in line with inflation, and alter the calculation of Universal Credit.
Pensions Secretary Liz Kendall says the changes will help fix the “broken” welfare system and get more people into work. The DWP says the changes will save more than £6billion by the end of the decade. Chancellor Rachel Reeves will be revealing the party’s plans in the Spring forecast on March 26 and will come alongside a Green Paper from the DWP outlining the proposals. Here we explain what changes have been put forward and how they could impact you.
The government put forward the plans late on Friday evening (
Getty Images)
Changes to PIP eligibility
According to the ITV report, the Government wants to make it harder for people to claim the disability benefit. Introduced in 2013, PIP is a benefit paid by the DWP to people who have long-term mental or physical health conditions or disabilities. According to the latest data, around 3.6million people claim it in the UK.
One of the biggest misconceptions about PIP is that it’s an out-of-work benefit. It is not, and you can claim it if you are working and have savings. The payments aim to help with the added costs that having a disability or health condition can bring. The amount of PIP you get is dependent on how your condition affects your daily life and your ability to do day to day tasks and means that a broad range of conditions and disabilities can be eligible
The Government has not confirmed how the eligibility criteria will change. However, charities and claimants have pointed out that the benefit is already difficult to qualify for. Last year, the DWP rejected over 330,000 PIP claims. To be granted the benefit, you need undergo an assessment by the DWP.
Usually, a healthcare professional will carry out the assessment and, using this information – alongside the information you gave on your original PIP claim form – write a report about it. They will then send this off to the DWP, who will then decide whether you are able to claim or not.
The Independent also revealed that 1,300 people had died before receiving their PIP claim decision from the DWP. According to data from a Freedom of Information (FOI) request, PIP applicants faced an average wait of almost four months to have their claims processed. One man, 40, from Northern Ireland, first applied for PIP in June 2022 and is still waiting for the benefit decision. The man, who had been diagnosed with chronic fatigue syndrome caused by an underactive thyroid, was told by a tribunal in August 2024 that his claim would be reassessed after having it initially rejected – although he is still waiting.
Freezing PIP payments
PIP payments are also set to be cut in real terms next year by freezing them so they do not rise in line with inflation. In total, the Government expects that changes to PIP will save around £5billion. PIP – which is paid every four weeks – is made up of two components – a daily living rate and a mobility rate – and you can be entitled to both or just one of these. These components are then split again, into the standard rate and the enhanced rate. How much you get is also rsing from April by 1.7% like other DWP benefits – here is how PIP rates are changing this year:
Daily Living
- Lower rate: £72.65 a week to £73.90 a week
- Higher rate: £108.55 a week to £110.40 a week
Mobility
- Lower rate: £28.70 a week to £29.20 a week
- Higher rate: £75.75 a week to £77.05 a week
James Taylor, Executive Director of strategy at disability equality charity Scope said: “Ripping PIP away will be catastrophic for disabled people. PIP exists because life costs more if you are disabled. Those costs won’t disappear if the Government squeezes eligibility. Many disabled people use PIP to get to and from work and to pay for essential equipment like mobility aids.
“Making it harder to get benefits will just push even more disabled people into poverty, not into jobs. The Chancellor has a choice – cut benefits and increase poverty, or invest in an equal future for disabled people. Making the wrong choice will have a devastating impact on disabled people and their families.”
Laura Thomas, Head of Policy at the MS Society, sdded: “We’re deeply concerned at the suggestion of welfare cuts and urge the Government not to take such a cruel and harmful approach. People with MS have told us they’ve been filled with worry in recent weeks about what these changes could mean for them.
“MS can be debilitating, exhausting and unpredictable. And we know that already too many people with the condition are struggling to pay for essentials like food and medications with the benefits they do receive. So any cuts will inevitably increase poverty and destitution, and worsen health, amongst a community who are already likely to be struggling.”
Changes to Universal Credit elements
There are also changes to Universal Credit, which is paid to both people both in work and out. The basic rate of Universal Credit – which is between £311.68 and £617.60 a month – is set to be increased, but only for those searching for work or in work. People who have been judged unfit for work through a Work Capability Assessment (WCA) will have their payments cut.
Currently, claimants who have health conditions or disabilities have to undergo a Work Capability Assessment to decide whether they’re capable of working and if they’re eligible for cash top-ups when they claim Universal Credit. These top-up payments are called the limited capability for work and work-related activity (LCWRA) payment and are currently worth around £390 a month.
The Government announced in its Autumn Statement that it was going to make changes to the Work Capability Assessment. Under the proposed changes, the LCWRA payment will be scrapped and replaced with a new health element. Although the new announcements sound like this payment will be cut entirely.
Louise Murphy, Senior Economist at the Resolution Foundation, said: “This package combines sensible reforms to incentivise and support people with poor health back towards work, with hugely controversial cuts to non-work-related disability benefits.
“Freezing PIP next year will result in a real-terms income loss for around four million people, 70% of whom are in low-to-middle income households. The scale of eligibility restrictions required to save £5billion will change who the Government considers to be disabled. It must tread very carefully on this.”
The DWP has not confirmed the changes being reported, but commenting on Labour’s Back to Work plan, a DWP spokesperson said: “We have been clear that the current welfare system is broken and needs reform, so that it helps long-term sick and disabled people who can work to find employment, and ensures people receive the support they need, while ensuring fairness for the taxpayer.
“Without reform more people will be locked out of jobs, despite many wanting to work. That is not just bad for the economy, it’s bad for people too. We have a duty to get the welfare bill on a more sustainable path and we will achieve that through meaningful, principled reforms rather than arbitrary cuts to spending. That’s why as part of our Plan for Change we will bring forward our proposals for reform shortly that will unlock work and help us reach our ambition of an 80% employment rate.”
