Big changes are on the way for the PIP (Personal Independence Payment) system in 2025. The payments help cover the extra costs for individuals with long-term health conditions or disabilities. Payment rates vary, offering higher and lower rates based on individual requirements.
From August until the end of October 2024, some 230,000 people filed their first claim for the benefit, averaging about 800,000 submissions per month.
Here are the six key changes to be aware of for the year ahead:
New Year payment dates change
Benefit payment schedules will adjust due to the festive period and the New Year’s bank holiday. Payments that would normally be received on Tuesday, December 31, will be processed as usual, given New Year’s Eve is not a bank holiday.
But those expecting payments on Wednesday, January 1, will receive funds a day sooner, on December 31. This will apply to recipients who were last paid four weeks earlier, on December 4, in line with the four-week payout cycle.
Normal payment dates will resume from Thursday, January 2, save for Scotland where benefits due on December 2 will be issued on December 31 instead.
Motability £750 payment scrapped
The additional New Vehicle payment associated with the Motability scheme is to be ended on Friday, January 3. As noted by the official Motability site: “If you’re thinking of joining the Scheme, you’ll need to order by 3 January 2025 to get this.”
The payment was designed to ease the financial burden faced when purchasing a new vehicle amidst worldwide shortages. The £100 New Product Payment for scooters and powered wheelchairs is also ending on January 3.
You may be eligible for a Motability vehicle if you are on the higher rate of the mobility element of PIP, as well as on the higher mobility rate for Disability Living Allowance and the Adult Disability Payment.
Veterans receiving the Armed Forces Independence Payment and War Pensioners’ Mobility Supplement also qualify.
DWP reforms for disability benefits
The Labour Government has set out its Get Britain Working white paper, proposing an “overhaul of the health and disability benefits system so it better supports people to enter and remain in work”. Proposed measures include a new job and careers service to assist benefit recipients back into employment. More details about the plans can be found here.
The DWP is planning a consultation on the plans for Spring 2025. The previous Conservative Government proposed a green paper in April with plans to reform PIP, including replacing cash payments with a voucher scheme. However, the Labour Government has previously stated it has no intention to implement such a change.
Payment rates increase
Benefit payment rates are set to rise by 1.7 per cent from April 2025, affecting all payment elements of most DWP benefits, including PIP and DLA. This means that the PIP weekly rates for the daily living element will increase for the lower rate from £72.65 to £73.90, while the higher rate will rise from £108.55 to £110.40.
The lower rate of the mobility component will also see an increase from £28.70 to £29.20, while the higher rate will rise from £75.75 to £77.05. Consequently, if you’re entitled to the higher rate for both components, your four-week payment will increase from £737.20 to £749.80.
PIP claimant spending study
There have been discussions among ministers about to what extent Personal Independence Payment (PIP) sufficiently covers the additional costs for disabled individuals. In light of this, the DWP is to research how recipients use their PIP funds.
Sir Stephen Timms, the DWP Minister for Social Security and Disability, commented: “There is no objective way of deciding what an adequate level of PIP should be, as everyone has different requirements reflecting their own circumstances and priorities. DWP pays close attention to estimates of the extra costs faced by disabled people, including academic research, analysis by Scope, and DWP’s own commissioned research on the Uses of Health and Disability Benefits from 2019.
“In order to improve the evidence in this area, DWP is now undertaking a new survey of Personal Independence Payment customers to understand more about their disability-related needs.” The findings of the study are expected to be published during Summer 2025.
NHS back to work funding
Additionally, the Government is investing £3.5million across 17 NHS regions to enhance treatment for individuals with musculoskeletal conditions, which are a significant barrier to employment for many. This comes as approximately 2.8 million people are out of work due to long-term ill health, with muscle and joint issues being the second most common cause after mental health problems.
PIP is not means-tested, meaning eligibility isn’t dependent on whether you’re employed or not. Yet over 1.1 million people receiving the benefit get the fund due to musculoskeletal conditions. Many of these individuals may also be receiving the sickness payment from Universal Credit if they are deemed unfit for work.