Massive reforms to the welfare system could see the long-term sick forced back to work or have their benefits slashed, according to reports. According to The Times, Work and Pensions Secretary Liz Kendall is also preparing to make it harder for those with mental health issues to claim separate disability benefits.
Kendall is reportedly looking to stop the long-term sick from being paid benefits without requirements and is also likely to slash financial incentives. One consideration is removing the Universal Credit category of “limited capability for work”, which would mean claimants would lose around £5,000 a year and also need to prepare to return to work.
It has been indicated that ministers also want to scrap the work capability assessment, which is used to approve incapacity benefits. It has also been suggested that personal independence payments (PIP) could be overhauled.
Business leaders have reportedly been told that changes to PIP thresholds and eligibility will be the first priority in spending cuts in March. Other options include one-off payments instead of a regular income and means testing. However, vouchers for specific equipment or aids instead of cash payments have been ruled out.
A government source told The Times: “The Tories failed on welfare because they failed on work. This Labour government recognises that many sick and disabled people want to work, given the right support, but are unfairly shut out”.
Kendall has previously criticised the Conservatives for failing to control welfare spending. She said: “We’re going to get the benefits bill on a more sustainable course – and it has to be, we cannot accept these costs of failure, failure for individuals, failure for businesses and failure for the economy.
“But the way to do this is to get more people into work through the reforms that we’re putting in place in our job centres and through reform of the benefit system. And we’ll be bringing forward our green paper on reforming sickness and disability benefits in the spring.”
Speaking about the welfare cap being on course to be exceeded by £8.6bn, Kendall said: “This is our inheritance from the Conservative government. And the Tories failed on welfare because they failed on work.
“We have got almost record numbers of people out of work due to long-term health problems. That’s terrible for them. It’s terrible for their living standards. It’s terrible for employers who want to recruit and it’s terrible for the public finances.
“So we need big reforms in the way that we work to get more people into those jobs, which will help bring the benefits bill onto a more sustainable footing.”