The Department for Work and Pensions (DWP) is reportedly about to make public £6billion worth of potential benefit cuts – but what exactly could these changes mean for you?
According to information leaked to ITV News last week, the DWP has crafted several proposals with the aim of encouraging more individuals receiving disability benefits to join the workforce — this includes those with severe and significant health conditions.
The plans, which have sparked fierce backlash from disabled individuals and some Labour Party members, are set to introduce tougher eligibility criteria for Personal Independence Payments (PIP), freeze payments in line with inflation, and alter the calculation of Universal Credit.
Pensions Secretary Liz Kendall has suggested that these revisions will address the “broken” welfare system and get more people into work. Meanwhile, the DWP expects these changes will lead to savings exceeding £6 billion by the end of this decade.
Chancellor Rachel Reeves is set to disclose the party’s strategy during the Spring forecast on March 26. These proposals will be accompanied by a Green Paper from the DWP outlining the proposed measures, reports the Mirror.
Here we explain what changes have been put forward and how they could impact you.
Changes to PIP eligibility
The ITV report indicates that the Government is looking to make it harder for people to claim the disability benefit. Since its inception in 2013, the PIP has been a source of financial assistance provided by the DWP for individuals living with chronic mental or physical health issues or disabilities.
The most recent figures suggest that approximately 3.6 million people are currently PIP beneficiaries in the UK.
One common misunderstanding about Personal Independence Payment (PIP) is that it’s a benefit for those out of work. This is not the case, and you can claim PIP even if you are employed and have savings.
The purpose of these payments is to assist with the additional costs associated with having a disability or health condition. The amount of PIP you receive depends on how your condition impacts your daily life and your ability to perform everyday tasks, meaning a wide range of conditions and disabilities could be eligible.
The Government has yet to confirm any changes to the eligibility criteria. However, charities and claimants have highlighted that qualifying for the benefit is already challenging.
In the previous year, the Department for Work and Pensions (DWP) rejected over 330,000 PIP claims. To be awarded the benefit, you must undergo an assessment by the DWP.
Typically, a healthcare professional will conduct the assessment and, using this information – along with the details you provided on your original PIP claim form – compile a report. This report is then sent to the DWP, who will make the final decision on your claim.
The Independent has disclosed that 1,300 individuals passed away before receiving their Personal Independence Payment (PIP) claim decision from the Department for Work and Pensions (DWP). Data obtained through a Freedom of Information (FOI) request revealed that PIP applicants typically waited nearly four months for their claims to be 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. Overall, the Government anticipates that changes to PIP will save around £5 billion.
PIP, paid every four weeks, consists of two components – a daily living rate and a mobility rate – and claimants can be entitled to either or both of these. These components are further divided into the standard rate and the enhanced rate.
The amount received is also rising from April by 1.7% like other DWP benefits – here’s how PIP rates are changing this year:
Daily Living
Mobility
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.”
He continued: “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, added: “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 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 with health conditions or disabilities have to go through 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 £390a month.
The Government announced in its Autumn Statement that it was going to modify the Work Capability Assessment. Under the proposed changes, the LCWRA payment will be scrapped and replaced with a new health element.
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 £5billionwill 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.”