Many more benefit claimants – including those receiving Universal Credit, PIP and ESA – will be expected to go to work under Labour’s upcoming huge benefits shake-up. An overhaul of disability and incapacity benefits is due to be announced this spring with the aim to reduce the soaring welfare bill, boost employment and reduce economic inactivity.
Ministers have indicated that the upcoming Health and Disability Green Paper will primarily focus on assisting more claimants to re-enter the workforce. As part of these changes, the work capability assessment—which determines whether someone on Universal Credit or ESA (Employment and Support Allowance) needs to find employment or qualifies for incapacity payments—will be revised.
This means fewer individuals will be exempted from work and granted additional benefits.
The government has noted that nearly two-thirds of Universal Credit recipients are currently unemployed—a figure that rises to 70 per cent in some areas. ESA is typically awarded to those who claim they cannot work due to ill health, with very few ever returning to work.
However, most are expected to transition to Universal Credit throughout this year. Furthermore, while Personal Independence Payment is based on how a person’s disability or health condition impacts their daily activities and mobility rather than their ability to work, only 16 per cent of working-age recipients are employed, reports Birmingham Live.
The Office for Budget Responsibility has shed light on the workings of Personal Independence Payment (PIP), stating: “Personal Independence Payment (PIP) is the working-age disability benefit which helps individuals deal with the extra costs of having a disability.
“Unlike incapacity benefits, PIP is not means-tested and is available to those in work. Only around one-sixth of PIP recipients are in work, a number that has been fairly stable over recent years.”
They also noted the considerable crossover between disability and incapacity benefits, revealing, “There is significant overlap between disability and incapacity benefits. Around two-in-three claimants who received ESA or UC also received PIP or DLA, and around two-in-three claimants who received PIP or DLA also received ESA or UC.”
Sir Stephen Timms, the DWP Minister for Social Security and Disability, has indicated that the benefits system is set for a revamp aimed at assisting people in finding employment, particularly focusing on enabling disabled individuals to contribute their perspectives on any proposed changes. He said in answer to a parliamentary question: “We believe there is a strong case to change the system of health and disability benefits across Great Britain so that it better enables people to enter and remain in work, to respond to the complex and fluctuating nature of the health conditions many people live with today.”
“This government is committed to putting the views and voices of disabled people at the heart of all that we do, and with any reform, including the Health and Disability Green Paper we intend to publish in the spring, we will consult with disabled people and representative organisations. Ahead of the formal consultation for the Green Paper, we have already started to explore ways of engaging with disabled people and their representatives, including through stakeholder roundtables and public visits, and look forward to progressing these initiatives over the coming months.”
In the 16-24 age group, the number of people not required to look for work due to long-term sickness rose 29 per cent between 2019 and 2022 and 42 per cent for 25-to 34-year-olds. The largest increase for those on long-term sickness was due to mental illness, which rose by around 20,000, up nearly a quarter (24 per cent).
PIP (Personal Independence Payment) currently varies from £114.80 to £737.20 every four weeks, set to increase to £116.80 and £749.80 from April 2025.
Simultaneously, Universal Credit’s LCWRA (limited capability for work and work-related activity) payment is set for a rise this April from £416.19 to £423.27 per month, supplementing the standard allowance and any additional entitled components. But Labour’s plans to reform or replace the work capability assessment mean this top-up is under threat and could be abolished in future, with people referred to occupational health specialists rather than being given sick notes that say they aren’t fit for work.