Many disabled people face benefit cuts in government plan to save over £5bn from welfare system

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Access to personal independence payment (PIP) – the main disability benefit for people of working-age – would be restricted, while incapacity benefit rates for those out of work would be frozen for existing claimants and halved for new recipients.

At the same time, the Department for Work and Pensions (DWP) would invest an extra £1bn a year in employment support by 2029-30 in order to help get more disabled people into work.

Disabled people would also get a new right to try work without immediately losing access to benefits, while those whose lifelong conditions mean they will never be able to work would be given a benefits premium and spared reassessments.

‘Helping people who can work to do so’

Work and pensions secretary Liz Kendall, who launched the Pathways to Work green paper in a statement to Parliament, said the proposals were about “helping people who can work to do so, protecting those most in need, and delivering respect and dignity for all”.

The DWP will not publish an impact assessment of the reforms until next week, so it is not known as yet how many people will have their benefits cuts. However, charities warned the proposals would drive many disabled people into deeper poverty.

Scope said the changes would be “catastrophic for disabled people’s living standards”, while the Centre for Mental Health warned that they would worsen mental health, a concern also raised by NHS leaders.

Rising benefits caseload and cost

The green paper is the government’s response to the significant increase in the number of working-age people claiming disability benefits (mainly PIP) or incapacity benefits (employment and support allowance or the health element of universal credit) in the wake of the pandemic, and the ensuing rise in costs.

According to think-tank the Institute for Fiscal Studies (IFS), spending in Great Britain on these benefits grew from £36bn to £48bn in real-terms from 2019-20 to 2023-24 and are projected to hit £63bn in 2028-29 (in 2024-25 prices).

Annual spending on disability benefits grew by 45% in real-terms, and the number of recipients by 39%, while the inflation-adjusted cost of incapacity benefit grew by 26% and the caseload by 28%, from 2019-20 to 2023-24.

Greater levels of disability in population

The government has admitted that this has been, in part, caused by rising levels of disability, with 36% of people of working-age now having a long-term health condition, up from 29% a decade ago.

However, it said that this was being outstripped by the rise in the number of successful claims for disability or incapacity benefits. According to DWP figures, the number of disabled working-age people in England and Wales increased by 17%, but the numbers receiving an incapacity or disability benefit increased by double that amount (34%), from 2019-20 to 2023-24.

The DWP said this meant that the “structure of the benefits system” was partly responsible for the rise in cases.

In particular, the green paper said there was a “perverse” incentive within the incapacity benefits system for people to be found to have “limited capability for work and work-related activity” through the work capability assessment (WCA).

As a result, they are put on the health element of universal credit (UC) and receive £97 per week, in addition to the standard universal credit allowance, which is worth £91 per week for single people aged over 25. The difference in what they receive and what is given to those just on the standard allowance has grown over time due to a freeze in the standard allowance from 2015-19.

Changes to out-of-work benefits for disabled people

To address this issue, the DWP said it would:

• Scrap the WCA, meaning people would no longer be assessed on how far their disabilities or health conditions limited their ability to work. In future, the health element of UC would only be available to people assessed as eligible for the daily living component of PIP (see below). This is expected to come into force in 2028-29.
• Freeze the health element of UC at £97 per week until 2029-30 for existing claimants and halve the rate to £50 per week for new claimants, from 2026-27. In the spring statement on 26 March 2025, the government said that the £50 per week rate for new claimants would also be frozen until 2029-30.
• Increase the standard allowance of UC – for new and existing claimants – from £91 to £98 per week, from 2026-27. Combined with the cuts to the health element, this would significantly narrow the gap between payments to people without health conditions who only receive the standard allowance and those with a condition who receive both the standard allowance and health element.
• Consult on raising the minimum age for the UC health element from 18 to 22, with the savings reinvested in work support for young people. This would be to “remove any potential
  disincentive to work” and support the government’s “youth guarantee”, to give those aged 18-21 access to education, training or help to find a job.
• Enhance investment in employment support for people who are out of work who have a work-limiting health condition or disability, with an extra £1bn a year provided by 2029-30.

To protect those with the highest needs, the DWP said it would pay an additional premium on the health element of UC for those with severe, life-long health conditions, who have no prospect of improvement and will never be able to work, and ensure that they would not have to have to be reassessed.

Restricting access to PIP

Despite the government’s emphasis on getting more disabled people into work, one of the biggest measures in the green paper is restricting access to PIP, which is designed to compensate people for the costs of disability and is paid regardless of work status.

The DWP said spending on PIP was “becoming unaffordable” and needed to be focused on those with higher needs.

To restrict eligibility, it plans to bar people from receiving the daily living component if they do not score at least four points on any one of the 10 assessed activities, a policy that would apply to new applicants from 2026-27 and existing claimants, at the point of review. To be eligible for the daily living component of PIP, you must score at least eight points across all 10 activities.

Under the plans, you would not be eligible if you needed assistance to wash your hair or wash below your waist (two points) or needed assistance getting in or out of the shower (three points), under the washing and bathing activity, unless you scored four points or more in one of the other activities.

The DWP said it was “mindful of the impact this change could have on people” and so would consult on offering a review of disabled people’s health and eligible social care needs should they lose access to PIP.

Loss of benefit

The IFS said the impact of the reforms to PIP was uncertain because the consequences of changes to eligibility criteria were hard to predict. However, it added that:

• People who received the health element of UC but were not eligible for PIP would lose access to the health element through entitlement being based on the PIP assessment. This would make them worse off by £2,400 a year (in today’s prices), from 2028-29. Currently, 600,000 people qualify for the health element of UC but do not receive PIP.
• About 2.4m families would be worse off by £280 a year by 2029-30 due to the freeze in the health element of UC.
• New claimants for the health element of UC would be worse off by £2,500 a year than were the green paper changes not introduced.

The proposals sparked widespread anger from disability and anti-poverty charities.

Government ‘choosing to penalise some of society’s poorest’

With almost half of families in poverty having at least one disabled person, Scope said the government was “choosing to penalise some of the poorest people in our society”.

While welcoming the increased investment in employment support, the charity’s executive director of strategy, James Taylor, said this would be undermined by the benefits cuts.

“These cuts will be a catastrophe for disabled peoples’ living standards and independence,” he added. “The government will be picking up the pieces in other parts of the system with pressure on an already overwhelmed NHS and social care, as more disabled people are pushed into poverty.”

Impact on carers and child poverty

The End Child Poverty Coalition and Child Poverty Action Group warned that the measures risked deepening child poverty – which the government is developing a strategy to tackle – while the Carers Trust and Carers UK flagged up the impact of the proposals on carers.

Access to carer’s allowance is dependent on the person caring for someone who receives one of a set of disability benefits, and Carers UK said half of awards are tied to the person being cared for receiving PIP. It also pointed to the fact that disability rates are higher among carers than in the general population, with about 150,000 people receiving both PIP and carer’s allowance.

“1.2 million unpaid carers in the UK are living in poverty, (with 400,000 in deep poverty),” said its chief executive, Helen Walker. “Raising the qualifying threshold for support could mean even more carers will struggle to afford essentials like food and heating.”

Risk of deterioration in mental health

The Centre for Mental Health, meanwhile, warned of an adverse impact of the policy changes on people’s mental health.

While welcoming the planned increase in employment support funding, chief executive Andy Bell said: “Evidence shows that when governments tighten benefit rules, people’s mental health gets worse. If more people fall into poverty, both the prevalence and severity of mental ill health is likely to rise.”

This issue was also picked up by health trust representative body NHS Providers, which warned that the proposals risked increasing pressures on mental health services.

“Mental health trust leaders previously told us that changes to universal credit and benefits were increasing demand for services, as were loneliness, homelessness and wider deprivation,” said its interim chief executive, Saffron Cordery.”

“With poor mental health the leading driver of ill-health related economic inactivity, they will also be worried that today’s announcement could lead to worse mental and physical health for patients and shift further costs and pressures onto the health and care system, including overstretched emergency departments and mental health services.”