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Over three million families will lose an average of £1,720 per year in real terms by 2029-30, as a result of proposed changes to disability and incapacity benefits, the government has estimated.

This includes 370,000 people who will lose their current entitlement to the daily living allowance element of personal independence payment (PIP), said the Department for Work and Pensions (DWP), in an impact assessment published today.

A further 430,000 future claimants, who would have been entitled to the daily living component of PIP under the current rules, would not be found eligible, under the reformed system set out in last week’s welfare reform green paper.

£4,500 average annual cut to PIP

On average, the two groups would lose out on £4,500 a year on average without PIP, which is designed to compensate people of working-age for the additional costs of disability.

To restrict eligibility, the DWP 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, which include preparing food, washing and bathing, dressing and undressing and communicating verbally.

Carers face benefit cuts too

The tightening of eligibility will also affect unpaid carers, as PIP is one of a set of disability benefits that a person has to claim in order for their carer to be able to obtain carer’s allowance or the carer element of universal credit (UC). The DWP said 150,000 would not receive one of these benefits as a result of its changes to PIP.

The department also set out the impact of its proposed measures to reduce the value of incapacity benefits.

This includes freezing the health element of universal credit at £97 per week until 2029-30 for existing claimants and halving the rate to £50 per week for new claimants, from 2026-27. In today’s spring statement, the government said that the £50 per week rate for new claimants would also be frozen until 2029-30.

Losses from incapacity benefit reductions

In its impact assessment, published alongside the spring statement, the DWP said 2.25m current recipients of the health element of UC would lose £500 per year as a result of the freeze in the rate.

A further 730,000 future recipients of the UC health element would lose out on an average of £3,000 per year due to the halving of the rate for new claimants.

However, the department added that 370,000 people would now be eligible for the UC health element, gaining £2,600 per year, as a result of its decision not to go ahead with the previous government’s plan to tighten the work capability assessment, which determines eligibility.

Losses outweigh gains from policy

Overall, it said 3.8m families would benefit from its reforms, including through its plans to increase the standard allowance of UC by more than inflation from 2026-27.

However, the projected gain for these families – £420 a year in real terms by 2029-30 – is considerably less than the £1,720 that the 3.2m families who will lose out are set to see their incomes reduced by.

Also, while just under half of the families due to benefit have a disabled person in their household, 96% of those set to lose out do, with the latter group accounting for an estimated 20% of all households with a disabled member.

Quarter of a million more in poverty

Based on its estimates, it calculated an extra 250,000 people – including 50,000 children – would be in relative poverty after taking account of housing costs in 2029-30 as a result of the measures.

It stressed that the assessment did not take account of the potential impact of its plan to increase spending on employment support for disabled people by £1bn a year by 2029-30.

It also did not take into account government plans to pay an additional premium on the health element of UC for those with severe, life-long health conditions, who would never be expected to work.

Rationale for benefits cuts

The government’s justifications for the cuts are to address the significant increases in the numbers claiming disability and incapacity benefits since 2019 – along with the resulting costs – and get more disabled people into work.

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).

On the back of its proposed changes, spending on both disability and incapacity benefits will rise, but more slowly. By 2029-30, spending on PIP and disability living allowance (DLA) for working-age adults would reach £31bn, compared with £34.5bn without the reforms, said the DWP.

Measures ‘will make people more ill and less able to work’

However, charities and campaign groups renewed their severe criticisms of the measures in response to the impact assessment.

“Restricting eligibility for PIP and freezing the health element of universal credit will do nothing to help people get into work,” said Centre for Mental Health chief executive Andy Bell.

“They are more likely to make people more ill, more isolated, and less able to work. For many people living with long-term mental health problems, PIP is what enables them to carry on working.”

“MPs need to consider the consequences of plunging their disabled constituents into poverty, with little prospect of plans on employment support meaningfully mitigating this disastrous situation,” said Mencap chief executive Jon Sparkes.

Carers ‘deserve so much more’

In relation to the impact on carers, Carers UK cited research that found that 9% of carers – about 400,000 people across the UK – were in “deep poverty”, meaning their level of resources placed them 50% below the poverty line. This compared with 6% of the non-carer population.

Chief executive Helen Walker said many more carers were now in danger of further financial hardship and poverty, adding: “They deserve so much more. The repercussions of today’s changes will be felt deeply by those who for too long, have been our last line of defence – providing vital support which simply can’t be found elsewhere.”

The British Association of Social Workers (BASW) also joined the criticism, dubbing the cuts “unacceptable”.

“Any moves to balance the books must not damage living standards or make our communities and public services poorer,” said chief executive Ruth Allen. “This will add to demand for adult and children’s social work and other care services, as well as stretching community and charitable support systems.”

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Many disabled people are facing benefit cuts in a government plan to save over £5bn a year by 2029-30 and get more people with health conditions into work, announced yesterday.

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.”

By Lynne Thompson

Last year, the government introduced new rules about universal credit which affect kinship carers disproportionately.

It increased the maximum amount of time that a child’s main carer must spend working or engaging in ‘work-related activity’, such as looking for jobs, to be eligible for the benefit.

This has risen from 16 hours a week for carers of three- to four-year-olds, and 25 hours for those looking after five- to 12-year-olds, to 30 hours for both of these groups.

It is recognised that foster carers – including registered family and friends foster carers – have additional demands when looking after children, so they are subject to more generous rules.

Under these, they need only engage in work-focused interviews with their job centre, rather than seek work, while they are fostering a child aged up to 16.

Tougher requirements on kinship carers

However, kinship carers who are not foster carers only benefit from these arrangements for the first year they spend caring for a child of a friend or relative.

Subsequently, they are put in the same position as parents looking after their own child.

This is despite the fact that kinship carers will often have similar or greater demands than foster carers.

Demands of meeting children’s complex needs

They are likely to be be looking after a child, or children, who have endured a traumatic early life, which may manifest in special educational needs, behavioural difficulties or developmental delays.

This undoubtedly means carers must spend more time with the child than would be typical, in order to meet these complex needs. There may be extra meetings at school or for medical or social work appointments.

This all means that the kinship carer is not able to spend as much time as the government would like on work-related activities, which may mean their universal credit is stopped or reduced.

The agreement a person makes when they claim universal credit is with a work coach, who oversees the number of hours spent on work-related activities.

Work coaches’ discretion to ease requirements

However, a work coach also has discretion to alter these hours based on the individual’s circumstances.

Under DWP guidance, coaches can ease work-related requirements if the claimant has complex needs that mean it would be unreasonable to expect them to meet the requirements. Such needs include emergency or necessary care for a dependant child.

So, if the kinship carer can demonstrate that they need to spend extra time with the child, then these hours can be reduced.

The claimant should show that the child needs extra care, and extra time spent on them, compared to a typical child of a similar age. 

Social workers can help in these circumstances by giving documentary evidence to the claimant that the child has additional needs than would be expected for their age.

Social work evidence of child’s needs

This can include things like:

• The child is often in trouble at school because of behavioural issues. The kinship carer is regularly called in to meetings and must be available for meetings.
• The child is behind in their schoolwork because of additional learning needs, so extra time must be spent helping them with homework.
• The child is poorly nourished or has bad eating habits, so time must be taken to prepare nutritious and appealing meals.
• The child needs constant reassurance because of anxiety.
• The child needs additional stimulation so extra hobbies and activities must be encouraged.

The evidence should reinforce why the child’s needs differ from those of a similarly-aged child without these needs.

Most two-year-olds need a lot of help with dressing and eating. However, you would expect that help to be reduced in a child of five.

You would not expect a child of 14 to need as much supervision with homework as an eight-year-old.

Lack of awareness among work coaches

Sadly, work coaches are not always aware that they are entitled to exercise discretion in these circumstances.

So, what can be done if the work coach will not reduce the number of hours a claimant needs to spend on work-related activities?

Social workers would be able to accompany a client to a meeting with the work coach and, provided the claimant gave the work coach permission, he or she could speak directly to the coach.

Challenging job centre decisions

However, if this does not make a difference, the claimant needs to ask the Department for Work and Pensions (DWP) for a ‘mandatory reconsideration’, setting out why they disagree with the job coach’s decision.

These are generally considered by someone with more experience and who is more aware of the rules.

This is normally sufficient to enable the circumstances to be reconsidered. However, if that fails, then the claimant should appeal the decision to the social security and child support tribunal. This must be within a month of the mandatory reconsideration decision.

More broadly, a local authority could contact the relevant regional DWP partnership team to discuss discretion for kinship carers, to support its greater use by work coaches.

What social workers need to know

It is not necessary for social workers to be aware of the detailed rules around work-related requirements. They are not benefits advisers.

However, social workers need to know that they can help claimants by explaining to the DWP why they cannot meet work commitments, and be aware of what to do if job coaches do not consider the circumstances of the kinship carer.

They can also signpost kinship carers to information and advice on universal credit provided by the charity Kinship.

Lynne Thompson provides private client support to professional firms such as solicitors and accountants. She advises on private client tax matters, state benefits and care home funding