How PIP and sickness benefits might change and how it could impact you

Labour is pushing ahead with plans to cut the benefits bill, despite warnings from charity leaders that they could have a “devastating” impact on disabled people.

The scale of the Government’s ambition when it comes to welfare reform is becoming clearer, as Chancellor Rachel Reeves seeks to control rising public spending and avoid further tax cuts.

The Office for Budget Responsibility (OBR) has forecast that spending on health-related benefits will increase from £65bn to more than £100bn in 2030.

Work and Pensions Secretary Liz Kendall said earlier this week that the health and disability benefits system was “broken” and failed to support people into work. She promised to launch “radical” reforms in spring.

Reports suggest Labour ministers want major changes to both out-of-work incapacity benefits and personal independence payments (PIP), the non-work benefit used to help disabled people with day-to-day living.

So what exactly is the Government looking at, which options will ministers most likely land on, and how controversial will they prove to be with claimants, campaigners and Labour’s left-wing base?

Sickness benefit cuts

The Government is considering big changes to the Work Capability Assessment (WCA). This is the test used to decide someone’s fitness to work and their access to universal credit or employment and support allowance (ESA).

Existing Department for Work and Pensions (DWP) plans launched under the Conservatives would push more than 450,000 claimants currently judged unable to work, and not required to look for work, into engaging in a job search.

Tightening eligibility to move hundreds of thousands of people from the “limited capability for work and work-related activity (LCWRA)” category into the job-search category would mean they would each lose £417 per month – around £5,000 a year.

Labour has said it is committed to making the same level of cuts – saving £5.4bn by 2029-30 – but has vowed to set out its own changes to the WCA as part of the green paper expected in March.

Labour ministers are now considering scrapping the LCWRA category altogether, according to The Times. Kendall is said to want to make sure all out of work benefit claimants have a “duty to engage” with job search services.

Sir Stephen Timms, the DWP minister for disability, said neurodivergent people on benefits will get more help to find employment. Writing in The i Paper, Sir Stephen said a new panel will advise on how to tear down barriers faced by people with neurodiversity who want to work.

Likelihood:

Scrapping the LCWRA category could mean even more people are forced to look for work and lose out on £417 a month. And it could result in even greater savings for the Treasury.

But it is not clear if Labour ministers would feel the need to create a new category for those with the most serious disabilities and illnesses, who are completely unable to work, in order to make the reforms palatable to left-wing Labour MPs.

Disability charities and campaigners would bitterly oppose any Labour push to go further than the Tories, having described the previous Government’s proposals as “devastating” and “cruel”.

Labour will also need to tread carefully in explaining the motivation behind any changes, after the previous Government’s WCA reform consultation was ruled “misleading” and therefore “unlawful” by the High Court last month.

PIP eligibility changes

PIP changes could be even more controversial. Any moves to restrict access to the support payments, which help disabled people with mobility and day-to-day living needs, are sure to spark outrage with campaigners.

Tightening eligibility and thresholds for PIP is a “top priority” for the welfare spending cuts ahead, according to The Times. Those with mental health issues are thought to be likely to find it harder to claim.

The shift would build on proposals previously put forward by the Conservative Government. Former Tory Work and Pensions Secretary Mel Stride had said disability benefits should not be for those feeling “a little bit depressed”.

Likelihood:

Cutting access to PIP could prove the most difficult change to make. PIP is a disability benefit not tied to work, with people claiming it while holding full-time or part-time jobs.

It will be tricky to keep Labour MPs onside for PIP reform, since it is harder to sell as part of the “get Britain working” drive.

Labour backbenchers have previously told The i Paper that disability benefit cuts could spark a major revolt in the Commons. “You could see a very big rebellion materialising,” one MP warned.

One-off PIP payments

Controversial Tory proposals to move PIP claimants onto one-off grants and vouchers for equipment and therapies, rather than provide regular cash payments, are said to have been ruled out by Labour ministers.

However, they are said to considering one-off cash payments for specific things when they are needed by PIP claimants, instead of providing a regular, monthly amount of money.

Likelihood:

Cutting PIP as a regular part of disabled people’s income will also be hotly disputed. Claimants have complained that one-off vouchers could not possibly cover all their needs, and the same arguments will be made for one-off cash payments.

More regular assessments

More regular health-related benefit assessments are said to be under discussion, according to the BBC.

Ministers are also reportedly mulling over whether to scrap the WCA to align the fitness-to-work tests more closely with the assessments used to approve PIP.

The WCA process judges whether someone can work or not, while the PIP assessment awards points for how much help someone needs.

This would provide little comfort to campaigners, since both processes have been subjected to fierce criticism and claims they are set up to “catch people out”.

Likelihood:

More regular tests would also be fiercely opposed by disability groups, who say re-assessments already cause a lot of stress and anxiety.

One major issue for the Government, should they decide to overhaul the WCA or PIP assessment process, will be timing. Reeves is keen to see cost savings banked as soon as possible.

But David Southgate, policy manager at disability charity Scope, told The i Paper that lengthy consultations meant it was “unlikely” PIP and WCA changes could be implemented until 2026.

Scope described the latest reported benefit proposals as “enormously harmful to disabled people”.

DWP sources did not deny that there were plans to change PIP as well as the WCA, but told The i Paper that reported ideas were only “speculation”, with nothing decided yet.

A spokesperson for Kendall’s department said: “We’ve inherited a broken welfare system in desperate need of reform.”

They promised to work with disabled people and their organisation, and said the plans to be announced in the spring “will ensure the health and disability benefit system is fit for purpose, fair on the taxpayer and delivers the right support to the right people”.