The Work and Pensions Secretary, Liz Kendall MP, announced the benefits reform Green Paper this week. The significant reforms to the welfare system, aiming to reduce the benefits bill by £5 billion annually by 2030 and encourage employment among those capable of working.
Abolishing the Work Capability Assessment which evaluates an individuals’ eligibility for health-related benefits, will be discontinued by 2028. It will be replaced with a “right to try” work guarantee to be introduced to remove barriers to work.
Tightening Personal Independence Payment (PIP) eligibility, the criteria for PIP will become more stringent, requiring claimants to score a minimum of four points in at least one activity to qualify for the daily living component from November 2026. This change is expected to affect approximately 1 million current recipients.
Adjusting Universal Credit (UC) an additional £1 billion will be invested into the UC standard allowance by 2029-30. However, the health element of UC will be reduced from £97 to £47 per week for new claimants starting April 2026, while existing recipients will have their payments frozen at £97 until 2030. Individuals under 22 will no longer be eligible for the health top-up. Conversely, the standard allowance for single persons over 25 will increase by £7 per week to £98 in 2026-27.
Introducing a new unemployment insurance scheme will offer greater income protection for those who have contributed to the system, assisting them in securing employment that aligns with their skills.
Implementing the “Right to Try” Work Initiative. Legislation will ensure that disabled individuals attempting to return to work will not face benefit reassessments solely due to their employment efforts, encouraging them to explore work opportunities without jeopardizing their benefits.
The government has committed £1 billion to improve employment support services, including overhauling jobcentres and the role of work coaches, to better assist individuals in returning to work.
The Chancellor, Rachel Reeves, stated these reforms are designed to control rising benefit costs and promote workforce re-entry. The reforms have faced criticism from disability charities and some Labour MPs, who argue that the cuts could push disabled individuals further into poverty and exacerbate health issues.
Since the pandemic, the number of working-age people receiving PIP has more than doubled from 15,300 to 35,100 a month. The number of young people (16-24) receiving PIP per month has increased from 2,967 to 7,857 a month. Over the next five years the number of people claiming PIP is expected to increase from 2 million in 2021 to 4.3 million, costing £34.1 billion annually.
There are other steps that were in The Green Paper such as reintroducing reassessments for people on incapacity benefits who have the capability to work, targeting Personal Independence Payments for those with higher needs by not only changing the eligibility requirement to a minimum score of four on at least one of the daily living activities to receive the daily living element of the benefit, but also rebalancing payment levels in Universal Credit to improve the Standard Allowance, raising it above inflation by 2029/30, adding £775 annually in cash terms.
The government are consulting on delaying access to the health element of Universal Credit until someone is aged 22 and reinvesting savings into work support and training opportunities through the Youth Guarantee.
However, there are protections in place for those who are disabled who cannot and will not ever be able to work and supporting them to live with dignity. Those currently in receipt of UC health will benefit from the increased standard allowance and will not be affected by plans to reduce UC health in future. There will be extra financial support for people who receive the new rate of UC health in the future system, with a new premium for individuals with severe, life-long health conditions who will never be able to work. Reassessments for disabled people and people with life-long conditions who will never be able to work will be stopped. The government will look at how safeguarding practices for the most vulnerable.
There is a £1 billion employment package to deliver tailored support for disabled people and those with long-term conditions.
There will be programmes to help stop people from falling into long-term economic inactivity through early intervention and support. The Access to Work Scheme will consult on improvements to help people start and stay in work with reasonable adjustments. Unemployment insurance will reform contributory benefits (ESA and JSA) into a single, non-means tested, time-limited benefit for those who have paid into the system.
There is a lot of disquiet. Disability charities are very concerned. Mental health charities are worried that this will lead to further mental health crises. Financial poverty has a direct impact on physical and mental health conditions. Poverty robs people of dignity and independence.
The aims to improved financially stability in the benefits system requires careful consideration when this affects the most vulnerable. Safeguards must be in place to limit further morbidity, indignity and poverty. It will lead to harm in these people if it is not carefully implemented.