Full PIP and Universal Credit changes as Labour confirm DWP benefits overhaul
by Sonia Sharma · ChronicleLiveMajor changes have been announced to PIP and Universal Credit as part of an overhaul of the welfare system.
The changes, outlined by Work and Pensions Secretary Liz Kendall on Tuesday, will see the assessment process for some health benefits scrapped and reform to disability benefits in a plan expected to save billions over the next five years. Ms Kendall said the current social security system is "failing the very people it is supposed to help and holding our country back".
Addressing Parliament, she announced the "work capability assessment" for Universal Credit - which is used to determine eligibility for incapacity benefit payments based on someone's fitness for work - will be scrapped in 2028. She said instead extra financial support for health conditions will in future be based on a person's health or disability, rather than their capacity to work.
She also said the Government will bring in a "permanent, above-inflation rise" to the standard allowance of Universal Credit as well as legislating to "rebalance" payments for the benefit. Ms Kendall said this would equate to a £775 annual increase in cash terms by 2029.
She said this was a "decisive step to tackle the perverse incentives in the system", with the Government previously saying the current system incentivises people to say they cannot work "simply to get by financially". She also confirmed the Government will not freeze Personal Independence Payment (PIP), as had been rumoured.
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But she said they will legislate for a change to the assessment for a benefit which is aimed at helping the disabled with the increased cost of living associated with their conditions. She said people will need to score a minimum of four points in at least one activity to qualify for the daily living element of PIP from November 2026. She said the Government will also review the PIP assessment, promising to consult with disabled people and organisations representing them, to ensure the process is "fit for purpose now and into the future".
Of the overall plan, Ms Kendall said: "This is a significant reform package that is expected to save over £5 billion in 2029/30 and the OBR (Office for Budget Responsibility) will set out their final assessment of the costings next week."
The Disability Benefits Consortium, an umbrella body representing more than 100 charities and organisations, said changes to PIP will make it harder for disabled people to manage "the overwhelming additional costs of their condition, from wheelchairs to visits from carers". "Any targeted cuts to disabled people on Universal Credit and employment and support allowance will largely hit those who are unable to work and rely on these benefits to survive," he said. "We are united in urging the Government to abandon these cruel cuts."
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