DWP to overhaul Universal Credit and PIP in disability benefits revamp next year

The Department for Work and Pensions has solidified plans to propose a revamp of its disability benefits early next year. This follows the Secretary of State’s unveiling of a Get Britain Working white paper, aimed at reforming employment support to help more people secure jobs.

Labour aims to increase the current employment rate from 75% (as per the latest figures from July to September 2024) to an ambitious 80%. The strategy includes transforming UK Jobcentres from a benefits monitoring agency into a new National Jobs and Careers Service.

To cut down on unemployment and economic inactivity, several crucial steps have been proposed, including addressing the widespread, long-term sickness that prevents many from working. The announcement also confirmed future measures to “overhaul the health and disability benefits system so it better supports people to enter and remain in work and to tackle the spiralling benefits bill.”

The DWP has stated that a consultation will be published in spring 2025 and reassured claimants that it will “put the views and voices of disabled people at the heart of any policy changes that directly affect them.”

Under Tory rule, the Department for Work and Pensions (DWP) introduced plans to address the surge in Personal Independence Payment (PIP) claims, with around 3.6 million claimants currently. In April, a green paper floated several potential reforms including replacing financial support with vouchers, grants or shopping catalogues, reports Birmingham Live.

Despite consultation spanning the General Election period and concluding on July 22, the fresh Labour government will not release feedback findings, choosing instead to craft its own disability allowance strategies. However, it has not categorically ruled out the possibility of introducing vouchers.

Work and Pensions Secretary Liz Kendall recently said: “I will be putting forward our own proposals to reform sickness and disability benefits. This is extremely difficult and I know people really want more detail, but we won’t do that until we’re absolutely ready and have had the proper discussions with people.”

Questioned on whether she would ditch the much-debated replacement of PIP payments, up to £737 a month, with vouchers, Ms Kendall expressed concerns but refrained from a definitive pledge. She remarked: “I was very struck particularly by the comments people made around shifting support to vouchers and where many organisations said their real concern was that it took away people’s autonomy and particularly when services are so stretched and tight.”

Expectations are that DWP spending on PIP will surge by 63% over the next five years, from £21.6 billion in 2023/2024 to a whopping £35.3 billion in 2028/2029. Monthly, the system sees 33,000 new PIP claimants—a rate twice as high as before the pandemic.

Labour is also planning a spring 2025 overhaul of health and disability benefits, which includes revamping or replacing the work capability assessment.

This assessment currently determines if Universal Credit or ESA claimants are fit for work or should receive extra incapacity payments.Those on Universal Credit get an extra £416 a month – around £5,000 a year – for having ‘limited capability for work and work-related activities’, meaning they aren’t required to look for a job.

The upcoming alterations to the work assessment are poised to save the government a staggering £3 billion by slashing the number of people eligible for extra financial assistance. Policy analysts at Policy in Practice estimate that close to 450,000 individuals could be stripped of their eligibility for this added income, yet only about 15,000 might be spurred to get a job as a consequence—a point Labour plans to tackle amidst its sweeping amendments.

Proponents argue a significant increase in employed disabled persons would arise if proper backing was provided. James Taylor, executive director of Strategy at disability equality charity Scope, reportedly said: “We agree disabled people should have the same chances and opportunities to work as everyone else.

“Personalised and comprehensive employment support could be transformative for so many disabled people. But the government must fund it well and commission the right organisations to deliver it.

“Pressing ahead with the previous government’s planned cut to disability benefits will leave disabled people financially worse off and further from work. We’d urge the Secretary of State to take a fresh approach to supporting disabled people into work. By spending time listening to their experiences and understanding the barriers they face that a focus on overall budgets and sanctions won’t solve.”