Last Updated: March 19, 2025
What is in the government’s plans for welfare reform and what do the proposed changes to disability benefits mean?
On Tuesday, 18th March, Work and Pensions Secretary, Liz Kendall unveiled a sweeping package of reforms to overhaul the current welfare system.
These changes outlined in the Department of Work and Pensions Green Paper aim to reduce economic inactivity, encourage more people to work, and curb rising welfare costs. However, they also raise concerns about how claimants with health conditions and caring responsibilities will be affected, with some critics calling it the biggest reduction in disability benefits ever.
The government has outlined five key principles behind the reforms:
- Protecting disabled people who can’t and won’t ever be able to work and supporting them to live with dignity
- Delivering better and more tailored employment support to get more people off welfare and into work
- Stopping people from falling into long-term economic inactivity through early intervention and support
- Restoring trust and fairness in the system by fixing the broken assessment process that drives people into dependency on welfare
- Ensuring the system is financially sustainable to keep providing for those who need it most
At-a-glance: Key changes to benefits
Changes to PIP eligibility criteria
Personal Independence Payment (PIP) is currently claimed by over three million people in the UK. It is not means tested and is available to people who are working. Whilst payments will go up in line with inflation this year, there will be stricter testing to qualify for PIP meaning many will lose their entitlement. More face-to-face assessments will be introduced.
No reassessments for people with severe disabilities or illness
People with the most severe long-term conditions – those who have no prospect of improvement and will never be able to work – will no longer have to face regular assessments to get their disability benefits. Their incomes will also be protected.
Work capability assessment to be scrapped
The Work Capability Assessment will be scrapped. Instead, applicants for health-related financial support will undergo a single assessment, based on the existing PIP system.
Universal Credit boost for people actively seeking work – but cuts to health element
There will be an above inflation increase in the standard rate of universal credit for all those seeking work, adding up to £775 a year extra by 2029/30.
For people who already get the health element of universal credit, this will be frozen at £97 per week until 2029/2030. For new claims, the rate of the universal credit health element will be cut by £47 per week, from £97 per week in 2024 to £50 per week in 2026/2027.
Reduced incapacity benefits for under 22s
Those aged under 22 will no longer be able to claim the incapacity benefit top-up to universal credit. Ministers are also consulting on raising the age at which young people move from Disability Living Allowance for children to PIP from 16 to 18.
Incentives to work – a ‘right to try’ without risk of losing benefits
To encourage more people into work, the Government has pledged that working in itself will not trigger an automatic reassessment or a potential loss of benefits. People in receipt of the health element of universal credit will continue to have a work allowance, so they can earn up to £404 a month before their income from universal credit is affected, or up to £673 a month if they don’t have a housing amount in universal credit.
Sector response to the proposed changes to welfare and work
The government says these measures aim to create a sustainable and effective welfare system. One that opens up employment opportunities, boosts economic growth and tackles spiralling benefits bills. It also aims to ensure that those who cannot work get the support they need. However, the proposed changes have received mixed reactions.
Charities Carers Trust and Carers UK have shared concern over how these changes will impact the millions of unpaid carers in the UK.
Carers Trust’s CEO, Kirsty McHugh, said:
‘Proposals to tighten eligibility criteria for benefits will strike fear into the heart of many carers. Around half a million carers look after someone receiving Personal Insurance Payments (PIP), and nearly 150,000 people rely on both PIP and Carer’s Allowance. Disabled people and their carers are already among the most vulnerable in our society and more likely to live in poverty. Reducing their access to a financial safety net could push them over the edge.
‘Carers already prop up our ailing health and social care system and we cannot introduce welfare changes that leave carers again picking up the pieces. We therefore welcome the commitment in the Green Paper to consider the impact of these changes on carers.’
Helen Walker, Chief Executive of Carers UK, said:
‘While we agree the current system is unfit for purpose and a greater focus on prevention, early intervention and personalised support are much needed, the financial impact of tightening eligibility to essential disability benefits could severely impact on individuals and families who are already struggling financially.
‘Future changes to Personal Independence Payments (PIP) are likely to affect carers’ entitlement to Carer’s Allowance – over half of Carer’s Allowance awards are tied to PIP. Many carers have disabilities or long-term health conditions and caring is a risk factor in having to give up work. 28% of carers are disabled, compared with 18% of non-carers. Around 150,000 unpaid carers also receive both Carer’s Allowance and PIP, relying on these vital benefits to get by.’
Read the full official press release on the government website here
