A huge shake-up of sickness and disability benefits that’s expected to target the soaring number of claims for Personal Independence Payment (PIP) could lead to financial hardship, some experts have warned. They are urging the Department for Work and Pensions to make sure the emphasis is on “fairness and accessibility.”
Personal Independence Payment currently provides individuals with cash support of up to £737.20 every four weeks, or just under £9,600 a year. From April, that will go up to £749.80, or around £9,750 a year. Around 3.6 million are currently claiming PIP, with around 70,000 people a month putting in new applications.
The majority of claimants also receive separate sickness payments from Universal Credit and ESA (Employment and Support Allowance), which pay extra amounts for those deemed too ill to work. These are worth an extra £416 on top of a person’s Universal Credit or a total of £552.80 every four weeks for people on ESA.
Analysts previously suggested that many people may be turning to sickness and disability payments because unemployment benefits alone aren’t enough to live on, based on the fact that other comparable Western nations have not experienced similar rises in claims since the pandemic.
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Labour is planning huge reforms to health and disability benefits that are expected to be announced at or around the time of the Chancellor’s Spring Budget in March. PIP is reported to be the main focus as Rachel Reeves is under pressure to deliver huge spending cuts to get the economy back on track. The value of the pound has fallen sharply and the cost of borrowing has risen to levels not seen for decades.
PIP costs the DWP around £22 billion a year, a figure projected to reach £35 billion over the next five years. The Conservatives had set out a number of options for trimming PIP spending by £12 billion – including replacing cash with vouchers – and while Labour will announce its own set of proposals, it will also be planning to trim expenditure. Potential changes could include restricting eligibility to the most severe and life-long conditions or basing the level of support on receipts submitted for proven health-related costs.
The proposals to cut the number of PIP claims in the next Labour Budget have sparked alarm over reduced levels of support. A spokesperson for law firm Spencer Churchill said: “Cutting Personal Independence Payments would be a concerning move, particularly as this vital benefit provides up to £9,600 a year for those with disabilities. Any reductions would disproportionately affect some of the most vulnerable individuals in society, potentially pushing them further into financial hardship. We urge the government to carefully consider the broader social impact of such measures.
“The proposed reforms to sickness and disability benefits must prioritise fairness and accessibility. While improving the system is a noble aim, any changes that could lead to reduced support for those in need should be approached with caution. Vulnerable groups rely heavily on these benefits to maintain their quality of life.”
Other reforms are due to reform or replace the work capability assessment used to decide who gets extra cash on Universal Credit and ESA if they have handed in sick notes saying they cannot work because of ill health. Labour has already confirmed this is expected to save another £3 billion, the same figure proposed by the previous Government, with radical changes to cut incapacity payments and find more people fit for work.
Chancellor Rachel Reeves has ruled out increasing borrowing and raising taxes following the significant tax increases in October’s Budget, leaving further spending cuts as the only viable option for the upcoming spring statement. Let us know in the comments what spending cuts the Government should announce and how the PIP system could be changed, given that the focus will be on a reduction in expenditure.
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