The Department for Work and Pensions (DWP) is poised to implement changes to the Personal Independence Payment (PIP) disability benefit next year. In the UK, approximately 3.6 million people claim PIP, which aids with the additional costs associated with having a disability or health condition.
The benefit has been a hot topic of public debate over the past year following the previous Tory government’s announcement of major reform plans aimed at reducing welfare system expenditure. According to recent DWP data, around 230,000 individuals lodged their first PIP claim between August and October this year, suggesting that about 80,000 applications are made monthly.
Labour has since confirmed its intention to review the benefit but will not proceed with the former government’s plans. We’ve outlined some of the anticipated changes for 2025 and their potential impact on claimants.
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Early payment dates for the New YearThis isn’t a significant change and is, in fact, an annual occurrence. Some PIP payment dates will shift at the start of January as the DWP does not process benefits on bank holidays.
If your PIP is due on Tuesday, December 31, you will receive your money as usual, reports the Mirror.
However, if your payment is due on New Year’s Day – January 1 – you’ll receive it a day earlier on December 31. This change will affect those who received their cash four weeks earlier on December 4.
Payments due from January 2 will be made as usual, except in Scotland where the New Year celebrations extend into January, so payments will land in accounts earlier on December 31. The Motability £750 payment, known as the New Vehicle Payment, which is a one-off £750 payment to help you get a brand-new car on the Motability Scheme, will be scrapped from January 3.
Alongside this, the £100 New Product Payment for scooters and powered wheelchairs is also being axed. Originally set to end on December 31, 2024 for new customers, it was extended due to festive period opening times.
The payment was first introduced in 2022 to assist Motability customers with rising vehicle costs due to industry disruptions following the COVID-19 pandemic. The scheme allows individuals receiving a disability benefit, with an award for the higher or enhanced rate of the mobility component, to allocate some or all of the payment towards leasing a new car, wheelchair-accessible vehicle, scooter or powered wheelchair.
In addition to a new car, customers also gain insurance, breakdown assistance, servicing, maintenance, tyres and windscreen repairs as part of the package.
To take advantage of this, you’ll need to place an order for your vehicle by the deadline. Collection of your vehicle doesn’t have to be done by January 3, but your order with the dealer must be completed by this date.
This payment is a one-off, not a recurring benefit every time you get a new vehicle. As previously mentioned, the former Tory government published its green paper last year outlining plans to address the escalating costs of the PIP benefit.
Proposals included replacing cash payments with vouchers, grants, or shopping catalogues. However, Labour scrapped this plan and is set to release its own proposals aimed at “overhauling the health and disability benefits system so it better supports people to enter and remain in work and to tackle the spiralling benefits bill”.
Work and Pensions Secretary Liz Kendall recently stated: “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.”
DWP spending on the disability benefit is forecasted to rise by 63% over the next five years, from £21.6 billion in 2023/24 to £35.3 billion in 2028/29. According to statistics, approximately 33,000 more people start receiving the benefit, which is double the rate prior to the COVID-19 pandemic.
Payment rates are set to increase from April.
Benefit rates, which typically increase with inflation each April, are set to rise by 1.7% from April 2025, in line with September’s inflation figure. Personal Independence Payment (PIP) is comprised of two components – a daily living rate and a mobility rate – and claimants can be entitled to either or both.
These components are further divided into the standard rate and the enhanced rate. At present, the standard rate for daily living is £72.65, while the enhanced rate is £108.55.
For the mobility component, the standard rate is £28.70 per week and the enhanced rate is £75.75. If you qualify for both enhanced rates, you could receive £749.80 every four weeks.
Here’s how the increase will affect PIP payments: Daily living Mobility. The Department for Work and Pensions (DWP) will also carry out a study to gather more information on what people use their PIP payments for.
The results will be revealed next summer. This follows questions from MPs about whether PIP adequately covers the additional costs of disability.
Sir Stephen Timms, DWP Minister for Social Security and Disability, recently stated that while PIP does contribute towards the higher costs associated with a disability or health condition, there is “no objective way” to determine an “adequate level of PIP should be, as everyone has different requirements reflecting their own circumstances and priorities”, as everyone’s needs vary based on their individual circumstances and priorities.
“In order to improve the evidence in this area, DWP is now undertaking a new survey of Personal Independence Payment customers to understand more about their disability-related needs. This project has a methodological advisory group including representatives of disabled people’s organisations, disability charities and academic experts. It is expected to produce findings in Summer 2025.”
Representatives from Scope are part of the advisory panel, a move welcomed given their stance that current PIP payments in the UK fall short of covering costs. David Southgate, policy manager at Scope, drives the point home: “Life costs more if you are disabled. Scope research shows that these costs add up to on average £1,010 a month for disabled people to have the same standard of living. The low amount that PIP provides doesn’t go far enough as it is.”
The government has also placed a spotlight on support for getting claimants back to work, announcing funding to be split among 17 NHS regions to explore new approaches to addressing musculoskeletal conditions—a key barrier keeping individuals from employment. Within the group of 2.8 million ‘economically inactive’ Brits, those dealing with muscle and joint pains rank high—following mental health issues.
Approximately 646,000 attribute musculoskeletal disorders as their main reason for not working, and many of these individuals rely on Universal Credit incapacity benefits for long-term sickness.
While the announcement did not specifically mention Personal Independence Payment (PIP), it’s worth noting that this benefit can be claimed whether you’re employed or not. In fact, over 1.1 million individuals claim PIP due to musculoskeletal conditions that affect their daily lives and mobility.
Department for Work and Pensions (DWP) data reveals that these conditions range from various forms of arthritis to back problems, amputations, and issues with shoulders, necks, hips, and knees. Any advancements in treating these conditions could potentially impact those claiming PIP – improved mobility could lead to changes in their payments.
Commenting on the funding announcement, Minister for Employment Alison McGovern said: “For too long, people locked out of work with health issues have been forgotten about and denied the support they need to get well and get working. It’s stifling our economy and preventing those eager to progress in life from unleashing their full potential.”
“This multi-million-pound funding boost means musculoskeletal patients across the country will get the help they need, as we give clinical leaders the resources to innovate, get people off waiting lists and get Britain working again.”