Some PIP recipients may lose out under welfare cuts

Some current recipients of health and disability benefits are likely to lose out under a planned overhaul of the welfare system, which is expected to tighten eligibility criteria for the Personal Independence Payment (PIP).

Work and Pensions Secretary Liz Kendall will set out how the government intends to reform the health benefits system on Tuesday afternoon, in a move aimed at cutting the growing welfare bill.

Her package of reforms is expected to include more help and support for finding work, and the protection of payments to the most vulnerable.

But the move has faced opposition from within Labour ranks over concern for the potential impact on vulnerable claimants.

The government is hoping to reassure some recipients, and indeed some restless Labour MPs, that they will not lose out when welfare reforms are unveiled later on Tuesday.

Initial reports had suggested PIP – the main disability benefit in England and Wales – would be frozen for a year. But reforms are now expected to focus on eligibility for the benefit instead after pushback from Labour MPs.

On Monday, Kendall insisted her planned changes would be fair, and ministers have said they will protect the most vulnerable.

In practice, this is likely to mean that those clearly unable to work will not face further reassessments of their condition, and will keep the entirety of their payments.

However, the eligibility criteria is set to be tightened for those with less severe conditions, meaning some current recipients will inevitably lose out.

It is expected that unemployed people in receipt of Universal Credit, and who are actively looking for work, will see their benefit levels rise – though this is likely to be by a relatively modest amount.

It is also expected that people with disabilities who try out a job will not lose their existing benefit entitlement if it goes wrong.

The Times reports that sick and disabled benefit claimants will face more frequent reassessments under the reforms, but that people with “permanent or degenerative conditions” may never have to be reassessed.

But the government is still facing resistance from within its own party, with Labour peer Baroness Shami Chakrabarti telling BBC Newsnight it was “wrong in principle” to cut benefits from people suffering from disabilities and illnesses.

Chancellor Rachel Reeves is set to deliver a spring statement on 26 March against the backdrop of worsening economic forecasts, which have increased the need to find savings to allow the government to meet its self-imposed spending rules.

The prime minister’s policy team met Labour MPs last week to discuss savings in the range of £5bn to £6bn from potential welfare reforms.

But Downing Street has said its overhaul is not purely driven by financial concerns.

“I think the prime minister has been clear there is both a moral and an economic case for fixing our broken social security system that’s holding our people back, and our country back,” Sir Keir Starmer’s official spokesman told reporters on Monday.

He added that the changes would put the welfare system “back on a more sustainable path”.

Several disability benefit claimants have told the BBC that speculation about the prospect of looming cuts has been upsetting.

“It’s not a case of not wanting to [work],” said Alison, 56, who lives with her brother in a council property in Southampton. “I think about it all the time. Being on benefits doesn’t make me feel happy.”

Speaking in the Commons on Monday, Social Security Minister Sir Stephen Timms admitted speculation in the run-up to the official announcement had been a source of “anxiety” for claimants, adding: “I’m sad that that’s happened, and that people have been concerned.”

Claimant numbers for PIP and Universal Credit payments have increased significantly in the four years since the pandemic, with total spending on health and disability benefits forecast to rise from £64.7bn in 2023-24 to £100.7bn in 2029-30.

Kendall said on Monday that the government would not “shy away from the decisions that we believe are right to give opportunities to people who can work” but would also maintain “security for those who can’t”.

She added the changes would ensure “trust and fairness in the social security system”.

The previous Conservative government had explored making it harder for younger people with mental health conditions to claim PIP.

But no detailed proposals were announced ahead of the general election last July, which saw Labour return to power after 14 years out of office.

The Conservatives’ shadow work and pensions secretary, Helen Whately, questioned Kendall on Monday reports about unease among the Cabinet.

Whately asked the minister whether there was “collective agreement” on the plans, with Kendall responding that the shadow secretary would have to “show a little patience”.