Millions left fearful by drastic DWP profit cuts that can depart many worse off

DWP Secretary Liz Kendall unveiled major changes to Personal Independent Payments and Universal Credit as she warned the system is ‘failing the very people it is supposed to help’

Millions of people have been left in fearful limbo by sweeping changes to sickness and disability benefits.

Work and Pensions Secretary Liz Kendall announced plans to overhaul Personal Independent Payments (PIP) and Universal Credit (UC) as she warned the social security system is “failing the very people it is supposed to help” and driving people to depend on welfare. But charities branded the plans “immoral and devastating” and warned more disabled people could be pushed into poverty.

Ms Kendall refused to spell out how many people would be affected until the Office for Budget Responsibility publishes an independent assessment at the Spring Statement next week.

But the Resolution Foundation said plans to restrict eligibility for PIP would see between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 per year by 2029-30. The lifeline benefit – paid regardless of whether someone is in work – helps disabled people with costs associated with daily tasks like assistance with washing and getting dressed.

READ MORE: PIP changes and major benefit cuts unveiled – what 7 key changes means for you

Millions more who claim Universal Credit have been plunged into uncertainty. The IFS thinktank said 2.4million families who receive the health element of UC will get around £280 less a year in 2029-30, while the 4.5 million other families on UC will get £150 more a year in 2029-30. It described the plans as “a bigger cut to welfare than seen in any fiscal event since 2015”.

Mum-of-two Nicola Holmes, said the plans would plunge even more disabled families like hers into poverty, and it was “wrong, unjust and bordering on criminal” to penalise some of the most vulnerable. Nicola, 55, of Tewkesbury, gave up paid work to care for her son Ethan, 18, who has Down’s Syndrome and severe anxiety about leaving his home.

Her daughter Ella, 15, is autistic and has anxiety and is situationally mute. The family receive UC and PIP to supplement the income husband Wayne, 47, gets as a self-employed electrician.

She said: “I’d like to work but I can’t. Ethan is 18 but is like a five-year-old – he can’t get a job pushing trolleys in a supermarket because he wouldn’t be safe – he put my phone in the toaster recently. These changes are going to cause an escalation in mental health and in those needing the services of the NHS. “The system that should be a safety-net is attacking those that need it.”

The blueprint contains plans for an above-inflation rise in the UC standard allowance by 2029-30 – an annual boost of £775. But the health top-up of the benefit will be frozen at £97 per week for existing claimants from April next year. And it will be cut to £50 a week in 2026/27 for new claimants.

Ministers will also scrap the work capability assessment – which determines eligibility for UC – in 2028. Instead, extra financial support for health conditions will be done through PIP based on someone’s health or disability, rather than their capacity to work.

Another major change would delay access to the UC health top-up until claimants are 22-years-old to get them into education, training or work instead. Ministers will consult on raising the age at which young people transfer to disability living allowance for children to PIP from 16 to 18.

The package will also merge Jobseekers Allowance and Employment Support Allowance into contributory employment insurance.

A new “right to try” will be put into law, which Ms Kendall said would let people “take the plunge and try work – without the fear this will put their benefits at risk”. The Government will also invest an additional £1 billion a year by 2029-2030 to support people into work.

The plan aims to slash £5billion a year from the welfare bill by 2029-30. The majority of the savings are expected to come from reducing access to PIP for hundreds of thousands of people. It comes after spending on health and disability-related benefits rocketed following the pandemic – and is forecast to surge to £70bn by 2029.

Ms Kendall told MPs the changes would create “a more proactive, pro-work system for those who can work”, while protecting those who can’t.

She said: “This Government is ambitious for our people and our country, and we believe that unleashing the talents of the British people is the key to our future success. But the social security system we inherited from the Conservatives is failing the very people it is supposed to help and holding our country back.”

Figures show around 4 million working age people claim sickness or disability benefits in England and Wales, up from 2.8 million in 2019. PIP claims are also forecast to double this decade from 2 million to 4.3 million, with the growth in claims rising faster among young people, and those with mental health conditions.

But the plans sparked a fierce backlash as MPs lined up to express alarm. Work and Pensions Committee Chair Debbie Abrahams said:”I would put that there are alternative, more compassionate ways to balance the books rather than on the back of sick and disabled people.”

Former shadow chancellor John McDonnell, who sits as an independent, warned people could die as a result of the cuts. “The reality is trying to find up to £5 billion worth of cuts by manipulating, by changing, the PIP rules, the criteria will result in immense suffering and – we’ve seen it in the past – loss of life,” he said.

Labour MP Clive Lewis demanded to know if ministers understood the “pain and difficulty that this will cause millions of people”. He said: “My constituents, my friends, my family are very angry about this and they do not think this is the kind of action that a Labour government takes.”

TUC General Secretary Paul Nowak urged ministers to reconsider the scale of the cuts. “Disabled people who are unable to work must not be pushed further into hardship,” he said.

Dan Paskins, of Save the Children UK, said: “We fear child poverty levels will rise in families where someone has a disability as a direct result of these reforms.” Some 870,000 children are in households receiving PIP, with 290,000 of these youngsters already in poverty.

He went on: “For a Prime Minister who acknowledged in his manifesto that children’s life chances are being scarred by rising poverty, these changes do not display a serious intent to drive down levels of hardship.”

Charles Gillies, from the MS Society and co-chair at the Disability Benefits Consortium, said: “These immoral and devastating benefits cuts will push more disabled people into poverty, and worsen people’s health. The harmful changes to PIP will make it even harder for disabled people – including many with MS – to manage the overwhelming additional costs of their condition, from wheelchairs to visits from carers.

“And any targeted cuts to disabled people on Universal Credit (UC) and Employment and Support Allowance (ESA) will largely hit those who are unable to work and rely on these benefits to survive. We are united in urging the government to abandon these cruel cuts.”

Louise Murphy, of the Resolution Foundation, said: “The package of measures should encourage more people into work. But any living standards gains risk being completely overshadowed by the scale of income losses faced by those who will receive reduced or no support at all – irrespective of whether they’re able to work.”

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