Everything it’s good to learn about PIP modifications and Universal Credit as Labour slashes £5billion off welfare finances and Rachel Reeves blasts ‘damaged system’ in Spring Statement
Chancellor Rachel Reeves today announced further welfare cuts as she confirmed changes for personal independence payment (Pip) and Universal Credit.
The Office for Budget Responsibility found steps to cut welfare set out earlier in March would save £4.8billion after ‘final adjustments’ by the Government.
But this was short of the £5billion envisaged by ministers and came after Ms Reeves confirmed her original cost-cutting plans would have saved £3.4billion.
At her Spring Statement today, the Chancellor said the Universal Credit standard allowance will increase from £92 per week in 2025-26, to £106 per week by 2029-30. It had previously been expected to rise to £107 per week by that year.
Meanwhile the Universal Credit health element – sometimes called incapacity benefits – will be cut by 50 per cent and frozen for new claimants.
As for Pip, this is aimed at helping disabled people in England, Wales and Northern Ireland with the increased cost of living associated with their conditions.
But applicants will need to score a minimum of four points in at least one activity to qualify for the daily living element of the benefit from November 2026.
Ms Reeves said the Government ‘inherited a broken system’ on welfare, adding: ‘More than 1,000 people qualify for personal independence payments every single day and one in eight young people are not in employment, education or training.
‘If we do nothing, that means we are writing off an entire generation. That cannot be right. It is a waste of their potential and it is a waste of their futures.’
Separately, the Government is looking at scrapping the Work Capability Assessment for Universal Credit – the process currently used to determine eligibility for incapacity benefit payments based on someone’s fitness for work.
It will instead be replaced from 2028 by a single assessment considering the impact a person’s disability has on daily living, rather than their fitness to work.
Here, MailOnline looks at what the changes could mean for you monthly income:
Chancellor Rachel Reeves leaves 11 Downing Street in London before today’s spring statement
What is Pip?
Personal Independence Payment (Pip) is a tax-free benefit aimed at helping the disabled with the increased cost of living associated with their conditions.
Pip is currently paid to 3.6million across England, Wales and Northern Ireland. In Scotland, a similar benefit is called the Adult Disability Payment.
Who can get Pip?
Pip is available to those who have a long-term physical or mental health condition or disability as well as difficulty doing certain everyday tasks or getting around because of their condition.
Pip can be paid even to people who are working, have savings or are getting most other benefits. It is not means tested.
What is changing to Pip?
Work and Pensions Secretary Liz Kendall confirmed earlier this month that the Government will legislate for a change to the assessment for the benefit.
She said people will need to score a minimum of four points in at least one activity to qualify for the daily living element of the benefit from November 2026.
Ms Kendall also promised to consult with disabled people and organisations representing them, to ensure the process is ‘fit for purpose now and into the future’.
But she added that the Government will not freeze Pip, as had been rumoured.
How does Pip work?
There are two parts to Pip – 1) the daily living part, if someone needs help with everyday tasks; and 2) the mobility part, if they need help with getting around.
Whether they get one or both parts and how much they get depends on how difficult they find everyday tasks and getting around.
Anyone nearing the end of life such as from a life-limiting illness will automatically get the daily living part – but the mobility part depends on their needs.
How much can you get from Pip?
There is a lower and a higher weekly rate for the daily living part, which is £72.65 and £108.55 respectively.
For the mobility part, the rates are £28.70 for the lower and £75.75 for the higher.
Pip is normally paid every four weeks.
What points number will you need to score for Pip?
From November 2026, claimants will need a minimum of four points to be scored on one of the ‘daily living activities’ used to assess Pip claims in order to receive the daily living element of the benefit.
Daily living activities are classed as ‘preparing food’, ‘eating and ‘drinking’, ‘managing your medicines or treatments’, ‘washing and bathing’, ‘using the toilet’, ‘dressing and undressing’, ‘reading’, ‘managing your money’, ‘socialising and being around other people’ and ‘talking, listening and understanding’.
Currently, someone who receives between eight and 11 points in total will get the daily living part of Pip at a standard rate.
If they get at least 12 points, they get the daily living component at an enhanced rate.
But Labour aims to restrict entitlement to the daily living component to only those who are more severely disabled.
For example, to score four points on ‘washing and bathing’, a claimant ‘needs assistance to be able to wash their body between the shoulders and waist’.
The Government said their planned changes would mean ‘that people who only score the lowest points on each of the PIP daily living activities will lose their entitlement in future’.
There will also be no changes to eligibility for the mobility part.
How is the assessment done?
The Department for Work and Pensions assesses how difficult someone finds daily living and mobility tasks, and will look at four areas for each task.
These are ‘whether you can do it safely’, ‘how long it takes you’, ‘how often your condition affects this activity’ and ‘whether you need help to do it, from a person or using extra equipment’.
How is the assessment changing?
The Government said it will increase face-to-face assessments for Pip to ‘improve the quality of assessment decision while ensuring we continue to meet the needs of those with who may require a different method of assessment’.
Ministers also intend to set out broader reforms to the assessment, after carrying out a review involving experts and stakeholders to adapt and improve it.
What about those who will lose Pip?
The Government said Pip will now be targeted more on those with higher needs by requiring a minimum of four points on one daily living activity, in addition to the existing eligibility criteria.
The Department for Work and Pensions will work with Department of Health and Social Care on the changes.
They say they want to ensure that ‘existing people who claim Pip who may no longer be entitled to the benefit following an award review under new eligibility rules have their health and eligible care needs met’.
The Government added that it is now consulting on how best to achieve this.
The benefits bill has been going up and the Institute for Fiscal Studies expects this to continue
Why is Pip being changed?
The number of people receiving one PIP has risen rapidly over the past five years and the Government believes this is now becoming unsustainable.
The number of working-age people receiving Pip has more than doubled from 15,300 to 35,100 a month since the pandemic.
The number of young people aged 16 to 24 receiving Pip per month has also skyrocketed from 2,967 to 7,857.
The Government believes that over the next five years, if no action is taken, the number of working age people claiming Pip will increase from 2million in 2021 to 4.3million, costing £34.1billion annually.
What is happening to Universal Credit?
Universal Credit is a payment to help with someone’s living costs, and they may be able to get it if they are on a low income, out of work or they cannot work.
The Work Capability Assessment (WCA) is the process currently used to determine eligibility for incapacity benefit payments under Universal Credit based on someone’s fitness for work.
But the Government said it plans to scrap this in 2028, to be replaced by a single assessment considering the impact a person’s disability has on daily living, rather than their fitness to work.
Those applying for extra financial support for health conditions – including Pip, Employment and Support Allowance (ESA) or Universal Credit (Health) – will instead therefore only face one assessment, based on the existing Pip system.
Chancellor Rachel Reeves also said today that the Universal Credit health element – sometimes called incapacity benefits – would be cut by 50 per cent and frozen for new claimants.
Elsewhere, the Universal Credit standard allowance will increase from £92 per week in 2025-26, to £106 per week by 2029-30.
It had previously been expected to rise to £107 per week by that year.
The Government is also consulting on delaying access to the health top-up in Universal Credit until someone is 22 years old ‘so every young person is earning or learning, and on a pathway to success’.
What else is changing?
There is also going to be a consultation on raising the age at which young people can move to Pip from Disability Living Allowance (DLA) for Children, from 16 to 18.
