Navigating the Shifting Landscape of Welfare: Unpacking Pip and Universal Credit Reforms

In a bid to implement significant changes to the welfare system, Sir Keir Starmer has voiced his support for the Labour party to back the government’s controversial reforms to Personal Independence Payment (PIP) and Universal Credit (UC). The government argues that these reforms are necessary to save £5 billion by 2030, despite an estimated 3.2 million families expected to be worse off as a direct result.

Currently, PIP supports over 3.6 million individuals with long-term disabilities and health conditions in England, Wales, and Northern Ireland. The revised assessments for the daily living component of PIP, which involve evaluating individuals’ capabilities in tasks such as hygiene and meal preparation, are set to tighten eligibility criteria from November 2026. Initially, claimants could qualify with scores as low as one or two points across multiple tasks, but this will change to a requirement of at least four points for one activity.

For the daily living expenses, the current weekly payments include £72.65 for the standard rate and £108.55 for the enhanced rate, with mobility payments remaining stable. The hourly assessment window will also shorten for PIP claimants, while those with permanent disabilities will be exempt from frequent reassessments.

Universal Credit, affecting 7.5 million people, will also see substantial changes. The incapacity top-up, crucial for those unable to work due to health conditions, will no longer be available until claimants turn 22, and those receiving it will see reductions from £97 to £50 per week by 2026-27, impacting existing and future recipients alike. Despite the increases in the standard UC allowance anticipated by 2029, families will face an average loss of £1,720 annually due to these reforms.

The Department for Work and Pensions (DWP) has stated that not only will 3.2 million families incur losses, but a projected 3.8 million will benefit from the UC increases, albeit the initial losses seem significant. Concerns voiced by Labour MPs emphasize the anxiety surrounding the potential impact on disabled individuals, challenging the sustainability and adequacy of the current welfare setup.

Ultimately, the government’s approach aims to enhance support for those able to work while safeguarding the most vulnerable. Plans for a new welfare structure involve scrapping the work capability assessment by 2028, introducing a ”right to try” system for job seekers, and the potential merging of employment-related allowances into a time-limited, more generous benefit package. Balancing the welfare budget is essential, as current spending is already £65 billion annually on health and disability benefits, with projections indicating sharp increases in future welfare costs.