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The government has confirmed major concessions to rebel Labour MPs over its planned changes to benefits.
People currently receiving personal independence payment (Pip), or the health element of universal credit, will continue to do so.
However, the planned cuts will still affect future claimants.
What is Pip and how is it changing?
Pip is paid to 3.7 million people who have a long-term physical or mental health condition in England and Wales, up from 2.1m in 2019.
There are two elements – a daily living component and a mobility component. Claimants may be eligible for one or both.
The government now plans to tighten daily living assessments for future claimants. This will not affect those already receiving Pip.
Pip assessments involve questions about tasks like preparing and eating food, washing and getting dressed. Each is scored from zero – for no difficulty – to 12 – for the most severe.
From November 2026, the government says people will need to score at least four points for one activity, instead of qualifying for support across a broad range of tasks.
For example, needing help to wash your hair, or your body below the waist, would be awarded two points, but needing help to wash between the shoulders and waist would equate to four points.
However, the new four-point threshold, even when applied to new claimants only, is now expected to be drawn up together with disability charities. How the scoring will be applied is unclear.
The payments for daily living are:
- A standard rate of £73.90 per week
- An enhanced rate of £110.40 per week
Payments for the mobility element – which are not affected – are:
- A standard rate of £29.20 per week
- An enhanced rate of £77.05 per week
Pip is usually paid every four weeks and is tax-free. It does not depend on someone’s savings or income and does not affect other benefits, or the benefit cap. People can get Pip if they are working.
At present, the payment is made for a fixed period of time between one and 10 years, after which it is reviewed. That could be sooner if someone’s circumstances change.
The government plans more frequent reassessments. However, those with the highest levels of a permanent condition or disability will no longer face reassessment.
How is universal credit changing?
The government also announced changes to universal credit (UC), as part of the Universal Credit and Personal Independence Payment Bill.
More than three million recipients have no requirement to find work due to their health, a number that has risen sharply.
The basic level of universal credit is worth £400.14 a month to a single person who is 25 or over.
But if you have limited capacity to work because of a disability or long term condition, this payment more than doubles, because of an extra top-up worth £423.27.
Under the government’s proposals, claimants will not be eligible to get this incapacity top-up until they are aged 22 or over.
New claimants will also see this top-up fall from £97 extra per week in 2025-26 to £50 a week by 2026-27, before being frozen until the end of 2029-30.
The government had planned to freeze the higher rate for existing health-related claimants but this will now rise in line with inflation.
The basic payment level for universal credit will rise to £106 a week by 2029-30.
Who will be affected by the changes?
The Department for Work and Pensions (DWP) says those who would have received Pip or the UC incapacity top up in the future will lose out financially:
- 430,000 future Pip recipients will lose an average of £4,500 per year
- 730,000 future UC recipients will lose an average of £3,000 per year
However, these calculations don’t take into account the effects of £1bn the government it says it will spend to help those with disabilities and long-term health conditions find work.
In addition, the DWP said 3.8 million families will gain an average of £420 a year from the increase in the standard UC allowance and changes to the assessment process.
The UC changes will apply across the whole of the UK.
The Pip changes will apply in England, Wales and Northern Ireland.
In Scotland, Pip is being phased out and replaced with a separate benefit called the Adult Disability Payment. However, although the new Pip rules won’t apply, any reduction on spending on the benefit by Westminster would have a knock-on effect on the Scottish government’s budget.
What is being done to get more people into work?
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The government has promised to invest £1bn to help disabled people and those with long-term conditions find jobs and stay in work.
The government says it wants to help those who can work back into employment.
It says its £1bn investment will provide “high-quality, tailored and personalised support” to help people find jobs.
The government says it hopes to break the link between trying to get into work and losing benefits.
The work capability assessment, which checks eligibility for the health related top-up to universal credit, will be scrapped by 2028.
Instead, claimants will go through the Pip system to claim a health benefit. The government says they will be assessed on how their disability affects their daily life, rather than on their capacity to work.
While someone can receive universal credit or Pip while in employment, universal credit is means-tested and tapers off as earnings increase, while Pip is not affected by how much someone works or their level of savings.
A new “right to try” system will mean people will not be financially penalised if they take a job which doesn’t work out.
The government will also consult on merging employment and support allowance and jobseeker’s allowance into a single time-limited benefit that is not means-tested. This would be more generous but available for a shorter period.
Why does the government want to cut welfare spending?
The government spends £65bn a year on health and disability-related benefits. This has been projected to rise to £100bn by 2029.
Pip is the second-largest element of the working-age welfare bill, with spending due to almost double to £34bn by 2029-30.
Before announcing its concessions, the government hoped to save £5bn a year by 2030.
The Resolution Foundation think tank suggests the cost of government concessions is likely to be around £3bn.
That’s because changes to Pip are estimated to cost between £1.5bn and £2bn.
It says that undoing the freeze on UC health-related support could cost £1bn.