BENEFITS HIT
DWP benefit cuts CONFIRMED including major change to PIP eligibility and Universal Credit – what does it mean for you?
Plus, the Government will abolish Work Capability Assessments
A SWEEPING package of benefit cuts has been unveiled today in a bid to curb the soaring costs of the country's welfare system.
The cuts come ahead of the Spring Statement which is set to see pre-election promises to limit tax rises and tightly control borrowing meet the reality of lower-than-expected growth and tax revenues.
1
The welfare budget, which already exceeds the nation's defence spending and is forecast to surpass £100 billion by 2030, is now set for significant cuts.
Among the key measures are reforms to personal independence payments (PIP) and Universal Credit, which include:
- Merging jobseekers' allowance and employment support allowance, where people who have worked get more than those who have not
- Scrapping the Work Capability Assessment by 2028, with all health payments made via PIP in the future
- Under-22s to be banned entirely from claiming Universal Credit incapacity benefits
- An above-inflation rise to the standard allowance of Universal Credit, but the highest incapacity payment cut
- A much higher bar for people to claim Personal Independence Payments to save £5billion a year
- A "right to try" scheme that allows jobless Brits to have a go at working without losing their benefits if they cannot manage
The Government aims to achieve savings of up to £6billion through these measures.
Read more in money
This afternoon, Secretary of State for Work and Pensions, Liz Kendall, unveiled the details of the reforms in Parliament.
At the same time, the Department for Work and Pensions (DWP) released its green paper outlining the changes, which will be subject to consultation in the coming months.
10 PIP freebies worth up to £40k
Here we explain exactly what the changes could mean for you.
Tougher PIP assessments
It will be harder to claim Personal Independence Payments (PIP), which is a non-means tested benefit that supports those with health conditions and is currently worth up to £108 per week.
Most read in Money
People must get a minimum of four points in at least one of the daily living activities which are used to assess whether you need the benefit to get the payment.
At present, it's possible to qualify for the benefit with a lower overall score spread across multiple activities.
This means some people who claim PIP could lose the benefit as it will apply to new and existing claims.
There will be a review of the PIP assessment process.
People with severe conditions will be exempt from undergoing further reassessments.
At present the Disability Living Allowance is paid to children under 16, then you move on to PIP. It is also considering whether to raise this transition age to 18.
Under-22s to be banned entirely from claiming Universal Credit incapacity benefits.
The proposed reforms scheduled to take effect in the next financial year, pending parliamentary approval.
What is PIP and who is eligible?
HOUSEHOLDS suffering from a long-term illness, disability or mental health condition can get extra help through personal independence payments (PIP).
The maximum you can receive from the Government benefit is £184.30 a week.
PIP is for those over 16 and under the state pension age, currently 66.
Crucially, you must also have a health condition or disability where you either have had difficulties with daily living or getting around - or both - for three months, and you expect these difficulties to continue for at least nine months (unless you're terminally ill with less than 12 months to live).
You can also claim PIP if you're in or out of work and if you're already getting limited capability for work and work-related activity (LCWRA) payments if you claim Universal Credit.
PIP is made up of two parts and whether you get one or both of these depends on how severely your condition affects you.
You may get the mobility part of PIP if you need help going out or moving around. The weekly rate for this is either £28.70 or £75.75.
On the daily living part of PIP, the weekly rate is either £72.65 or £105.55 - and you could get both elements, so up to £184.30 in total.
You can claim PIP at the same time as other benefits, except the armed forces independence payment.
Universal Credit health assessments scrapped
The Work Capability Assessment, which determines whether someone is deemed fit for work or has limited capability for work (LCW) or limited capability for work-related activity (LCWRA), will be scrapped by 2028.
Instead, the only assessment to determine eligibility for additional financial support related to health would via PIP.
Those under the age of 22 will also be banned from claiming Universal Credit health element.
This proposal is intended to redirect resources towards the Youth Guarantee, focusing on getting young people into work or training.
What are Work Capability Assessments?
The DWP uses the Work Capability Assessment (WCA) to evaluate a claimant's ability to work when applying for Universal Credit due to a health condition or disability.
The WCA focuses on assessing functional limitations rather than specific medical diagnoses.
It considers both physical and mental health, awarding points based on how an individual’s condition impacts their ability to carry out daily activities.
After the assessment, claimants may be placed into one of two groups - Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
Claimants assigned to the LCW group are recognised as currently unfit for work but may be capable of returning to employment in the future with the right support and assistance.
Those in this group are required to engage in work-related activities, such as attending Jobcentre appointments or training courses.
Failure to comply with these requirements may result in sanctions, including a reduction or suspension of benefits.
Claimants are placed in the LCWRA group if their health condition or disability is considered so severe that they are not expected to be able to work or participate in any work-related activities in the foreseeable future.
Those in the LCWRA group receive an additional amount on top of their standard Universal Credit allowance currently worth £416.19 a month.
Universal credit payment boost
The standard Universal Credit allowance will be increased, while the health element will be reduced for new claimants.
By 2029-30, this change will see people on Universal Credit rise by £775 per year.
The change is designed to help support people back into work.
Anyone who currently gets the Limited Capability for Work-Related Activity payment (LCWRA) will get a protected payment of £416.19 per month.
A new premium is proposed for those with the most severe, lifelong conditions who cannot work.
The Government is also taking steps to remove barriers to employment for benefit claimants by introducing legislation to ensure that attempting work will not automatically trigger a reassessment or review of their award.
The intention is to give people the confidence to try work without fear of immediately losing their benefits if it doesn't work out.
The proposed reforms scheduled to take effect in the next financial year, pending parliamentary approval.
What is the Universal Credit standard allowance?
UNIVERSAL Credit is a welfare scheme which was designed to combine several of the old "legacy benefits
The standard allowance is the basic monthly payment provided to individuals or families who qualify.
The amount you receive depends on your age and whether you're single or in a couple:
- Single, under 25: £311.68
- Single, 25 or over: £393.45
- Couple, both under 25: £489.23
- Couple, one or both 25 or over: £617.60
You may also be eligible for additional amounts if you have children, have a disability or health condition, or need help with housing costs.
Merging benefits
The Government has also put forward plans to merge new style jobseeker's allowance (JSA) and new style employment and support allowance (ESA) into a single benefit called "Unemployment Insurance."
This new benefit would provide payments at the same rate as ESA, set at £138 per week, and would be time-limited.
Eligibility would not be determined solely by whether an individual has previously worked, but instead by their National Insurance contributions.
Those with a recent work history and sufficient contributions would qualify.
Individuals claiming the new Unemployment Insurance benefit would be required to actively seek work, although reasonable adjustments would be made for those with health conditions that limit their ability to work.
However, the introduction of this benefit would bring an end to the current indefinite entitlement to new style ESA for those assessed as having LCWRA.
Once the time-limited period ends, claimants who remain unemployed would need to apply for Universal Credit, subject to their personal circumstances.
What is new style JSA and ESA?
NEW style jobseeker's Allowance (JSA) and new style employment and support allowance (ESA) are contributory benefits for people who have recently become unemployed.
Eligibility is based on an individual's National Insurance contribution record, and claimants are expected to actively look for work to continue receiving these payments.
New style JSA is for those who are able to work, while new style ESA is for those whose ability to work is limited by a health condition or disability, with the latter requiring a Work Capability Assessment.
What else was announced?
The Government has also confirmed significant changes to statutory sick pay (SSP) rules, which are set to affect millions of workers.
Under the previous system, only individuals earning an average of more than £123 per week were eligible for SSP, receiving £116.75 per week if unable to work due to illness.
The new changes, effective from April, will extend eligibility to up to 1.3million low-paid workers who become ill.
Read More on The Sun
Under the revised system, they will receive either 80% of their average weekly earnings or the new SSP rate of £118.75 per week - whichever amount is lower.
This change will be legislated through a Government amendment to the Employment Rights Bill, which also grants employees the legal right to request flexible working arrangements from the very first day of their employment.
Topics