Benefits reforms announced - what changes will affect you?

Sweeping benefits reforms designed to help disabled and long-term sick people back into work have been announced.

The government believes the “far-reaching” reforms will ensure the welfare system “is fit for purpose and available for future generations”.

What has the government announced?

Standard allowance of universal credit going up

The government will introduce a permanent above-inflation rise to universal credit.

This will work out to an annual increase of £775 in cash terms by 2029/30. 

Eligibility criteria for PIP to be tightened

From November 2026, people will have to score a minimum of four points in at least one activity to qualify for the daily living element of personal independence payments (PIP).

This only relates to the daily living element and won’t affect the mobility component of PIP.

A review of the PIP assessment process will also be carried out.

Work capability assessment to be scrapped in 2028

Extra financial support for health conditions in universal credit will instead be available solely through the PIP assessment.

This means that extra income is based on the impact of a person’s health condition or disability, rather than their ability to work.

People on benefits won’t be penalised for trying out a new job 

This will allow people claiming sickness benefits to try out a new job without having their benefits cut straight away.

Incapacity benefits reduced for people under 22

Ministers will consult on delaying access to the health element of universal credit until a person is aged 22.

The money saved will be reinvested into work support and training opportunities.

More frequent reassessments for PIP claimants

Many people claiming PIP will be reassessed more regularly, with more being done face-to-face.

Reassessments for disabled people who won’t ever be able to work and those with lifelong conditions will end.

JSA and ESA to be merged

Contributions-based jobseeker’s allowance and employment support allowance will be merged into a new time-limited unemployment insurance.

This will be paid at a higher rate without having to prove you can’t work, but people who’ve worked will get more than those who haven’t.

Extra £1bn to be invested in employment support

The Department for Work and Pensions (DWP) will provide “tailored and personalised” support to help sick and disabled people who can work into employment.

Why is the government overhauling the benefits system?

According to the DWP:

• one in 10 people of working age are now claiming a sickness or disability benefit
• nearly 1m young people aren’t in education, employment or training
• 2.8m are out of work because of long-term sickness 

The number of people claiming PIP is a particular concern to ministers, as this is expected to double this decade from 2m to 4.3m.

Figures show that since the pandemic, the number of working-age people receiving PIP has risen from 15,300 to 35,100 a month. 

Meanwhile, the number of 16 to 24-year-olds receiving PIP has gone up from 2,967 to 7,857 a month.

The government believes this is “becoming unsustainable” and could end up costing more than £34bn a year.

Government wants sick and disabled to fulfil potential

“This government will always protect the most severely disabled people to live with dignity,” said prime minister Sir Keir Starmer.

“But we’re not prepared to stand back and do nothing while millions of people - especially young people - who have potential to work and live independent lives, instead become trapped out of work and abandoned by the system. 

“It would be morally bankrupt to let their life chances waste away.”

Work and pensions secretary Liz Kendall added that “we can do better” for the millions of people who have been “locked out of work”.

“Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else,” she said.

“At the same time, we will ensure that our welfare system protects people. 

“There will always be some people who cannot work because of their disability or health condition.”