How the government's welfare reforms could affect you

The government's controversial plans to slash the welfare bill by £5 billion have sparked a major backlash.

Work and Pensions Secretary Liz Kendall unveiled a major benefits overhaul last week – a key project for the government. In a statement to Parliament, Kendall said the changes, which need to be consulted on, will "boost employment and tackle the broken benefits system to unlock growth" by encouraging more people into work and reducing reliance on disability benefits.

But the government has faced a "furious backlash" since laying out its plans, said the Press Association. Accused by critics of "seeking to balance the public finances on the backs of some of the poorest people in society", various ministers have been forced to defend the reforms.

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And a "mass resignation" of Labour councillors may be brewing over the latest decision, said The Telegraph. Arguing the party has "abandoned its mission to help the poor", some are expected to "consider resignation" following May's local elections.

Without action, government figures suggest the health and disability benefits bill will reach £70 billion a year by the end of the decade, or more than £1 billion a week.

The government is using a "carrot and stick" approach, said MoneyWeek, to reduce the number of people who are out of work and cut the rising welfare bill.

The end of work capability assessments

Work capability assessments are used to decide if someone is fit to work, and if they can receive additional benefits payments "because of a health condition or disability", said the BBC.

But Kendall said these assessments will be scrapped in 2028, claiming they are "dysfunctional" and "drive people into dependency".

It will be replaced by a single assessment considering the impact of disability on daily living, not on the capacity to work.

Personal independence payments (PIPs) reform

The number of people receiving personal independence payments (PIP), separate disability benefits that are not linked to work, has "risen rapidly and is becoming unsustainable", said Kendall.

The "most contentious element of the changes" will involve the government launching a review into longer term reform of the PIPs assessment, said The Times.

The payments will not be frozen "as had been rumoured", said Big Issue, but eligibility criteria are being tightened. Applicants will need to score a minimum of four points in at least one activity to qualify for the "daily living element" of PIPs from November 2026. This is a "high bar", said The Guardian.

Needing prompting to make food, help with washing and dressing the lower body and needing help to engage with others "are all measures that score below a four".

The Resolution Foundation think tank warned that "making it harder to qualify" for PIPs will mean "between 800,000 and 1.2 million people are set to lose support of between £4,200 and £6,300 per year by 2029-30".

Universal Credit changes

Kendall is aiming to address Universal Credit payments as those permanently signed off work because of sickness currently receive a health top-up payment. These individuals receive more than twice as much as those looking for work.

To "rebalance" this, said The Guardian, the health top-up will be frozen for existing claimants and cut for new claimants from £97 to £50 per week from 2026.

But to mitigate – "although it will not fully compensate" – there will be a permanent above-inflation rise to the standard rate of Universal Credit, working out at a £775 annual increase in cash terms by 2029/30.

However, not everyone will benefit. "Young Brits" under the age of 22 won't be able to claim extra Universal Credit support for health conditions or disabilities, said The Sun. The measure is part of efforts to encourage them into work first.

'Right to try'

The government said it will issue a "right to try" guarantee, ensuring that someone trying work will not then have an immediate reassessment or award review.

This aims to "reduce the jeopardy of trying a job", said The Times, as currently it can mean a "significant fall in income if people later go back to jobseekers’ benefits".

While the government said it will invest £1 billion into employment support, there are warnings that the overall welfare cuts will be "catastrophic for disabled people's living standards".

Almost half of families living in poverty already include someone who is disabled, and "now the government is choosing to penalise some of the poorest people in our society", said disability charity Scope.