Changes to benefits for disabled people

The current health and disability benefit system

The social security system supports people with health conditions or disabilities and their families in two main ways:

• ‘Income maintenance’ or ‘income replacement’ benefits, intended to cover basic day-to-day living expenses. This includes Universal Credit (UC), and Employment and Support Allowance (ESA) across the UK. UC can include an additional ‘health element’ for adults whose condition limits their ability to work. These benefits are also known as ‘incapacity benefits’.
• Benefits intended to help with extra costs arising from ill health or disability. For people of working age, the main ‘extra costs’ benefit in England, Wales and Northern Ireland is Personal Independence Payment (PIP). Adult Disability Payment is replacing PIP in Scotland.

Department for Work and Pensions (DWP) spending on both disability and incapacity benefits for working-age claimants is estimated to be around £55.1 billion in 2025/26. Claims are forecast to rise in real terms to around £60.7 billion by 2029/30, a 10% increase. Spending on extra costs benefits in Scotland is also forecast to rise.

The ‘Pathways to Work’ green paper

On 18 March 2025, the DWP published a green paper, Pathways to Work: Reforming Benefits and Support to Get Britain Working.

The green paper describes the existing incapacity and disability benefits system as “broken”. It says the system is driving up economic inactivity and driving down opportunity, and failing people by producing poor employment outcomes, low living standards and high costs to the public purse. The government argues that, without reform, spending on health and disability benefits will become unsustainable.

The green paper sets out a range of proposed reforms to health and disability benefits, including two measures which have attracted significant public interest:

• changes to the PIP assessment, including a new requirement for claimants to score four or more points for at least one of the ‘daily living’ activities to qualify for the daily living component of PIP
• “rebalancing” support in UC by reducing the UC health element and increasing the UC standard allowance (the basic amount all UC claimants receive)

Neither proposal is being consulted on. The government says these measures will be introduced by primary legislation in the current parliamentary session, to allow them to be implemented during 2026/27.

PIP daily living changes

At present, PIP claimants can qualify for the daily living component by accumulating low scores across several of the 10 daily living activities in the PIP assessment.

The government proposes introducing an additional requirement that claimants score four or more points in at least one of the activities to qualify for the daily living component. In addition to saving an estimated £4.5 billion a year by 2029/30, the government says this will focus the daily living component on people with higher needs.

The government estimates that, as a result of this change, in 2029/30 around 800,000 people will not receive the daily living component of PIP who would have under the current rules. Of these, 370,000 will be current recipients losing entitlement following an award review, and 430,000 will be future PIP recipients. The average loss is estimated at £4,500 a year.

DWP analysis suggests that people with physical conditions such as back pain or arthritis are most likely to be affected by the changes, while people with learning disabilities, autistic spectrum disorders and attention deficit hyperactivity disorder are least likely to be affected.

Welfare and disability rights organisations, including Trussell, Scope, Disability Rights UK, and Benefits and Work are opposed to the four-point rule, highlighting the scale of the reduction in spending on disability benefits and the effect on individuals. Some also question the government’s claim that the change would focus PIP on people with higher needs.

The Commons Work and Pensions Committee has called on the government to delay changes to the PIP daily living criteria until a wider review of the PIP assessment, also announced in the green paper, has ended. It says the review should engage with disabled people and their organisations to “co-produce proposals for a new PIP.” It also says the government should guarantee that people who need PIP would not lose out.

Changes to Universal Credit rates

The government is proposing to reduce the generosity of the UC health element, which claimants with limited capability for work and work-related activity receive, while also proposing to increase slightly the value of the standard allowance that all UC claimants receive. The value of the health element will be frozen at £97 a week for existing claimants until 2029/30, and reduced to £50 a week for new claimants from 2026/27. The £50 amount will also be frozen for four years.

People receiving the new, reduced UC health element from 2026/27 with the most severe, life-long conditions, who have no prospect of improvement and will never be able to work, will see their incomes protected through a new additional premium. People in this group will also not need to be reassessed in future.

The green paper says these changes will “rebalance payment levels in Universal Credit to promote work, address perverse incentives and to start to improve basic adequacy”, while also supporting people with the most severe needs.

Over £1.1 billion in net savings are expected from the reductions to the UC health element and increase to the standard allowance in 2029/30. The new premium for people with severe, life-long conditions was not costed, as the amount and eligibility criteria had not yet been finalised.

2.25 million existing recipients of the health element will be affected by the freeze, experiencing an average loss of £500 a year. In addition, 730,000 new recipients of the health element from April 2026 will be affected by the reduced rate. This group will experience an average loss of £3,000 a year. These losses will be partially offset by the increase in the standard allowance.

3.9 million households not receiving the UC health element are expected to gain from the increase in the standard allowance, by an average of £265 a year.