PM is under increasing pressure over targeting of incapacity and disability benefits. We look at some key questions
Which benefits is Keir Starmer’s government planning to cut and why?
PM is under increasing pressure over targeting of incapacity and disability benefits. We look at some key questions
The government is under increasing pressure over its plan to save billions of pounds on the welfare bill by cutting spending on incapacity and disability benefits. Here we look at what changes are proposed and why.
Which benefits face cuts?
Labour is sticking to Conservative plans to cut spending on UK incapacity benefits by £3bn by the end of the parliament. There are reports ministers will seek further billions by reducing eligibility for personal independence payments (Pips). If the mooted level of cuts is true, this would be the biggest reduction to benefits since 2015, when the then Tory chancellor, George Osborne, was in his austerity-era pomp.
Q&A
What mental health and benefits support is available?
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What’s the difference between incapacity benefits and disability benefits?
Incapacity benefits – sometimes known as sickness benefits – are means-tested payments made mainly through universal credit. Claimants assessed as having “limited capability for work-related activity” receive £5,000 a year on top of the standard universal credit award and are exempted from having to find work. Disability benefits are not means-tested, and intended to help meet the additional living costs of disability. Pip is the main disability benefit. Depending on the assessed level of disability, a claimant can receive between £1,500 and £9,610 a year.
Are these big numbers?
Yes, but not out of the ordinary. Overall spending on working-age adult benefits, at about 5% of UK GDP, has changed little in two decades, according to the Joseph Rowntree Foundation (JRF). The UK spends more on incapacity and disability benefits than it did before, but this is offset by reductions in spending on other working-age benefits. JRF points out that over the same period, benefit spending on pensioners rose from 5.3% to 6% of GDP, an increase yet to attract the same political attention.
Are benefit changes just about cutting the size of the bill?
The government says its mission is to make “principled” changes to a “broken” benefits system to help ill and disabled people to move into work – not just cuts. It will provide incapacity benefit claimants with tailored skills and job support, while reducing “cliff edge” risks that people could lose benefits if a job does not work out. Campaigners say “arbitrary cuts” will push some incapacity benefit claimants further from the job market. It is unclear how cuts to Pip, which is not an out-of-work benefit and can enable recipients to keep a job, will increase employability among disabled people.
Why are more people claiming incapacity and disability benefits?
About one in 10 of the UK’s working-age population receive incapacity or disability benefit or both, a rise of 1 million since 2019. Mental illness accounts for about four in 10 of all new claims and about 70% of claims by young adults. This rise has led to jibes about a “mental health culture” that is supposedly being exploited by “snowflakes”. A more prosaic driver of increased incapacity benefit take-up is the rise in the state pension age: government statistics indicate more people waiting longer to retire accounts for a third of the growth over the last five years.
Does the rise in benefit take-up reflect a worsening of the UK population’s health?
The increase in working-age people with poor health and disability after a decade of austerity followed by Covid-19 is broadly consistent with the growth in incapacity and disability benefits, according to JRF. In other words, demand for these benefits is not out of line with need.
Has it become easier to claim disability benefits?
Despite claims the benefits system is a “soft touch” it is not obvious its complex application forms and notoriously stressful health assessments are any easier to navigate. JRF says that while Pip applications have risen over the last five years, the proportion approved, at 51%, has fallen from 55%, suggesting the threshold is as rigorous as ever.
Who will be affected by cuts to incapacity and disability benefits?
The poorest households will be hit hardest. About 900,000 children live in families on incapacity benefit, undermining Labour’s child poverty ambitions. The party also promised in its manifesto to cut food bank use; JRF says 24% of people on sickness benefits used a food bank last year, a figure likely to rise if benefit cuts go through.
