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Huge welfare reforms could see some lose benefits completely

The Prime Minister Rishi Sunak has outlined a package of sweeping reforms to put work at the heart of welfare and deliver on his “moral mission” to give everyone who is able to work, the best possible chance of staying in, or returning to work.

In a speech today (Friday 19 April), the Prime Minister announced that the disability benefits system is set to be reformed to ensure it’s more accurately targeted at those who need it most and delivers the right kind of support for people with disabilities and health conditions.

A consultation on Personal Independence Payment (PIP) will be published in the coming days which will explore changes to the eligibility criteria, assessment process and types of support that can be offered so the system is better targeted towards individual needs and more closely linked to a person’s condition rather than the current “one size fits all” approach.

It comes as many more working age people are being awarded PIP for mental health conditions than when it was first introduced over a decade ago, as well as concerns that the assessment process is significantly easier to game by individuals who seek to exploit the system.

In 2019, there were an average of around 2,200 new PIP awards a month in England and Wales where the main condition was anxiety and depression – this has more than doubled to 5,300 a month last year. This is driving up the cost of the disability benefits bill at an unsustainable rate and PIP spending alone is expected to grow by 52% from 2023/24 to £32.8bn by 2027/28.

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Total spending on benefits for people of working age with a disability or health condition increased by almost two-thirds to £69 billion since the pandemic, and we now spend more on these benefits than our core schools’ budget or on policing. Given the significant change in caseload and unsustainable increase in costs, it’s clear our current disability benefit system for adults of working age is not fit for purpose.

The Prime Minister has set out his ambition to redesign the disability benefits system to ensure it is fair and compassionate, but also sustainable and fit for the future. The consultation will consider whether alternative interventions to cash payments – such as treatment or access to services – could drive better long-term outcomes particularly for individuals who have less severe or well managed health conditions.

Work and Pensions Secretary Mel Stride said:

“I believe our welfare system is about far more than benefit payments; it is about changing lives for the better.

“That is why we’re bringing forward the next generation of welfare reforms. We’ve already overhauled the outdated benefit system by introducing Universal Credit, and now we are building a new welfare settlement for Britain – one where no one gets left behind.

“The welfare reforms announced by the Prime Minister today will modernise the support available for those who need it the most, improve the value of the welfare system for taxpayers, and ensure that people are signed up to support back to work, not signed off.

Health and Social Care Secretary, Victoria Atkins MP, said:

“These ambitious reforms will give people the help they need in their return to and stay in work.

“We know that people in work often lead happier, healthier lives which is why it’s fundamental to shift attitudes away from sicknotes towards fit notes.

“We are seeking the advice of those who understand the system best so we can break down these unnecessary barriers to work. Through tailored care and reasonable adjustments, we can build a healthier workforce for a healthier economy.”

The review to the disability benefits system to ensure benefits are targeted to those who need it most comes as part of the Prime Minister’s five core welfare reforms to deliver a fairer and more sustainable welfare system for the future. This includes:

Removing benefits entirely from the long-term unemployed who don’t accept a job

There is no excuse for fit and able claimants on unemployment benefits who can work, not to engage with the support available to them or adhere to conditions set by their Work Coach. If someone is assessed as able to work and continues to receive taxpayer funded benefits, it is right and fair that we expect them to engage fully with this process.

There are more than 450,000 people who have been unemployed for 6 months and well over a quarter of a million who have been unemployed for 12 months. These are people who will have had to access intensive employment support and training programmes. There is no reason those people should not be in work, especially when we have over 900,000 vacancies.

The Government will legislate in the next parliament to change the rules so that anyone who has been on benefits for 12 months and doesn’t comply with conditions set by their Work Coach – including accepting available work – will have their unemployment claim closed and their benefits removed entirely.

Being more ambitious in assessing people’s potential for work

The Prime Minister has confirmed that the Work Capability Assessment will be tightened so that people with less severe conditions will be expected to engage with the world of work and supported to do so. Under the current Work Capability Assessment, too many people are effectively being written off as unable to work without the chance to access vital support which could help them enter employment.

“We know that work plays an important role in supporting good mental and physical wellbeing and helps people to lead independent and fulfilling lives. That is why, as a result of these changes, more people with less severe conditions will be expected to look for work and will be provided with tailored support to help them do so.”

“In the long term, we are also committed to removing the Work Capability Assessment (WCA) entirely and introducing a new personalised, tailored approach to employment support, with the aim of helping disabled people and people with health conditions reach their full potential.

“These reforms to the Work Capability Assessment will reduce the number of people assessed as not needing to prepare for work by 424,000 by 2028/29 – that’s hundreds of thousands more people getting the support they need to start to prepare for or get into employment.

The Prime Minister has also announced a review of the fit note system to stop people being written off as “not fit for work” by default and instead design a new system where each fit note conversation focuses on what people can do with the right support in place, rather than what they can’t do.

As part of this, the government will consider shifting the responsibility for issuing the fit note away from primary care to free up valuable time for GPs, while creating a system better tailored to an individual’s health and work needs.

A call for evidence will be published today to seek responses from a diverse range of perspectives, including those with lived experiences, healthcare professionals and employers, both on how the current process works and how it can better support people with health conditions to start, stay, and succeed in work.

Putting work at the heart of welfare

The Prime Minister has announced that the rollout of Universal Credit will be accelerated to move all those left on outdated legacy systems onto a simpler, more dynamic benefit system which eliminates a binary choice between work and welfare.

We will bring forward the transition of those on the legacy ill-health unemployment benefit known as Employment and Support Allowance onto Universal Credit, thereby completing the full rollout of Universal Credit. More than six million people are already benefiting from the modern digital Universal Credit system which allows claimants to access their benefits more easily and amend their claim should their circumstances change.

Many of these individuals will also be better off on Universal Credit and we are committed to providing transitional protection for eligible claimants that are migrated to Universal Credit. This ensures that those claimants will not have a lower entitlement to UC than they did on legacy benefits at the point they transition.

The Prime Minister has also announced that we will change the rules so that someone working less than half of a full-time week will have to look for more work. Today, the government will lay regulations to increase the Administrative Earnings Threshold (AET) which determines how much support an individual will receive to find work, based on how much they currently earn and how many hours they work.

If someone earns below the AET, they are placed in the Intensive Work Search Group and are required to regularly meet with their work coach. We have already taken action to raise this threshold and this legislation will go further to raise it from £743 to £892 for individual claimants and £1,189 to £1,437 for couples – or the equivalent of 18 hours at National Living Wage a week for an individual from next month.

Through these changes alone, over 180,000 Universal Credit claimants will be moved into the Intensive Work Search group, from the Light Touch group, giving them more frequent access to the expertise and guidance of work coaches in Jobcentres across Great Britain. Combined with previous increases, 400,000 more claimants will have more intensive support from our Work Coaches to help them to progress in work and off welfare.

As with previous increases, claimant commitments will be tailored to personal circumstances and will take into account caring responsibilities as well as any health conditions.

Cracking down on fraud

The Prime Minister has committed to introducing a new Fraud Bill in the next Parliament. The measures in the Bill will give us new powers to carry out warrants for searches, seizures and arrests, to enforce civil penalties more consistently and flexibly, and to a wider group of offenders, and provide new powers to gather information from more information holders as part of DWP led investigations into fraud.

This is in addition to legislation we’re introducing through the Data Protection and Digital Information Bill which will enable DWP to receive information from third parties that may signal where fraud is being committed. This is one of the most significant reforms to benefit fraud laws in more than 20 years and will deliver savings to the taxpayer of £600 million by 2028/29.

Taken together this plan will deliver a welfare system that’s fit for the future by providing vital support only to those who need it most and ensuring they are supported to live with dignity and independence, whilst making sure that everyone who can work is expected and supported to do so.

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