The government is preparing to announce significant welfare reforms aimed at curbing the rising costs of disability and incapacity benefits.
With spending on these programs projected to increase substantially, ministers are introducing measures to manage expenses while ensuring support remains available for those in need.
Focus on Disability and Incapacity Benefits
Work and Pensions Secretary Liz Kendall is set to outline plans to save approximately £5 billion.
These changes will focus heavily on disability and incapacity benefits, introducing stricter eligibility requirements and increasing the frequency of reassessments.
Individuals with mental health conditions may face additional requirements to actively seek employment, while those with severe disabilities could be exempt from repeated assessments.
To encourage disabled individuals to attempt employment, safeguards will be introduced to ensure they won’t lose benefits if working proves too difficult.
Political Reaction and Challenges
The proposed reforms have already sparked controversy within Labour ranks, with critics calling the changes “shameful.”
While some measures, such as freezing Personal Independence Payment (PIP) rates, have reportedly been abandoned due to internal opposition, resistance to the broader package remains strong.
The welfare package is expected to be finalized in a Cabinet meeting before Kendall formally presents the plan to Parliament.
The government argues that these reforms are morally necessary to improve the system’s fairness and efficiency.
However, balancing these savings with broader economic pressures remains a significant challenge for Chancellor Rachel Reeves.
Rising PIP Claims and Financial Concerns
The announcement follows the release of data highlighting a sharp increase in PIP claimants.
The number of recipients in England and Wales has surged from 2.14 million in 2020 to 3.66 million by early 2025—a 71% increase.
Psychiatric disorders are the most common condition among PIP claimants, accounting for nearly 1.4 million people.
Other prevalent conditions include musculoskeletal diseases and neurological disorders.
The age distribution of claimants has also shifted, with a notable increase in younger recipients under 30.
Economic Impact and Budget Pressures
The government aims to cut spending while addressing economic concerns.
With a £15 billion financial gap to manage, the Chancellor has ruled out higher borrowing or major tax increases, leaving spending cuts as the primary option.
Even with £5 billion in planned savings, overall spending on health and disability benefits is projected to rise by £20 billion over the next five years.
Future Changes and Support for Employment
Proposals include tightening eligibility for PIP by requiring claimants to demonstrate significant difficulty with daily tasks such as washing, dressing, or eating.
Those with degenerative conditions may be exempt from reassessments.
The government is also expected to overhaul the work capability assessment for Universal Credit, introducing stricter rules and potentially reducing the highest benefit rates.
Approximately £1 billion in savings could be redirected to employment support programs designed to help claimants return to work.
Public Response and Next Steps
Cabinet Office Minister Pat McFadden emphasized that reassessments will play a key role in these reforms, stating that long-term sickness benefits should not leave people “languishing forever.”
Meanwhile, Labour Mayor Andy Burnham has warned that changes without improved support could risk pushing more people into poverty.
Liz Kendall has reassured MPs that the reforms are designed to restore trust and fairness in the system while ensuring long-term stability.
With the number of sickness and disability claimants climbing from 2.8 million to 4 million since 2019, ministers argue that reform is essential to prevent further financial strain.
The government’s approach will be closely watched as the debate over welfare reforms continues to unfold.