How changes to the welfare bill affects your PIP and Universal Credit payments
BRITS on Universal Credit and PIP will see fewer changes to their payments after the Government U-turned on its welfare bill this week.
Sir Keir Starmer had been hoping to push through welfare reforms that would have seen a crackdown on payments to some benefits claimants.
The reforms were aimed at saving billions of pounds on Britain’s welfare bill, which is set to balloon in the next five years.
The Government has projected the number of working-age claimants of Personal Independence Payments (PIP) will rise from 2.7million in 2023-24 to 4.3million in 2029-30.
Meanwhile the Office for Budget Responsibility (OBR) has estimated the overall cost of the working-age benefit system would rise from £48.5billion last year to £75.7billion by 2030.
The reforms would have seen disabled Brits facing stricter tests for claiming PIP payments and a freeze on the health payment element of Universal Credit.
But in a major defeat for the Government this week, 49 Labour MPs rebelled against the welfare reforms.
It forced the prime minister to shelve the controversial reforms so the bill would not have to be scrapped entirely.
The bill will return to the Commons for a third reading on Wednesday before it can be passed.
Here is what the latest changes mean for you…
Personal Independence Payments (PIP)
PIP is the main benefit for people with a disability.
It’s for people under state pension age who need help with daily activities or getting around because of a long-term illness or disability.
Payments currently start at £1,500 but can rise to £9,600.
The daily living rate comes in at £73.90 for the lower rate and £110.40 for the higher rate.
The mobility rate is worth £29.20 and rises to £77.05 for the higher rate.
Under the Government’s plans, PIP claimants would have faced stricter tests to qualify for support.
The assessments involve questions about how difficult a person finds everyday tasks, and they give a score from zero (for no difficulty) to 12 (for most difficulty).
Needing help to wash your hair scores two points but needing help to wash between the shoulders and waist is worth four points.
The Government had proposed that people would need to score four points in one task such as washing and dressing to qualify for support.
Currently they can qualify with eight points across multiple activities.
Ahead of the bill’s second reading last week, Work and Pensions Secretary Liz Kendall announced a partial U-turn.
She said the changes would only come into effect in November 2026 and anyone claiming the benefit before that date would not be subject to the new rules.
That meant it would only affect new PIP claimants.
But following the rebellion by Labour MPs, the proposal has been scrapped entirely.
It means no changes are going to be made until after a further review has taken place.
The review is being led by Welfare Minister Sir Stephen Timms, who will work with disabled people and charities.
The review will consider:
- The role of the PIP assessment – as the future single gateway to health-related and disability benefits
- The assessment criteria – including activities, descriptors and points
- Whether any other evidence should be considered alongside the assessment
- How the PIP assessment could provide fair access to support across the benefits system
The review will be finished by autumn next year and its findings will be reported to the Work and Pensions Secretary.
That means it’s not clear yet what recommendations will be made and what will be placed into law.
Universal Credit
The Government had also planned to make major changes to the health element of Universal Credit.
More than three million Universal Credit recipients don’t have to find work due to their poor health.
A single person who is aged 25 or over can receive the basic level of the benefit, which comes in at £400.14 every month.
But those getting an incapacity top-up due to a disability or long-term condition can get an extra £422.37 – more than double the original payment.
The new plans mean that anyone up to the age of 22 will not be able to claim the health element.
Ministers had tried to freeze the payment for the next four years but a commitment has been made for it to go up with inflation.
That means people claiming the health element of Universal Credit and new claimants with the most severe conditions will see their incomes protected in real terms.
Existing claimants will get £97 per week until the end of the decade.
However, new claimants from 2026 will see the health element drop from £97 a week to £50 a week.
Everything you need to know about Universal Credit
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?
