PIP changes delayed until spring, leaving plaintiffs in limbo for almost a year

Disability pension claimants have been facing more uncertainty for months because the government will not present reform plans until 2025.

Chancellor Rachel Reeves has hinted she hopes to slash the social care bill as part of tight spending plans in the upcoming budget.

But without setting out plans to curb rising spending on disability benefits, the Chancellor has little room to make savings, putting pressure on budgets elsewhere.

The consultation on radical changes to Personal Independence Benefits (PIP) ended in July and since then the government has been silent on the way forward.

Ministers are expected to take a fresh look at the eligibility criteria for the PIP scheme to reduce the group of people eligible for the benefit. However, government sources have pushed back against suggestions that PIP, which is not based on income or employment status, could become means-tested.

In addition to the budget, Work and Pensions Secretary Liz Kendall will publish an employment white paper at the end of this month, focusing on changing Employment Office support to get more people into work.

Around 2.6 million working age people claim PIP and Disability Living Allowance (DLA), and 33,000 new PIP benefits are received every month.

This is expected to cost taxpayers £28 billion a year by 2028/29, an increase in spending of 110% since 2019. The Chancellor is under pressure to plug what she says is a £22 billion financial black hole left by the last decade of government, but has limited ability to raise taxes. She also announced that her goal was to “develop the economy.”

Long-term reductions in social welfare spending and encouraging more people to work where possible are seen as an essential means of stimulating the economy.

But AND understands that ministers plan to introduce disability pension reforms only later, in spring. “At the moment our focus is on the employment white paper. We plan to publish our proposals for disability benefits in the spring,” a senior government source said.

What are the proposed PIP reforms?

Consultations on the future of PIP began under the previous Conservative government. When Labor won the election, they said they would consider the results of the consultation before deciding on their next steps.

What changes are being considered?

Tiered payments

One option considered during the consultation was the Norwegian model, in which people are awarded tiered payments depending on their individual condition and specific needs. Under the Norwegian ‘Basic Benefit’, payments are made based on the severity of the patient’s condition, equipment, clinical needs and other support. A maximum of six levels are suggested.

Change of eligibility criteria

Another option being considered is to make changes to the eligibility criteria to make them more targeted. This could make it more difficult for people with certain conditions to receive benefits, while improving access for others. The consultation document suggests it aims to extend the qualifying period for PIP to better understand the impact of long-term conditions and enable the identification of short-term conditions from which there can be a “full recovery”.

Reconstruction of the assessment process

Changing the unpopular PIP assessment process could mean it focuses more on a person’s condition or disability, rather than arbitrary tests to check whether a person is mobile and independent. This may require an assessment by someone with more detailed health knowledge.

Switch to vouchers or one-off payments

The consultation also examined whether some people with certain conditions should receive PIP in the same way in the form of cash transfers, or whether they could instead apply for services in their own home, such as the installation of handrails, a chairlift or vouchers. The consultation document suggests the DWP is considering several alternatives, including a ‘catalog’ scheme allowing people to access specific equipment and support at a reduced cost, or a voucher scheme that could be used for both support and general services.

We offer further support for PIP applicants

The consultation document also indicates that the government is considering trying to better link the PIP system with support from the NHS and local authorities.

The continued increase in social care spending is driven by the costs of pensions and sickness benefits. As a result, it will be difficult to find any welfare savings – promised by sources close to Reeves – without significant reforms to disability benefits.

According to A Resolution Foundation A report published earlier this year found that social care spending is expected to increase by more than £20 billion a year by the end of the next parliament, driven by rising spending on pensioners and people with health conditions.

The report said that with this rise, more than 90p of every extra pound would be spent on the state pension and disability and incapacity benefits.

In Labour’s manifesto, the party said it would tackle the backlog of access to work, which helps disabled people get into or stay in work. Measures to reduce waiting lists are expected to feature in proposals for a jobs white paper later this month.

Labor has also pledged to change incapacity benefits to enable people to take up employment without fear of losing their benefits if they are unsatisfied with their work.

However, since the election, the new administration has been silent on whether it intends to continue with any of the previous government’s proposals.

According to a government source, most of the 16,000 responses to the PIP consultation were negative. There was a public backlash at the time when it was suggested that the bar could be raised so that people with milder conditions were ineligible, or it could be replaced by a voucher system rather than giving applicants money.

A spokesman for the Department for Work and Pensions said it was “committed to ensuring disabled people have the support they are entitled to and we are in the process of reviewing the responses to the PIP consultation”.

Organizations representing people with disabilities warn that clarity is urgently needed.

Insiders say increased efforts have been made to work with people with disabilities under the new administration. However, they stated that the continuing uncertainty is causing anxiety and concern,

David Southgate, policy manager at disability charity Scope, said: “I think what we really want is certainty about what PIP reforms will look like and what reforms to wider benefits will look like overall.

“There is a lot of anxiety among the disabled community, which is exacerbated by uncertainty about what is happening. We would like to hear as soon as possible what aspects of the consultations the government will continue, as they contained harmful and disturbing proposals.

“We have had some positive conversations with the Government and the Department for Work and Pensions and have insisted that disabled people should be at the heart of these reforms. Ultimately, we want disabled people to be properly consulted and informed about the future appearance of PIP.

“But the flip side of that is that the uncertainty hanging over people with disabilities is really problematic – it causes them a lot of anxiety and frustration.”

Jon Sparkes, chief executive of intellectual disability charity Mencap, warned that any changes to eligibility criteria should not penalize people with complex conditions.

“For many people with learning disabilities, PIP is a vital source of income to cover additional living costs related to the disability, such as bills, travel and personal care. These are not optional expenses. We need to make sure that reform proposals meet their needs.

“But this is about something much broader than benefits. Official figures show that only 5% of people with learning disabilities are in paid employment, but Mencap research shows that 86% of those without a job want to work, with the biggest barrier being the benefits system.”

He said people with learning disabilities “should be protected by the social security system but also welcomed into the labor market” and those unable to work should have “sufficient income to help them lead healthy and happy lives”.

A DWP spokesman said: ‘Our upcoming White Paper Get Britain Working will deliver the change the country is crying out for – breaking down barriers to work for sick and disabled people, creating more jobs and making work pay, by delivering opportunity and economic growth to every part of the country.”