Short-sighted savings won’t fix health and disability benefits
Plans to bring down the benefits bill could push disabled people into poverty and away from work
The government has promised to reduce the cost of health and disability benefits. Potential changes are likely to make benefit rules stricter or reduce the money people get. But this approach will push many disabled people — and their families — into poverty. The government says it wants to encourage more people to work. But removing people’s benefits won’t achieve this. In fact, it could do the opposite, especially if employment support isn’t improved. The government must instead address why more people are claiming health-related benefits.
There are 2 types of health-related benefits for working-age people:
- Incapacity benefits. You might receive these if you have a low income and a long-term health condition which means you can’t work. New claimants get the limited capability for work and work-related activity (LCWRA) element of Universal Credit
- Disability benefits. These help cover the extra costs associated with a disability or health condition. The main disability benefit in England and Wales is Personal Independence Payment (PIP)
The government is planning big reforms to health-related benefits
Bringing down the benefits bill is not a new priority. The last government aimed to cut spending on incapacity benefits. They wanted to reform the Work Capability Assessment (WCA), which checks if someone is fit to work. Their suggested changes would make the assessment criteria stricter, so fewer people would qualify for the LCWRA payment in Universal Credit. The current government has said they will make these savings and re-consult on the original proposals.
Media reports suggest the government could go beyond these WCA changes. This could include changes to PIP, like providing one-off (rather than regular) payments. Other potential reforms might make it harder to claim if you have a mental health condition.
The disabled people we help can’t afford to lose their benefits
Making benefits harder to get or reducing the money people receive will push many disabled people into poverty. If the plans to tighten the WCA go ahead, over 400,000 people will lose the LCWRA element of Universal Credit by 2028/2029. That means losing £416 a month, or nearly £5,000 a year. On average, the disabled people we help with debt who receive Universal Credit already have a £17 shortfall in their budget each month. This means their essential costs, such as food, housing, and care, are £17 more than their monthly income. For many, losing the LCWRA payment will mean being pushed further into the red.
PIP is also vital for the people we support. Life costs more if you’re disabled, and PIP helps people cover these extra costs. The disabled people we help with debt are 12% more likely to be in a negative budget if they don’t receive PIP (a negative budget is where your monthly income isn’t enough to cover your essential costs). We can already see the impact losing PIP has on the disabled people we help. When our debt clients lose PIP, they cut their spending on health and care by an average of over £200 a month. They also spend an average of £130 less on food each month. Cutting back on these essential costs is likely to lead to worsening health outcomes.
Reforms could push people further from work
Making the WCA stricter will mean more people will have to look for, or prepare for work. But estimates say only 3% of those affected by the planned changes to the WCA would move into work as a result. The WCA changes would mean more people would meet with work coaches. Their job includes helping people find and stay in work. But often, work coaches aren’t providing the right support, especially for those with health conditions. The government says they’ll reform employment support, but change is likely to be slow. What’s more, the WCA reforms risk undermining already low levels of trust in the benefits system. A lack of trust means that people may be less likely to engage with genuine offers of support to move into work.
There’s a misconception that reducing people’s benefits will encourage them to work. In reality, for many, their health condition means work is not an option. Others may rely on health-related benefits to enable them to work. When someone struggles to pay for basics like clothes and transport, it becomes tougher to find and keep a job. If you can’t afford food, heating, or health costs, your health may worsen. This can push you further away from work.
Another way forward
We know the government is concerned about the rising demand for health-related benefits. But tightening eligibility criteria or reducing the value of benefits won’t reduce the number of people who need support. Instead, it will only reduce the number of people getting the help they need. The government must address why more people need support.
A substantial proportion of the rise in claims is because of predictable factors like a higher state pension age and an ageing population. But other likely factors include rising levels of poor health and barriers for disabled people in the job market. There are also issues within the benefits system. For people receiving health-related benefits who can and want to work, moving towards employment can be risky. For example, the low standard rate of Universal Credit and the threat of sanctions may discourage some people from trying work. The government must address these issues if they want to bring down demand for health-related benefits.
The government say they want to raise living standards in every part of the UK. Disabled people must be part of these plans. Bringing spending levels down must not come at the cost of pushing people into poverty.
