From today, carers on Carers Support Payment will be able to earn £196 per week without losing your entitlement.
This is an increase of £45 per week, and will enable more carers to balance work and care.
Find out more: https://bit.ly/3XLCZVh
Welfare reforms must be shaped by and for disabled people, the Minister for Social Security and Disability Sir Stephen Timms said today [Monday 7th April], as the official consultation on the government’s proposals begins.
Welfare reforms must be shaped by and for disabled people, the Minister for Social Security and Disability Sir Stephen Timms said today [Monday 07 April], as the official consultation on the Government’s proposals begins.
It comes as the government commits to the establishment of ‘collaboration committees’ to further develop the reforms, bringing together groups of people for specific work areas to provide discussion, challenge, and make recommendations.
Announced on Tuesday 18 March, the proposed reforms will ensure that sick and disabled people have the same opportunities to work as anyone else, and will unlock work, boost living standards, and help grow the economy as part of the government’s Plan for Change.
They will also seek to overhaul the broken benefits system so it supports those who need it, while helping those who can work into jobs and delivering fairness to the taxpayer.
The Minister for Social Security and Disability is urging those likely to be affected by the changes – either individually or through disability charities and organisations – to have their say through the consultation, ensuring their views help shape the proposed changes.
Minister for Social Security and Disability Sir Stephen Timms said: “We inherited a broken welfare system, which incentivises ill-health, locks people out of work and isn’t fit for a future in which so many of us will face long-term health conditions.
“We want a system that genuinely works for disabled people and those with health conditions, as well as the country and the economy, and we want to hear their views and voices at the heart of the new system.
“I encourage people to engage so they can have their say as we listen, learn and deliver support which will help millions into work, put welfare spending on a more sustainable path, and unlock growth as part of our Plan for Change.”
The 12-week consultation on reforms to health and disability support officially launches today with publication of all accessible versions of the Pathways to Work Green Paper.
The proposed reforms aim to support people into work, protect people who can never work and put the welfare system on a sustainable footing so that it can continue to support those in need now and into the future. One in three of us faces a long-term health condition, so we all need a system that can support us to stay in work or get back into work.
The measures are the latest step in the government’s drive to build a modern welfare system that helps people get jobs rather than creating unnecessary barriers, with ministers’ proposed plans set to:
Without changes, it is forecast that the system could cost as much as £70 billion a year by the end of the decade and risk not being there for people when they need it in future.
Issues open for consultation include:
These are part of the wider reforms that also include reintroducing reassessments for people on incapacity benefits who have the capability to work to ensure they have the right support and aren’t indefinitely written off, targeting Personal Independence Payments for those with higher needs, and rebalancing payment levels in Universal Credit.
Unpaid carers who are in employment will benefit from a rise in the earnings limit on Carer Support Payment, allowing them to earn up to £2,340 more per year.
From 7 April, unpaid carers in paid work will be able to earn up to £196 per week, after tax, National Insurance and certain expenses, and still be eligible to claim Carer Support Payment. This is an increase of £45 compared to the previous earnings threshold of £151 and allows carers to work the equivalent of 16 hours at the National Living Wage.
Carers Scotland welcomes this change, which is the largest increase in the earnings limit for the benefit since it was introduced in 1976. It will allow unpaid carers to take on more paid work while receiving Carer Support Payment, providing vital income for those juggling employment with care.
Carer Support Payment is the main carer benefit, replacing Carers Allowance in Scotland. It is available if you spend at least 35 hours a week providing care and support to someone who is disabled, has an illness or long-term condition, who needs extra help as they get older or is affected by addiction.
The earnings limit increase will help unpaid carers in paid employment to stay in work, increasing their earnings potential and providing more financial security. It will also allow many carers whose earnings are above the previous limit to access Carer Support Payment for the first time.
Carers Scotland continues to call for the earnings limit to be tied to the National Living Wage so that carers do not have to reduce their hours as the earnings limit fails to keep up with increases to the National Living Wage. The charity says regulations to formally tie Carer Support Payment to the National Living Wage are vital.
However, for those who are unable to combine paid work and care, the value of Carer Support Payment remains low, despite the additional support of the twice yearly Carer’s Allowance Supplement 1. From 7 April 2025, Carer Support Payment will rise by 1.7% from £81.90 to £83.30 per week, which is less than the price of a first-class postage stamp.
UK Government plans for welfare reform are likely to have a subsequent impact on the Scottish budget and on the already limited incomes of unpaid carers and disabled people in Scotland.
There are an estimated 100,000 unpaid carers living in poverty in Scotland, with carers 56% more likely to be in poverty, and 60% more likely to be in deep poverty, than those without caring responsibilities.
Fiona Collie, Head of Public Affairs and Communications at Carers Scotland, said: “Carers Scotland welcomes the increase in the earnings threshold to £196 which will support more unpaid carers to earn more from paid employment alongside their Carer Support Payment. This change will also enable more carers to claim Carer Support Payment.
“The new threshold amount applies once a carer has taken away deductions for tax, national insurance and half of any pension contribution. Carers may also be able to deduct some of the costs to provide care whilst working.
“We would encourage all carers in employment or who are thinking about returning to employment to find out more about Carer Support Payment and the earnings threshold from the Carers Scotland website or by contacting the Carers UK advice line.”
Local MSP Gordon Macdonald commented: “I welcome this improved support for unpaid carers across the city.
“The Scottish Government to raise the earnings limit for Carer Support Payment once fully launched, based off feedback from carers and support organisations – this is now coming into place and supporting carers throughout the city.
“These changes will increase the number of unpaid carers able to access financial support.
“This is just one of many examples of increased powers in Scotland being used to improve lives here in Edinburgh – we could go so much further with the full powers of independence.
Find out more about Carer Support Payment and the new earnings threshold here on the Carers Scotland website.
Alternatively, you can access the Carers UK helpline from 9am – 6pm Monday to Friday by calling 0808 808 7777 or email advice@carersuk.org at any time.
More unpaid carers in Scotland could benefit from financial support as a key change in eligibility rules comes into effect from 6 April 2025.
The earnings limit for Carer Support Payment will increase from £151 to £196 a week. This means that a carer can earn £45 more a week, after tax, National Insurance and certain expenses, and be eligible for the payment.
The change could mean carers already receiving Carer Support Payment will be able to undertake more paid work and still receive the payment. In addition, many carers earning a take home pay of £10,192 or less a year, who were previously unable to access the additional support could now be eligible.
To receive Carer Support Payment of £83.30 a week, carers also need to be providing 35 hours or more of care a week to someone who receives a qualifying disability benefit.
Carer Support Payment is replacing Carer’s Allowance in Scotland, delivered by the UK Government’s Department for Work and Pensions (DWP).
Social Justice Secretary, Shirley-Anne Somerville said: “The Scottish Government proposed back in 2022 to raise the earnings limit for Carer Support Payment once fully launched. This was on the back of strong feedback from carers and support organisations that the previous limit was set too low.
“The increase puts the earnings limit at a level which equates to 16 hours at the national living wage. Alongside other improvements we have made, this should help more carers to balance paid work with caring and provide more stable financial support.
“The Scottish Government remains committed to ensuring everyone gets the financial support they’re entitled to, despite the UK Government’s recent announcement on changes to welfare.”
Fiona Collie, Head of Public Affairs and Communication at Carers Scotland said: “Carers Scotland welcomes the increase in the earnings threshold to £196 which will support more unpaid carers to earn more from paid employment alongside their Carer Support Payment. This change will also enable more carers to claim Carer Support Payment.
The new threshold amount applies once a carer has taken away deductions for tax, national insurance and half of any pension contribution. Carers may also be able to deduct some of the costs to provide care whilst you are working.
We would encourage all carers in employment or who are thinking about returning to employment to find out more about Carer Support Payment and the earnings threshold from Social Security Scotland or their local carers centre or advice agency.”
Carer Support Payment is a payment of £83.30 a week from 6 April 2025 and is available to carers who are aged 16 or over and who provide unpaid care for 35 hours or more a week to someone who receives a qualifying disability benefit.
Carers need to earn £151 a week (increasing to £196 a week from 6 April 2025) or less after tax, National Insurance and certain expenses. The earnings limit for carers in Scotland who are getting Carer’s Allowance will also increase to £196.
Carers getting Carer’s Allowance in Scotland will have their benefits transferred automatically to Carer Support Payment. This process is due to complete this spring.
1.8 million people on Universal Credit are getting no support to find work, according to latest data.
Whilst an increase was expected, as people move from other benefits to Universal Credit, the rise has increased above expectations, with the number of people receiving the highest level of support across UC and other benefits increasing 50% since the start of the pandemic, between February 2020 and August 2024.
The government is already taking action to get people into work through its plan to get Britain working which will empower local mayors to tackle economic inactivity, overhaul Jobcentres, and deliver a Youth Guarantee so every young person is either earning or learning.
Building on the biggest employment reforms for a generation, Work and Pensions Secretary Liz Kendall is due to announce radical welfare reforms to create a thriving and inclusive labour market – as part of the government’s Plan for Change to unlock work, boost growth and raise living standards.
Work and Pensions Secretary, Rt Hon. Liz Kendall MP, said: “Millions of people have been locked out of work by a failing welfare system which abandons people – when we know there are at least 200,000 people who want to work, and are crying out for the right support and a fair chance.
“This government is determined to fix the broken benefits system we inherited so it genuinely supports people, unlocks work, boosts living standards while putting the welfare bill on a more sustainable footing.”
In the current ‘dysfunctional’ system, a person is placed in binary categories of either “fit for work” or “not fit for work” through the Work Capability Assessment (WCA) – an assessment the government has said it will either reform or replace, so it no longer drives people who want to work to a life on benefits.
Through this process, those not fit for work are told they have Limited Capability for Work Related Activity (LCWRA) – meaning they won’t receive employment support or further engagement from the system at any point following their assessment – effectively abandoning and locking them out of work indefinitely.
The current system, in which people 25 and over on the standard rate of UC get £393.45 a month and those with a health condition get an additional £416.19, gives an incentive for people to say they can’t work – and get locked out of help and support – simply to get by financially.
Over the past five years, 67% of people on Universal Credit who have been through a WCA were considered LCWRA – a symptom of the assessment system pushing people to prove their inability to work for a more generous payout.
The Labour government says it has ‘hit the ground running’ to tackle health-related inactivity at its root, improving the country’s wellness by investing £26 billion in the NHS, delivering 2 million extra appointments to tackle medical waiting lists, and hiring an extra 8,500 mental health workers, so people get the treatment they need to stay healthy and in work.
This comes alongside the £250 million plan to get Britain working and the recently announced 1,000 Work Coaches will be redeployed to offer intensive employment support to around 65,000 sick and disabled people – a ‘downpayment’ on Labour’s plan ‘to restore fairness to our welfare system’.
Families who claim Child Benefit will see an increase in their payment next week, says HM Revenue and Customs (HMRC).
From 7 April 2025, parents will receive £26.05 per week – or £1,354.60 a year – for the eldest or only child and £17.25 per week – or £897 a year – for each additional child. Child Benefit is usually paid every 4 weeks and will automatically be paid into a bank account. There is no limit to how many children parents can claim for.
The quickest and easiest way for parents and carers to claim, view and manage Child Benefit payments is by downloading the free and secure HMRC app. A new function in the app means they get a notification once their claim is received and payment in as little as 3 days.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Extra pounds count and Child Benefit can give your household budget a boost.
“Claiming online or managing your Child Benefit payments via the HMRC app is quick and easy so, if you haven’t already, go to GOV.UK to start your claim today.”
Families have used the app more than 6 million times in the last year to manage their Child Benefit payments, including:
Over 1.2 million parents have claimed their Child Benefit through the HMRC app or via the digital service, since the service went online in May 2023. More than 87% of claims are now digital.
Families are encouraged to claim Child Benefit as soon as they can after their baby is born as it can only be backdated up to 3 months.
To make a claim for Child Benefit, parents will need to create an online HMRC account and will need:
HMRC has released a new youtube video explaining how new parents can make a claim.
If either the claimant or their partner has an individual income of between £60,000 and £80,000, the higher earner will be subject to the High Income Child Benefit Charge. For families who fall into this category, the online Child Benefit tax calculator provides an estimate of how much benefit they will receive, and what the charge may be.
In the Spring Statement, Chancellor of the Exchequer, Rachel Reeves announced a new service as part of the government’s Plan for Change, that will cut red tape for eligible employed parents who are liable to the High Income Child Benefit Charge.
From the summer, families will have the option to report their Child Benefit payments and pay the charge directly through their PAYE tax code instead of filing a Self Assessment tax return.
The new digital service will be optional and those who choose to pay the charge through their Self Assessment can continue to do so.
Families who have previously opted out of Child Benefit payments can opt back in and restart their payments quickly and easily online or via the HMRC app.
A person living in a household subject to the High Income Child Benefit Charge will still receive National Insurance credits if they claim Child Benefit but choose to opt out of receiving payments.
Disability Living Allowance for adults is being replaced by a new Scottish benefit. Work has begun to move the benefit awards of over 66,000 people to Scottish Adult Disability Living Allowance.
The new benefit will now be paid by Social Security Scotland instead of the Department for Work and Pensions.
There will be no gaps in payments or reductions in the support people get because of the transfer.
People getting DLA do not need to do anything as the transfer will happen automatically.
Social Security Scotland will send letters to let people know when their benefit is being moved and another when the move is complete. The transfer process will take four to eight weeks.
Cabinet Secretary for Social Justice, Shirley-Anne Somerville, said: “I am pleased work has begun to transfer the benefit awards of every adult in Scotland currently getting DLA to our new benefit.
“I want to reassure people affected that their payments will transfer safely and securely, with no gaps or reductions to the support they receive.
“The Scottish Government is committed to ensuring everyone gets the financial support they’re entitled to and this has not changed following the UK Government’s announcement on welfare.”
Scottish Adult DLA was introduced to provide support for adults who were still getting DLA on 21 March 2025. Like DLA for adults, it is not open to new applications.
People born after 8 April 1948 can choose to apply for Adult Disability Payment after their transfer to Scottish Adult DLA is complete.
Social Security Scotland recommends anyone thinking of doing this to get independent advice on which benefit is best for them as some people might be better off on one benefit than the other.
Once a decision has been made on their application for Adult Disability Payment they cannot return to Scottish Adult DLA.
Adults of working age who are newly in need of disability support can apply for Adult Disability Payment.
Pensioners can apply for Pension Age Disability Payment, the replacement for Attendance Allowance, in most of Scotland.
Where Pension Age Disability Payment is not yet available, pensioners can apply for Attendance Allowance from the Department for Work and Pensions.
The Department for Work & Pensions (DWP) has reduced the level of support it offers to Universal Credit (UC) claimants due to a shortage of available work coaches at jobcentres, amid government plans to get more people into work and progressing in their careers, according to a new National Audit Office (NAO) report.
DWP relies on its network of 646 jobcentres across Great Britain to help people move
into work and to support those already in work to progress. In November 2024, the
government set out its plans for reforming employment support, including the role of jobcentres.
DWP tailors jobcentre support for UC claimants based on their earnings and personal circumstances. The number of claimants in categories where DWP could require them to receive support from a work coach – which includes the ‘Intensive Work Search’ category for those with the lowest earnings – grew from 2.6 million in October 2023 to 3 million in October 2024.
DWP has increased the number of Intensive Work Search claimants by raising the earnings threshold.
Work coaches play a critical role working directly with claimants to identify their needs and provide support. But partly due to funding constraints, DWP has not had enough work coaches to meet the expected demand for jobcentre support, with shortfalls in five of its seven regions in 2023-24.
DWP has also faced challenges in recruiting and retaining work coaches.
To help manage the shortfall, DWP has prioritised supporting claimants in the
Intensive Work Search category and postponed plans to require ‘Light Touch’
claimants to meet regularly with a work coach.
This resulted in DWP needing an estimated 900 fewer work coaches in 2024-25 than it otherwise would have done.
DWP has also set out measures that jobcentres can implement if work coaches’
caseloads are too high.
From September 2023 to November 2024, 57% of jobcentres used these flexibilities to reduce the support they provide for claimants.
The proportion of Intensive Work Search claimants who move into work each month
has declined in the past two years to below pre-pandemic levels.
There is also substantial variation in performance across DWP’s seven jobcentre
regions and 37 districts. At district level, from December 2023 to November 2024,
Birmingham and Solihull had the lowest average monthly into-work rate (5.5%) and
Northern Scotland had the highest (10.8%).
In November 2024, the government published a white paper that set out its plans for
reforming employment support. The plans include creating a jobs and careers service, bringing together jobcentres with the National Careers Service in England.
The NAO recommends that DWP assesses the impact of the shortfall in work coaches
on jobcentres’ ability to provide people with the intended level of support, and uses the findings to inform the design of its future operating model for employment support.
DWP should also set out the information it will use to monitor jobcentres’ performance so that it can identify and share good practice from those that are doing well, as well as improve how it measures and reports outcomes, with metrics covering factors such as the sustainability and quality of employment.
Gareth Davies, head of the NAO, said: “Helping people move into and progress in work is crucial to boosting productivity and reducing economic inactivity.
“As it takes forward the government’s plans for reforming employment support, DWP should pay close attention to how it can make best use of its work coaches and ensure that people get the support they need.
“Given the key role jobcentres will play in supporting the government’s ambition to
increase the employment rate, DWP should also be transparent about how effective
they are and evaluate the impact of its changes on the system of employment support.”
Sir Geoffrey Clifton-Brown MP, Chair of the Committee of Public Accounts, said: “Jobcentres play an important role in supporting people to access and progress in work. However, a shortage of work coaches is limiting the support available to the growing number of Universal Credit claimants, with over half of jobcentres having to scale back their services.
“Future reforms to employment support will be frustrated without clear evidence on what works in supporting benefit claimants into employment. DWP must strengthen its monitoring of the performance of jobcentres, ensuring every pound spent delivers positive outcomes for individuals and the wider economy.”
Celebrities including Rosie Jones, Sir Stephen Fry and Stanley Tucci have united to express their outrage at the social security cuts announced on Wednesday, saying that they risk pushing even more disabled people to food banks.
The UK government, who were elected on manifesto pledges to end the need for emergency food parcels and to make sure Universal Credit tackles poverty, has published proposals that will make it harder for disabled people to get the payments that help them cover additional costs that they face such as purchasing specialist equipment or travel to healthcare services.
Comedian Rosie Jones, who has cerebral palsy, spoke out about the potential impact of these cuts, saying: “Disabled people are scared of what the future holds if there’s cuts to disability payments, as they are already not enough to cover life’s essentials. Disabled people are far more likely to need to use a food bank and further cuts will only deepen the hardship they are facing.”
Polling done this week by Trussell, an anti-poverty charity which supports a community of 1,400 food banks, indicated that 60% of Brits think the UK government is ‘doing badly’ on reducing the number of people experiencing poverty across the UK.
Actor Brian Cox, who experienced poverty as a child, urged the Government to rethink the plans when he said: “The fact that so many people are having to turn to food banks is a stain on this country.
“This government vowed to tackle the need for emergency food parcels in the UK, yet this decision risks even more people having to seek support. It makes no sense and will have a lasting impact on the lives of so many people already finding it difficult to afford life’s essentials.”
Trussell has already expressed concern that the cuts will have a significant impact on people who are already facing hunger and hardship with 75% of people referred to one of their food banks living in a household where someone is disabled.
Recent research by Trussell indicated that three quarters (77%) of people getting Universal Credit and health or disability payments are already having to go without essentials. Four in 10 (43%) are already missing meals to try and keep up with other essential costs. A fifth (19%) have had to turn to a food bank in just the last month.
Calling for a reversal of the proposals, Sir Stephen Fry said: “Cuts should be for people who can best afford them, not for disabled people, who are amongst the most vulnerable and overlooked of all our population.
“The social security system should be rooted in justice and compassion, fairness and need. It’s not too late to rethink this.”
The celebrities are not alone in thinking that government support should be enough to ensure that no one needs a food bank to survive. Trussell’s data shows that 83% of Brits think the Government is responsible for ensuring disabled people’s essential needs are met.
Two of Trussell’s Ambassadors reflected this, adding their voices to the call for change by saying:
Actor Stanley Tucci has encouraged people to speak out about the risk of the cuts, saying: “It breaks my heart to know so many people in a country as wealthy and developed as UK are experiencing hunger.
“Through my work with Trussell, I know that the reality of these cuts will be parents in disabled families having to skip meals so that they can feed their children. Things don’t have to be this way. We must shout as loud as we can to let the UK government know this plan is wrong.”
If you want to share your thoughts on the proposed cuts, you can email your MP via the Trussell website at https://action.trussell.org.uk/disability-cuts.
Work and Pension Secretary Liz Kendall made a statement to the House of Commons yesterday outlining the main areas of ‘Pathways to Work”, the UK Government’s Green Paper that has been in the rumour mill for weeks. The statement contained some well trailed announcements and some new details, although there are also still some significant gaps in our understanding (writes FRASER of ALLANDER INSTITUTE team).
The Secretary of State’s headline announcement was in line with news over the weekend, which suggested that rates will not be frozen. Instead, the criteria for getting the daily living element of the Personal Independence Payment (PIP) will be raised, with a minimum of four points on one daily living activity.
The Green Paper in this section is heavily focussed on the ‘sustainability’ of the disability benefits system, and on needing to make the system more ‘pro-work.’ It’s worth noting, however, that work status is unrelated to being in receipt of disability benefits, which are designed to address the additional costs of living with a disability, whether or not someone is in work.
Sustainability too is a nebulous concept in this space. But while it makes sense to talk about sustainability of the public finances as a whole, it is not immediately clear that a growing area of spending is necessarily unsustainable, especially when responding to a clear need in society. The Government has choices – for example, to raise taxes or to cut other areas of spending. So far from being a macroeconomic imperative, to focus on disability benefits seems clearly a political choice.
There is little in the way of details of how much the UK Government intends to save in the Green Paper, but the Secretary of State mentioned the much bandied about £5bn by 2029-30 that it intends to include in the OBR forecast. We do not know how much of this figure will be generated from PIP rather than other changes.
What we now know is that the whole of the spending reductions on PIP will come from the lower end of the average award, as it is being driven through the raising the bar for claiming. But that also means that all else equal, even more people will lose access to the benefit. A quick calculation suggests that for every £1bn a year saved, it could mean around a quarter of a million fewer people receiving PIP, which would be a huge change.
This is a significant change, and one for which consequences in Scotland are still unknown. At the moment, the work capability assessment (WCA) is used to assess fitness for work. From 2028, the assessment for PIP will instead be used as the basis for universal credit (UC) elements related to health conditions.
This creates an issue in Scotland, because Social Security Scotland runs its own (different) assessment for Adult Disability Payment (ADP), which is the devolved equivalent of PIP. But UC is a reserved benefit administered by DWP, and that means that potential claimants in Scotland would not have access to the PIP assessment that would be used for determining eligibility for health-related UC elements. And with the PIP assessment being tightened, it will be likely further out of step with ADP.
We’ll have to wait and see what solution there will be to this – the Green Paper merely states that “consideration will be needed.” But this is an important issue that requires action on the part of both UK and Scottish departments to ensure access by claimants to this is maintained. It highlights a broader issue of the interaction between the benefits systems which is likely to be put under further strain as systems evolve separately in Scotland.
On a broader point, these proposed changes come at a time when people in receipt of Employment and Support Allowance are due to be migrated to UC by the end of 2026. Our research with people with learning disabilities showed that many are already really concerned about the upcoming changes, and these will be further changes to an already complex system. It will be crucial to clearly communicate all the changes, particularly in accessible formats.
The Secretary of State also announced a big change in the relative levels of the standard and health elements of UC. The health element of UC – which is paid on top of the standard allowance – will be frozen in cash terms for the rest of the decade for those already in receipt of it, and new claims will be paid at around half the current rate (£50/week compared with the current £97/week). Alongside this, the UK Government says it will uprate the UC standard allowance by more than inflation (6% in 2026-27).
The health element of UC will also be tightened in several ways. One is that claimants will be expected to have “much more active engagement and support” in relation to work. The other large change proposed is the consultation on delaying access to the health element of UC until potential claimants are 22, with the justification being the lower likelihood of those in receipt of that element being in employment as well as the fact that those under 22 will be covered by the Youth Guarantee of employment support, training or an apprenticeship.
We note, however, that employability is an area of devolved competence, and indeed a similar scheme already exists in Scotland.
The UK Government is consulting on an interesting proposal for a unified ‘unemployment insurance’ benefit, which would replace both contribution-based Jobseeker’s Allowance and Employment and Support Allowance with a single, time-limited entitlement. This is a step more in the direction of most European systems, in which contributory systems provide a much higher level of income replacement than UC, although for a limited period of time. The proposed rate is much higher than contributory JSA, which has never been a big part of the welfare system in the UK.
Higher income replacement systems are the basis of highly successful active labour market policy systems such as the Danish ‘flexicurity’ approach, and which could help smooth out cliff-edges in the labour market and incentivise retraining, but this proposal – while probably a good idea – falls well short of that kind of system. In any case, it’s also purely consultative – and as it might well cost money on net (at least in the short run), we wait to see if anything will come of this.
One of the measures mentioned in the Green Paper that could have a big positive impact is the announcement of legislation to guarantee that simply starting work will not lead to a reassessment or award review. The fact that this can happen at the moment is acts as a barrier to entering employment, especially if people want to work but are unsure if it will be a good fit for their situation as they might have to reapply for benefits subsequently.
Our research with people with learning disabilities indicates that this ‘right to try’ approach might work well, as the binary ‘can work/can’t work’ doesn’t fit well for them. Many people want to work and just need the right support – so we are hopeful that some of these changes will provide just that.
PIP is being replaced in Scotland with ADP, and migration is expected to be concluded this year. None of the announcements therefore affect Scottish claimants of ADP, but they do affect the finances of the Scottish Government. As we discussed last week, the Scottish Government’s block grant adjustment is based on the projected expenditure in England and Wales, and therefore a tightening of access to PIP will (all else equal) make the Scottish Budget worse off. It is then the Scottish Government’s decision to move in lockstep or to find the additional funds from other sources.
Because the Green Paper has no costings for how much of the £5bn a year in savings comes from PIP, it’s impossible for us to say how much this will mean for the Scottish Government’s Budget. But the ready-reckoner we provided last time out – showing an effect of £90-115m for every £1bn reduction in PIP spending by the UK Government – still applies.
As we discussed before, the use of the PIP assessment for health-related UC claims is problematic in the absence of any further action, as this is not available in Scotland and the systems are diverging. The UK Government’s Green Paper says this will require “consideration”, but this is a pretty substantial change that we hope will be solved in good time. Given the proposal is for this to be done from April 2026, it is fairly urgent to get this resolved.
Employability support is a devolved area, but the UK Government says it will include an additional £1 billion to create a guarantee of personalised employment, health and skills support. Given that, we’d expect Barnett consequentials to flow from this, but the Green Paper does not explicitly state that – we’ll wait to see if there are news on this.
The restrictions on health-related UC claims for under 22s will apply in Scotland, as it’s a reserved benefit. Notwithstanding the issues with the PIP/ADP assessment compatibility, this is an area where there has certainly been growth in the past few years: in December 2024, 11,300 people aged 16-21 were in receipt of the health element of UC, compared with 4,600 in December 2019.
This gives us a first glimpse of the amount of people that might be affected by this change if it were to be introduced.
Green Paper delivers tiny income gains for up to four million households, at cost of major income losses for those who are too ill to work or no longer qualify for disability benefit support, says RESOLUTION FOUNDATION
The Health and Disability Green Paper will boost Universal Credit (UC) support for up to four million families without any health conditions or disability by around £3 a week. But these tiny gains are overshadowed by reforms that risk causing major income losses for those who are too ill to work, or those who no longer qualify for disability benefits, the Resolution Foundation said yesterday (Tuesday).
The Green Paper today sets out major reforms on entrances into the benefits system, entitlements within the system, and exits into work that aim to cut spending by £5 billion a year by the end of the decade, and change how people interact with the system.
The main savings are to be achieved through restricting entitlement to PIP – a benefit that is paid regardless of whether someone is in work, to compensate for the additional costs of being disabled.
The Foundation says that if the Government plans to save £5 billion from restricting PIP by making it harder to qualify for the ‘daily living’ component, this would mean between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 per year by 2029-30.
With seven-in-ten PIP claimants living in families in the poorest half of the income distribution, these losses will be heavily concentrated among lower-income households. This looks like a short-term ‘scored’ savings exercise, rather than a long-term reform, says the Foundation, given that Ministers have also said they will look again at how PIP is assessed in the future.
Further savings are to be achieved by cutting the level of the health-related LWCRA element within UC, which is currently claimed by 1.6 million people. The proposed cuts are focused on young people (aged 16-21), who may no longer be eligible for any extra support, and those who fall ill in the future, as their additional support will be halved, from £97 per week in 2024-25 to £50 per week in 2026-27.
Reinvesting some of the cuts to health-related UC into boosting the basic award for UC (which, at around £3 more per week, is roughly a sixth of the temporary £20 a week uplift to UC during the pandemic), and greater support for the newly unemployed should benefit up to four million families who don’t receive health-related UC.
Reducing the financial gap between health-related and basic UC should reduce the incentive for people to claim incapacity benefits (which, for a single adult, is over twice as much as basic UC at present). Along with the additional employment support provided to people on UC, the Government hopes this will boost employment, although figures will not be available until the Office for Budget Responsibility publishes its spring forecast next week.
Louise Murphy, Senior Economist at the Resolution Foundation, said: “The package of measures announced in today’s Green Paper should encourage more people into work. But any living standards gains risk being completely over-shadowed by the scale of income losses faced by those who will receive reduced or no support at all – irrespective of whether they’re able to work.
“Around one million people are potentially at risk of losing support from tighter restrictions on PIP, while young people and those who fall ill in the future will lose support from a huge scaling back of incapacity benefits.
“The irony of this Health and Disability Green Paper is that the main beneficiaries are those without health problems or a disability. And while it includes some sensible reforms, too many of the proposals have been driven by the need for short-term savings to meet fiscal rules, rather than long-term reform.The result risks being a major income shock for millions of low-income households.”
The government has published its welfare green paper, which outlines its proposals to reform the welfare system.
In particular, the green paper sets out plans to make it harder for people to qualify for Personal Independence Payments (PIP) — a benefit which people with disabilities and long-term ill-health can claim to help cover the extra costs associated with their disability, and which is not connected to work. In addition, people aged under 22 will not be able to qualify for the health top-up element of Universal Credit.
The government has also announced £1bn additional funding for personalised employment support to help people with disabilities move into work, and that people receiving benefits will be given a “right to try” work without losing their benefits entitlement.
Commenting on the proposals, Helen Undy, Chief Executive of the Money and Mental Health Policy Institute, said: “PIP is an absolute lifeline for thousands of people with mental health problems. It can be the difference between being able to afford basic things like a phone to call your crisis team or help to clean your home, or living in disarray and increasing isolation.
“Making it harder to access will jeopardise people’s financial security and cause serious distress, which won’t set up people to go back into work and to thrive.
“These changes will mean that needing help to wash or get dressed because of your mental health wouldn’t be enough to qualify for PIP.
“The government says it will ensure people with ‘genuine need’ aren’t affected, but we’re really concerned that these new reforms will take us further back to the days when people with mental health problems were treated as less worthy of help than those with physical health issues.
“The new ‘right to try’ a job without losing the benefits is welcome, as is the funding for personalised employment support for people with disabilities or health conditions. But introducing these measures alongside cuts to PIP and stopping young people from getting incapacity benefits will do more harm than good.
“It is a short sighted approach that will have a devastating impact on many people’s finances and mental health, and we urge the government to rethink these plans.”
