What are PIP disability payments and why could they change?

The UK government is considering adjusting a key disability benefit called Personal Independence Payment (PIP) to cut welfare spending. PIP is designed to provide financial support to people who have difficulty completing daily tasks or moving around due to long-term physical or mental health conditions.

Labour leader Sir Keir Starmer is facing pressure from some MPs and charities over concerns that vulnerable groups may lose out due to tightened eligibility rules or changes in payment methods. PIP comprises two components: a daily living allowance and a mobility allowance, and claimants may be eligible for one or both.

The daily living allowance covers areas where help is needed, such as preparing food, washing, reading, and managing money. The mobility allowance includes physical movement or getting out of the house. Each allowance has two payment rates: a standard rate and an enhanced rate for those with higher needs. The standard daily living rate is £72.65 per week, and the enhanced rate is £108.55 per week. The standard mobility rate is £28.70 per week, and the enhanced rate is £75.75 per week.

PIP is typically paid every four weeks, is tax-free, and does not depend on individual income, nor is it counted as income affecting other benefits or benefit caps. PIP can be received even while employed. Payments are fixed for a period of 1 to 10 years, after which they are reviewed. Reassessments may be conducted earlier if an individual's circumstances change. Currently, over 3.6 million people claim PIP.

PIP payments cover England, Wales, and Northern Ireland. In Scotland, a similar but separate benefit exists, called Adult Disability Payment. Claimants are assessed and scored based on the level of assistance they require in completing a range of daily living and mobility tasks, a process that has sparked considerable controversy. People scoring between 8 and 11 points receive the standard rate of payment, while those scoring 12 points or more receive the enhanced rate.

Data from the independent economic think tank, the Institute for Fiscal Studies (IFS), shows that approximately 1.3 million people currently claim disability benefits primarily due to mental health or behavioral issues (such as ADHD), accounting for 44% of all working-age claimants. PIP was introduced in 2013 with the aim of saving £1.4 billion per year by reducing the number of people eligible for payments. However, initial savings were small, and the number of claimants has increased.

PIP is now the second-largest component of the working-age benefits bill, with spending projected to almost double to £34 billion by 2029-30. Overall, the UK government currently spends £65 billion annually on health and disability-related benefits, a figure projected to rise to £100 billion by 2029. As a result, the government is strongly pushing for reforms to encourage people into employment.

Initially, the government considered not increasing PIP payments in line with inflation for one year, but this idea was reportedly withdrawn after Labour MPs voiced opposition. Another option is to tighten the criteria, changing the scoring system for eligibility. While most of the focus is on PIP, the government may also decide to amend other benefits.

Universal Credit is the largest working-age benefit, paid to 7.5 million people, who may or may not be in employment. Over 3 million Universal Credit recipients have no requirement to look for work, a number that has risen sharply. The government says this situation is unsustainable and wants to help more people into employment.