At-a-glance: Key changes to benefits in welfare shake-up

The UK government has announced plans for a major overhaul of the welfare system, aimed at reducing Britain's ever-increasing expenditure on welfare. At the heart of the reforms are tightening eligibility criteria for Personal Independence Payment (PIP), adjusting the Work Capability Assessment, and modifying disability benefits under Universal Credit.

Regarding Personal Independence Payment (PIP), the government will tighten eligibility criteria from November 2026, which could result in reduced payments for many. The daily living component will become more difficult to qualify for, but the mobility component will remain unchanged. Furthermore, the government will review the PIP assessment process, but those with the most severe conditions will no longer be subject to reassessment. The government hopes to conduct more frequent reassessments for a larger number of PIP claimants and increase the number of face-to-face assessments.

Under the proposals, the Work Capability Assessment will be abolished in 2028. At that time, individuals applying for health-related financial support and disability benefits will only need to undergo a single assessment based on the current PIP system. For existing claimants, the disability benefit under Universal Credit will be frozen at £97 per week from next April, meaning it will not be adjusted for inflation until 2029/30. For new claimants in 2026/2027, this amount will be reduced to £50 per week. However, for those who, after April 2026, receive the new reduced Universal Credit health top-up and have the most severe, lifelong health conditions with no prospect of improvement and who will never be able to work, their income will be protected through additional subsidies.

The government has stated that it will increase the standard Universal Credit rates for all job seekers, by up to an additional £775 per year by 2029/30. The government says this will help address the "perverse incentives" that exist in the welfare system, which cause people to become dependent on welfare in the long term. Furthermore, under these proposals, individuals under the age of 22 will no longer be able to claim disability benefits to supplement Universal Credit. The government says that any savings resulting from the delay will be reinvested in work support and training opportunities for this age group. Ministers are also consulting on raising the age at which young people transition from the Children's Disability Living Allowance to PIP from 16 to 18. The Department for Work and Pensions says the aim is to get young people into work and training rather than onto a path of "economic inactivity."

The government says it wants to alleviate people's concerns that they will lose their benefits if they take a job but it ultimately doesn't work out. Ministers say they will introduce legislation "as soon as possible" to guarantee that trying work will not lead to an automatic PIP or Work Capability reassessment. It is hoped that the newly designed "support conversations" will help people with health conditions or disabilities find work. Consultations will begin on an "Accessible Work Plan" to seek improvements to help people stay in the workplace, such as providing assistive tools or assistive technology. Overall, Secretary of State for Work and Pensions Liz Kendall announced a £1 billion support package to help disabled people and those with long-term illnesses find employment. Most of these measures apply across the UK. PIP only applies to England and Wales. If the PIP budget is cut, the amount of money the Treasury gives to the Scottish Government will also be cut proportionally. Therefore, Scottish ministers can choose to make similar cuts, or find funding from other spending or taxation to fill the gap. The welfare system is devolved in Northern Ireland, but in practice, the Stormont government mainly replicates what happens in England and Wales. If Northern Ireland ministers choose not to implement cuts, they will have to fund this by cutting other parts of the budget or increasing revenue.