A SWEEPING package of benefit cuts is set to be unveiled later today in a bid to curb the soaring costs of the country’s welfare system.
The cuts come ahead of the Spring Statement which is set to see pre-election promises to limit tax rises and tightly control borrowing meet the reality of lower-than-expected growth and tax revenues.
Details of the proposed reforms will be outlined in Parliament later today[/caption]
The welfare budget, already larger than the nation’s defence budget and projected to surpass £100billion by 2030, is set to face substantial cuts.
Key measures are expected to include a major overhaul of personal independence payments (PIP) and changes to the way Universal Credit is distributed to unemployed claimants.
The Government aims to achieve savings of up to £6billion through these measures.
Details of the proposed reforms will be outlined in Parliament later today.
Here we explain exactly what the changes could mean for you.
How could PIP change?
The government is set to introduce changes to the benefits system, which could impact various groups differently.
For PIP claimants, those with severe, long-term conditions may no longer need to undergo reassessments, offering more stability.
Under the current system, many PIP claimants, including those with permanent or degenerative conditions, are subject to periodic reassessments.
The proposed reforms would exempt those with the most serious conditions from further reassessments, ensuring continued support without additional stress.
However, individuals with less severe conditions might face stricter eligibility criteria, potentially resulting in reduced or lost benefits.
PIP is not means-tested and is available to people even if they are working.
What is PIP and who is eligible?
HOUSEHOLDS suffering from a long-term illness, disability or mental health condition can get extra help through personal independence payments (PIP).
The maximum you can receive from the Government benefit is £184.30 a week.
PIP is for those over 16 and under the state pension age, currently 66.
Crucially, you must also have a health condition or disability where you either have had difficulties with daily living or getting around – or both – for three months, and you expect these difficulties to continue for at least nine months (unless you’re terminally ill with less than 12 months to live).
You can also claim PIP if you’re in or out of work and if you’re already getting limited capability for work and work-related activity (LCWRA) payments if you claim Universal Credit.
PIP is made up of two parts and whether you get one or both of these depends on how severely your condition affects you.
You may get the mobility part of PIP if you need help going out or moving around. The weekly rate for this is either £28.70 or £75.75.
On the daily living part of PIP, the weekly rate is either £72.65 or £105.55 – and you could get both elements, so up to £184.30 in total.
You can claim PIP at the same time as other benefits, except the armed forces independence payment.
How could Universal Credit change?
Proposed changes to Universal Credit aim to provide more support for unemployed recipients actively looking for work and those with disabilities.
A modest increase to the basic rate of Universal Credit is anticipated for those actively seeking employment or already in work.
However, it’s important to note that the exact amount of this increase has not been specified publicly.
Currently, Universal Credit payments gradually decrease as earnings increase, with a 55p reduction for every £1 earned (the taper rate).
Those responsible for a child or with limited capability for work (LCW) receive a work allowance, allowing them to earn a certain amount before deductions begin.
The current monthly work allowance is £379 for those receiving housing support and £631 for those who are not.
A significant policy shift is the proposed “right to try” scheme, enabling disabled claimants to try out employment without the risk of losing their benefits if the job doesn’t work out long-term.
This marks a shift from the existing system, which frequently penalises claimants for failing to meet work commitments.
The new approach is intended to promote workforce participation among disabled individuals in a more supportive and constructive manner.
Building on this, the Government plans to abolish Work Capability Assessments (WCA), the current method used to assess a claimant’s capacity to work when applying for Universal Credit.
What is Universal Credit?
The old legacy benefits it is replacing are:
- Housing benefit
- Income support
- Income-based jobseeker’s allowance (JSA)
- Income-related employment and support allowance (ESA)
- Tax credits
The amount you receive depends on your age and whether you’re single or in a couple. The standard monthly allowances are:
- Single, under 25: £311.68
- Single, 25 or over: £393.45
- Couple, both under 25: £489.23
- Couple, one or both 25 or over: £617.60
You may also be eligible for additional amounts if you have children, have a disability or health condition, or need help with housing costs.
What are Work Capability Assessments?
The DWP uses the Work Capability Assessment (WCA) to evaluate a claimant’s ability to work when applying for Universal Credit due to a health condition or disability.
The WCA focuses on assessing functional limitations rather than specific medical diagnoses.
It considers both physical and mental health, awarding points based on how an individual’s condition impacts their ability to carry out daily activities.
After the assessment, claimants may be placed into one of two groups – Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
Claimants assigned to the LCW group are recognised as currently unfit for work but may be capable of returning to employment in the future with the right support and assistance.
Those in this group are required to engage in work-related activities, such as attending Jobcentre appointments or training courses.
Failure to comply with these requirements may result in sanctions, including a reduction or suspension of benefits.
Claimants are placed in the LCWRA group if their health condition or disability is considered so severe that they are not expected to be able to work or participate in any work-related activities in the foreseeable future.
Those in the LCWRA group receive an additional amount on top of their standard Universal Credit allowance currently worth £390.06 a month.
While claimants in the LCWRA group are not required to look for work, they can volunteer to do so without affecting their benefit entitlement.
