Welfare Overhaul: Key Changes to Benefits and What They Mean for You

The UK government has outlined a comprehensive overhaul of its benefits system, aiming to reduce the financial burden of welfare spending. Key changes involve the Personal Independence Payment (PIP), which assists individuals with long-term health conditions who struggle with daily activities. While PIP payments will increase in line with inflation this year, tighter eligibility criteria will be implemented from November 2026, potentially lowering payments for many. Reassessments for PIP claimants will become more frequent, yet those with the most severe long-term conditions will be exempt from reassessments.

The work capability assessment currently used to determine incapacity benefits eligibility will be eliminated in 2028, consolidating the assessment process into the existing PIP framework. Existing incapacity benefits under universal credit will be frozen at £97 per week for current claimants, with significant reductions for new applicants in subsequent years. However, those with severe, lifelong health conditions will receive an additional income guarantee, protecting them from future reassessments.

Younger claimants under the age of 22 will no longer have access to the incapacity benefit top-up for universal credit, with efforts directed at reinvesting savings into work support for this demographic. The transition age for Disability Living Allowance to PIP for young people may also rise from 16 to 18. Furthermore, the government intends to address concerns about losing benefits when attempting work, aiming to shield individuals from automatic reassessments when they seek employment.

Overall, Work and Pensions Secretary Liz Kendall announced a £1 billion initiative to assist disabled individuals and those with chronic health conditions in securing employment. While most of these changes affect all of Great Britain, PIP specifically applies to England and Wales, and any budget cuts would have implications for Scotland’s allocations. Similar policies are anticipated for Northern Ireland, which often mirrors changes in England and Wales.