Reforms announced yesterday by the Work and Pensions Secretary 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 according to the leading Think Tank the Resolution Foundation
It found that if 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.
Louise Murphy, Senior Economist at the Resolution Foundation, said:
“The package of measures announced in the 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.”
Oldham MP and Chair of the Work and Pensions Committee Debbie Abrahams warned against the cuts in the Commons saying
‘There are alternative, more compassionate ways to balance the books, rather than on the back of disabled people’ adding
“There’s so much evidence of, including, the deaths of vulnerable people based on the Conservative party’s policies, and we can’t have a repeat of that”
