400,000 people to be pushed into poverty by health and disability benefit cuts

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Yesterday (26 March), Chancellor Rachel Reeves, announced major savage cuts to the health and disability benefits.

Cuts reforms announced in the Government’s Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper consultation last week included:

Freezing the universal credit limited capability for work-related activity element for existing claimants from April 2026.
Changing the PIP points system, so that only claimants who score at least four points for one daily living activity, as part of their minimum score of eight points, will qualify for the daily living component.
This will apply to new claimants from November 2026 and to existing claimants whose PIP award is reviewed after that date. The mobility component is not affected.
Scrapping the work capability assessment from 2028. There will be a new, single assessment for both PIP and the UC health element, based on the PIP daily living component assessment.

However, the Chancellor yesterday announced one major policy change from the Green Paper.

This was in which was in reaction to the Office for Budgetary Responsibility (OBR) scoring the savings from the Green Paper policies as lower than the Department of Work and Pensions (DWP had anticipated.

This change was that the halved rate of the Universal Credit (UC) Health Element addition that will be introduced for new applicants from 2026 will now also be frozen until 2030, rather than increasing with the Consumer Price Index.

This will lead to real terms cut for new UC Health recipients, even compared to the reduced rate previously announced.

However, the OBR costings documents also show that from 2026, when the DWP will ‘restart’ WCA reassessments, they will be targeting people who are in the LCWRA group because of the ‘substantial risk to physical or mental health if not found to have a limited capability for work related activity’ criteria (the support group).

The Green Paper just said they would target people whose conditions are short-term and likely to have changed,

While People with short-term conditions are still included in the OBR costings, it also makes it explicit that they will be reassessing people with the ‘substantial risk’ label.

This possibly amounts to an immediate scrapping of the ‘substantial risk’ criteria and is a major issue, as it will expose large numbers of people with significant mental distress to reassessment, where they may not have otherwise been subject to it.

But significant parts of the Green Paper have not been scored by the OBR at all, for two reasons:

because the DWP did not provide enough policy detail or evidence about the anticipated effects; or
because they are subject to consultation.

These include the following:

The £1 billion employment support package. Here, the OBR said they did not receive enough policy detail or enough evidence about impact from the DWP so will score this for the Autumn budget.

Scrapping the work capability assessment (WCA) and replacing it with being ‘passported’ from PIP daily living. The OBR said: “Several key policy details are still outstanding on the proposal. This includes how entitlement will be decided for the stock currently in receipt of the UC health element but not PIP, how UC conditionality will operate, and how entitlement for the UC health element will be decided in Scotland where working-age disability benefits are devolved.”

In its impact assessment of the disability benefit reforms, the DWP gives the figure of 250,000 people pushed into poverty.

However, the Joseph Rowntree Foundation (JRF) analysis says that the figure should actually be 400,000.

The DWP figures are misleading as, it has included cancelling the WCA descriptor changes proposed by the Conservatives in their baseline, so making the poverty impact figures seem much lower than they really are.

150,000 people that would have been affected by the WCA changes will now be affected by the scrapping of the WCA itself.

A detailed analysis of the Spring Statement by Julia Modern of Inclusion London puts these figures on the numbers of people impacted and their financial losses:

PIP criteria change:

Affects 800,000 people, with average loss of £4,500 per year
Total amount cut £3.9 billion
Knock-on effect of 150,000 people losing Carer’s Allowance or UC Carer element.

UC Health Element freezing, plus reduction and freezing for new recipients:

Affects 3 million people, with average loss of £1,100 per year
Total amount cut £3 billion.

Figures on poverty impact:

Overall, the measures will push an additional 400,000 people into poverty, including 50,000 children.

DR UK says: “We are shocked that the Government is planning further cuts to the benefits that Disabled people rely on. Freezing universal credit for new claimants will drive more Disabled people into even deeper poverty – particularly if the government pursues the harsh measures around Personal Independent Payments and the health component unveiled just last week.

"MPs can block these dangerous cuts. We urge them to publicly commit to voting against reducing Disabled people's incomes – both those announced today and those in last week's green paper.

"Labour MPs in particular must ask themselves why their cabinet colleagues are demonising and punishing Disabled people for the economic failures of successive governments rather than looking to the rich to plug the funding gap.

“Our movement is brave and strong. We urge Disabled people to contact their MP to tell them the effects these cuts will have on them and why they need to vote against them.”"

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