Dwp pip and universal credit cuts to be confirmed in weeks as exact date set

THE WORK AND PENSIONS SECRETARY HAS BEEN TOLD TO RESPOND TO KEY RECOMMENDATIONS AND TAKE URGENT ACTION ON SOARING NUMBERS OF CLAIMS 17:33, 20 Jan 2025Updated 18:03, 20 Jan 2025 New spending

cuts to disability and incapacity payments look set to be confirmed within weeks. The Department for Work and Pensions is to announce reforms to health-related benefits this spring and has

been asked to respond to a series of recommendations. The House of Lords Economic Affairs Committee has conducted an inquiry into the soaring numbers of social security claims relating to

ill-health and come up with a series of recommendations to help more people get back into work. These include referring people to occupational health specialists when they first see a doctor

saying they can't work and assigning caseworkers to each sickness claimant in the same way that unemployed people must have regular meetings with a work coach. It published its

findings in a letter published today (January 20) and sent to Work and Pensions Secretary Liz Kendall, Chancellor Rachel Reeves and Health Secretary Wes Streeting. The committee concluded by

telling Ms Kendall: "We look forward to your response to the recommendations set out in this letter by March 20." It gives the Government exactly two months to detail what it will

be doing to curb expenditure on disability claims. READ MORE: This will be just days ahead of the Spring Budget, with the burgeoning benefits bill likely to form a key part of that.

Chancellor Rachel Reeves has already confirmed the Budget will be delivered on Wednesday, March 26. A forecast will be issued by the Office for Budget Responsibility on that day and Ms

Reeves will then give a speech in the House of Commons setting out Labour's economic plans. Article continues below The Economic Affairs Committee said: "Overall, we welcome the

Government's intention to 'take a whole new approach with fresh thinking' to welfare: reform is needed both to curb the increasing fiscal burden and to address the

ever-growing social cost of hundreds of thousands of people dependent on benefits. "We see no reason to delay action. A wealth of analysis already exists on the issues we have raised

and which offers credible solutions to the problems we have highlighted. We urge the Government to accelerate its plans to reform health-related benefits. If the Government does not set out

how it intends to address these weaknesses, this growing area of welfare spending will remain a challenge for the forthcoming Spending Review." Spending on incapacity and disability

benefits has risen by more than 40 per cent since 2013 and now stands at £64.7 billion. This is around 20 per cent higher than the UK defence budget and equal to 22 per cent of the total

health budget. This expenditure is forecast to rise to £100.7 billion by 2029–30, pushing the total welfare bill above £370 billion. The latest figures show that around 3.7 million people of

working age receive the health component of Universal Credit or ESA (Employment and Support Allowance), 1.2 million more than in February 2020. Many also claim the separate disability

benefit Personal Independence Payment. For a claimant aged over 25 receiving the Universal Credit standard allowance and incapacity payment plus the maximum PIP award, the annual amount of

benefits received would be around £19,300. On top of that, a housing element covering some or all of a person's rent is also included in a person's Universal Credit. The committee

points out that the nation's health is not getting worse and believes financial incentives may be behind the rise in claims. It said: "There is also a wider question as to whether

the nation has become sicker. Data from the UK's Household Longitudinal Study and the Health Survey for England suggest that the health of the nation has been fairly stable over the

past decade. The sharp rise in the number of incapacity benefit claimants does not, therefore, appear to reflect a deterioration in people's health. "A number of witnesses

highlighted the stark financial disparity between the health-related component of UC and unemployment benefits and the differences in the conditions attached to them. Witnesses said that

together these create an incentive for those who are unemployed to seek this component of UC. "Eduin Latimer, Research Economist at the Institute for Fiscal Studies, told us that

"if you move out of work, getting on to health-related benefits … would almost double your income. You would also have some of your housing costs covered … On top of that, how much you

get in Personal Independence Payment can be quite varied, but it can be up to an additional £9,000 a year." Louise Murphy, Senior Economist at the Resolution Foundation, noted that for

someone in receipt of UC, "their income can double if they are deemed to have limited capability for work-related activity … So there is an incentive to [pursue] that.'" A

Government spokesman said: "We are determined to get Britain working again and have set out our first steps towards delivering an 80 per cent employment rate – by joining up local work,

health and skills plans. We have been clear that the current welfare system needs reform, so it is fairer on the taxpayer and people get the support they need to move into work. Article

continues below "Building on our Get Britain Working White Paper, we will bring forward proposals for reforming the health and disability benefits system in the Spring. This will be

part of a proper plan to help disabled people who can work secure employment while ensuring support is provided for those who need it." Get breaking news on BirminghamLive WhatsApp.

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