Government Announces Overhaul of Benefits System, Promising Major Reforms
The UK government has unveiled a series of changes to benefits, including Universal Credit, as part of a reform plan aimed at saving £5 billion by the end of the decade. Work and Pensions Secretary Liz Kendall announced the changes in Parliament, criticizing the current welfare system for “failing the very people it’s supposed to help.”
Key Changes to Benefits
The reforms come amid concerns over potential cuts to disability benefits, which have caused unease among some Labour MPs. However, Kendall confirmed that Personal Independence Payments (PIP) will not be frozen or means-tested, as previously speculated. Instead, the government plans to change how people are assessed for disability benefits while merging certain other welfare payments.
Universal Credit Adjustments
One of the most significant updates is a “permanent above-inflation” increase to Universal Credit. According to Kendall, this will be worth an extra £775 per year by 2029/30. The government also intends to “rebalance payments” within Universal Credit, maintaining the value of the health top-up for existing claimants while reducing it for new ones. Additionally, an extra premium will be introduced for individuals with severe lifelong conditions that prevent them from working.
Another major shift is delaying access to the health top-up in Universal Credit until the age of 22. Savings from this change will be reinvested in work support and training programs, ensuring that young people are “either earning or learning.”
Merging Benefits
Kendall announced that contributions-based Jobseeker’s Allowance and Employment Support Allowance will be merged into a new “time-limited unemployment insurance” scheme. This will be paid at a higher rate and will not require claimants to prove they cannot work to receive it.
Scrapping Work Capability Assessments
By 2028, the controversial Work Capability Assessment (WCA) will be scrapped, with Kendall labeling it “not fit for purpose.” She argued that the current process is overly complex, time-consuming, and stressful, particularly for individuals also undergoing PIP assessments.
Under the new system, extra financial support for health conditions in Universal Credit will be determined solely through PIP assessments, meaning that financial assistance will be based on how a person’s health impacts their daily life rather than their ability to work.
More Face-to-Face Assessments
To ensure better support for those with disabilities, Kendall pledged that individuals with the most severe conditions would never be reassessed. Additionally, face-to-face assessments will be expanded for those who need them.
‘Right to Try’ and Employment Support
A new “right to try” policy will be introduced, ensuring that attempting to work will never trigger a reassessment of benefits. “This will give people the confidence to take the plunge and try work without fear of losing their financial support,” Kendall explained.
The government is also set to invest an additional £1 billion per year into employment support. Kendall emphasized that individuals would receive “high-quality, tailored, and personalized” assistance to help them find and stay in work.
Furthermore, in a move to protect workers’ rights, the government will introduce statutory sick pay for one million of the lowest-paid workers, strengthening workplace protections.
These sweeping changes mark a significant shift in the UK’s welfare system, aiming to simplify benefits while encouraging employment and ensuring support reaches those who need it most.
