The new financial year is seeing changes
Welfare reforms introduced this week aim to overhaul a system that has “for too long locked disabled people and people with long-term conditions out of work”, according to the Government. The changes target what ministers have labelled “perverse incentives”, which they claim encouraged individuals to remain on benefits without adequate support to transition into employment.
From Monday, new claimants for the health element of Universal Credit (UC) will receive a reduced rate of £217.26 per month. Universal Credit is a payment designed to assist with living costs, available to those in work on low incomes, as well as those who are out of work or unable to work.
Those with the most severe, lifelong conditions, individuals nearing the end of life, and all existing UC health claimants will continue to receive the higher monthly rate of £429.80. The Government has stated the change will save taxpayers approximately £1 billion.
Figures released last month revealed that 2.7 million people on UC had been assessed as having limited capability for work and work-related activity (LCWRA) across England, Scotland and Wales. Those falling into this category are not obliged to attend any interviews or undertake work-related activity.
The Government has vowed that its investment in tailored employment support can provide people with opportunities, helping them move into and remain in work “rather than leave people stuck on benefits”.
Also this week, the standard rate of UC will be increased, in what ministers have described as an effort to “bear down on the cost of living”.
This is set to result in nearly four million households on the standard rate of UC receiving around £295 extra this year in cash terms.
Social security and disability minister Sir Stephen Timms said: “The welfare system we inherited has for too long locked disabled people and people with long-term conditions out of work.
“Laws coming into force today will change that, reducing projected expenditure on universal credit by almost £1 billion.
“Simultaneously boosting the standard allowance and investing £3.5 billion in employment support means we’re creating a welfare system that backs people to work and helps them build a better future.”
Last year, ministers were forced to U-turn on proposals to also reform disability benefits, including for those with mental health conditions, following backbench Labour opposition.
Rather than pursuing immediate reform, the Timms review is currently seeking views on Personal Independence Payment (PIP) and how it operates. Ministers have pledged that any alterations to the benefit – which assists with additional living costs for those with a long-term physical or mental health condition or disability, who struggle with certain daily tasks or mobility due to their condition – will be delayed until after the review concludes.
The review is anticipated to report to Work and Pensions Secretary Pat McFadden by autumn, with the Government confirming that an interim update will be released ahead of that deadline.
