More disabled people will be looking for work under the government's plans to transform its welfare budget

The UK government has published the Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper. It says it is making the largest welfare reforms in a generation and will help sick and disabled individuals who can work find employment. It is putting £1 billion aside for this project.

Why is the government changing the benefit system? 

In short, it's about money (or the lack of it). But there are underlying issues it wants to tackle.

• One in eight young people are currently not in work, education, or training, and 2.8 million people are economically inactive due to long-term sickness. This is one of the highest rates in the G7. 
• The number of people receiving Personal Independence Payments (PIP) has more than doubled since the pandemic, with working-age recipients increasing from 15,300 to 35,100 per month. 

The government says that if it doesn't take action the number of working-age people claiming PIP will rise from 2 million in 2021 to 4.3 million by 2030, at a cost of £34.1 billion annually.

The health and disability benefits bill is forecast to reach £70 billion a year by the end of the decade, equivalent to more than a third of the NHS budget.

What is changing? 

1. Work Capability ssessments

The Work Capability Assessment (WCA) will be scrapped (although there's no indication about when this might happen), ending the “dysfunctional process that drives people into dependency”. 

Whilst WCA is still in place reassessments for people on incapacity benefits who are able to work will be reintroduced (having been reduced during the pandemic).  

2. Right to Try

There are already mechanisms in place in both Universal Credit (UC) and Employment and Support Allowance (ESA) which allow people to try work and go back on their these benefits if it doesn't work out. The government believes that these rules aren't well known. it plans to introduce new legislation which will provide a “right to try guarantee” to ensure that those who attempt to work will not face immediate reassessment or lose their benefits. 

3. Personal Independence Payments

There will be significant changes to the PIP system. One of the key changes is the removal of the PIP assessment for individuals with certain long-term health conditions or disabilities, including those with terminal illnesses. 

Proposed reforms include introducing a new eligibility requirement for the daily living component of PIP. To qualify, individuals must score at least four points in one daily living activity. Those scoring three points or less will no longer be eligible. This change, applied through primary legislation, will affect new claims and future reviews for existing claimants, potentially leading to the loss of entitlement for some people. 

There will also be more face-to-face assessments – at the moment that is only 7% of all conducted assessments. 

4. Unemployment insurance

The government is consulting on a new unemployment insurance to replace the existing schemes. This benefit, based on National Insurance contributions, will provide income and employment support without requiring a health assessment.

The government is asking for feedback on the duration and support provided during this period, with self-employed individuals also eligible.

5. Single assessment

There will be a single assessment for financial support related to health and disability, based on the current PIP assessment. People will no longer have to undergo two assessments to get additional financial support for a health condition or disability. Entitlement to the Universal Credit health element will then be dependent on award of PIP daily living in the reformed system.

The government expects these reforms to save over £5 billion by 2029/30.

Consultation

The consultation on the Green Paper is open until 30 June 2025, and the DWP is actively seeking feedback from a wide range of stakeholders.  

Impact on employers

If these changes come into force, you may see an increase in the numbers of disabled people applying for jobs in your organisation. The duty to make reasonable adjustments applies to job applicants (as well as existing employees) and it's a good idea to make sure that your recruitment processes are fit for purpose. 

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