Government proposes disability benefits overhaul in face of ...

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The government has proposed overhauling a key disability benefit in the face of its “spiralling” caseload and costs, in a move labelled “dangerous” and “reckless” by charities.

Its green paper on reforming personal independence payment (PIP) floats restricting access to the benefit and replacing regular cash payments with other types of provision.

The Department for Work and Pensions (DWP) proposals are premised on the idea that PIP does not account for the significant variations in additional costs that different disabled people face in their lives. They are also designed to contain projected increases in spending on the benefit over the coming years.

Increasing costs and caseloads

According to government data, the real-terms cost of PIP, in 2024-25 prices, rose by 26% from £15bn in 2019-20 to £18.9bn in 2022-23 (in 2024-25 prices), as the number of recipients grew from 2.2m to 2.8m (29%). However, it is projecting that PIP’s cost and caseload will increase more steeply over the subsequent three years, with the budget required rising by 45% to £27.4bn (in 2024-25 prices), and case numbers growing by 35%, to 3.8m, by 2025.26.

The government has particularly highlighted growth in the number of claims for people with mental health conditions, with the numbers being awarded PIP whose main disabling condition was mixed anxiety and depressive disorders rising from 2,200 per month in 2019 to 5,300 in 2023.

Sunak questions additional costs of mental health conditions

In a recent speech that trailed the green paper, prime minister Rishi Sunak questioned whether people with mental health conditions faced the same level of costs from their impairments as those with physical conditions.

“Since 2019, the number of people claiming PIP citing anxiety or depression as their main condition, has doubled, with over 5,000 new awards on average every single month,” he said.

“But for all the challenges they face, it is not clear they have the same degree of increased living costs as those with physical conditions.”

Sunak added that the current PIP assessment approach “undermined” the system by asking people to “make subjective and unverifiable claims about their capability”.

He said the government wanted a “more objective and rigorous approach that focuses support on those with the greatest needs and extra costs”, which he said would involve “being more precise about the type and severity of mental health conditions that should be eligible for PIP”.

Proposed assessment and eligibility overhaul

This is reflected in the green paper’s ideas around overhauling PIP’s assessment and eligibility process.

While the current assessment is functional – based on people’s ability to carry out certain tasks and activities – the DWP is mooting switching to a system based entirely or partly on people’s conditions.

It is suggesting introducing a requirement for people to provide evidence of a formal diagnosis from a medical professional to access PIP, while people with specific conditions would be given access without an assessment.

As an alternative to replacing the assessment system, it is suggesting tightening eligibility under the existing system, in order to “focus support on people with the highest needs and significant ongoing extra costs”.

This could include increasing the qualifying period for which the person needs to have had the relevant impairment from the current three months, to screen out people who have shorter-term conditions.

Replacing cash payments

Another idea put forward to is replace the current system of giving recipients weekly cash payments that they can spend how they wish, in order to “better target” resources.

Options include providing vouchers, requiring people to account for their spending, restricting them to buying from an approved list or offering one-off grants for expenses such as adaptations or equipment.

It also suggested doing away with financially based support altogether for some disabled people “who have lower, or no extra costs” and “may have better outcomes from improved access to treatment and support than from a cash payment”.

In addition, the DWP proposed “aligning” the support delivered through PIP with that delivered by health, social care and other local authority services for disabled people, to provide “better joined up and streamlined support than the current system”.

The department said this could help minimise the number of assessments people underwent and suggested it could also involve devolving resources from PIP to local areas so they could choose how best to support people.

However, it also implied this could also involve cutting back overall provision for disabled people. It said that financial support may currently be “duplicated”, with the extra costs of disability being met by services or equipment, as well as through PIP, for some people.

Implications for social care

As well as the proposed alignment between care and support services and PIP, the proposals would have an impact on adult social care should they succeed in reducing the numbers receiving the benefit.

This could increase levels of unmet need among disabled people, thereby raising demand for adult social care, while it could also reduce the level of resource councils collect from charging people for care and support.

This is because councils include the daily living component of PIP as part of a person’s income when calculating charges, though they must also disregard a sum to cover a person’s “disability-related expenditure”, such as privately arranged care or specialist equipment.

‘Reckless’ proposals to replace cash with vouchers

The proposals have sparked anger among disabled people’s organisations and charities.

In reference to the idea of replacing cash payments with vouchers, Disability Rights UK said: “Being offered vouchers is more than an insult; it is dangerous. We all want the right support when needed, and vouchers will not improve our lives. Instead, they will shut us off from our communities, leaving thousands without access to crucial services and support.”

It said that disabled people were already facing significant, and deepening levels of poverty, adding: “The social security system should be an essential public service that ensures everyone has access to the right support when they need it. But after years of dire cuts and reforms, it has been torn apart.”

Disability charity Scope said it was “deeply concerned” about the proposals, adding: “It’s hard to have any faith that this consultation is about anything other than cutting the benefits bill, no matter the impact on people’s lives.”

‘A reckless assault on disabled people’

It said its research had found that households with at least one disabled member needed an extra £975 a month to have the same standard of living as non-disabled households, after taking account of benefits such as PIP.

The charity said the issues identified by the government in the green paper arose from “crumbling public services, poor quality jobs and increasing rates of poverty”, not benefit rates, and added: “We believe the government should end this reckless assault on disabled people and focus on how to fix the real underlying issues.”

From a mental health perspective, Mind chief executive Sarah Hughes said: “The PIP assessment is already an incredibly difficult process, and we are hearing from people living with mental health conditions that they are deeply concerned about the government’s proposed reforms. Taking away crucial financial support from people with mental health problems is not going fix anything, it will make things worse.”

Implementation dependent on election outcome

However, implementation of the green paper is dependent on the Conservatives winning the next election – due by January 2025 but expected to take place by November 2024 – which they are widely tipped to lose to the Labour Party.

Giving Labour’s response to the green paper in Parliament yesterday, shadow work and pensions minister Alison McGovern did not set out any plans on disability benefits but linked the increase in PIP caseloads to people not being able to get the NHS treatment they need, because of long waiting times. She said Labour would seek to tackle the issue by recruiting 8,500 more mental health staff .