DWP announces three key changes to PIP disability benefits in huge overhaul

The Department for Work and Pensions has announced huge changes to the disability benefits system to make it "fit for the future." The massive revamp is aimed at Personal Independence Payment (PIP) which is now claimed by almost 3.5 million people, including 78,000 in Birmingham - the highest number of any local authority in Britain.

The benefit is intended to help with the extra costs of chronic health conditions and disabilities. But demand has soared to unprecedented levels and the Government is becoming increasingly concerned that PIP is being "misused."

Around 33,000 new PIP applications are approved every month, double the rate before the pandemic. Just over a third (36 per cent) who are awarded the benefit receive the highest level of payment, currently £737 every four weeks, equivalent to £9,500 a year.

Following Rishi Sunak's recent speech on welfare reforms, the Government will today publish its plans to overhaul the current approach to dishing out disability payments. The Modernising Support Green Paper will explore how the welfare system could be redesigned to focus on those with the greatest needs and extra costs. Three key changes are planned and we have detailed these below.

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What will the PIP overhaul mean? Three key changes proposed

The new Green Paper sets out proposals across three key priorities to fundamentally reform the system:

1. Changes to PIP eligibility criteria 'so it is fairer and better targeted'

The DWP says the criteria currently used in assessments no longer reflect how a disability or health condition impacts a person's daily life. It said: "We will consider whether the current thresholds for entitlement correctly reflect the need for ongoing financial support. This includes considering if current descriptors - such as the need for aids and appliances - are good indicators of extra costs.

"We will also look at changing the qualifying period for PIP in order to ensure the impact that people's conditions will have on them over time is fully understood and consider whether we should change the test used to determine if a condition is likely to continue long-term."

2. Reforms of PIP assessment so it is linked to condition

PIP is over a decade old and a lot has changed since the assessment was developed, the DWP says. It explained: "We know some people continue to find PIP assessments difficult and repetitive, and view the assessment as too subjective. We will consider whether some people could receive PIP without needing an assessment by basing entitlement on specific health conditions or disabilities supported by medical evidence.

"This includes looking at whether evidence of a formal diagnosis by a medical expert should be a requirement to be assessed as eligible for PIP. This will make it easier and quicker for people with severe or terminal conditions to get the vital support they need."

The DWP says this could mean those with specific long-term conditions or disabilities such as terminal illnesses wouldn't need an assessment at all.

3. Moving away from a fixed cash benefit system

The DWP wants to explore alternative forms of support to ensure people are given the right help to fulfil their potential and live independently. It says the UK has used a fixed cash transfer for disability benefits since the 1970s but a number of international systems look at the specific extra costs people have and provide more tailored support instead.

In New Zealand, the amount of Disability Allowance is based on a person's extra costs as verified by a health practitioner. Norway's Basic Benefit requires people to provide a letter from a GP outlining the nature of their condition and the associated extra costs.

The DWP said: "We are considering options including one-off grants to better help people with significant costs such as home adaptations or expensive equipment, as well as giving vouchers to contribute towards specific costs, or reimbursing claimants who provide receipts for purchases of aids, appliances or services.

"This reflects the fact that some claimants will have significant extra costs related to their disability, and others will have minimal or specific costs. While these alternative models help people with the extra costs of their disability or health condition, we know other forms of support including health care, social services care provision and respite are also important to help people to realise their full potential and live independently.

"We are also considering whether some people receiving PIP who have lower or no extra costs may have better outcomes from improved access to treatment and support than from a cash payment."

Statistics show the bill for paying out disability benefits is spiralling. This is expected to cost the taxpayer £28 billion a year by 2028/29 – a 110 per cent increase in spending since 2019.

This is partly fuelled by the rise in people receiving PIP for mental health conditions such as anxiety and depressive disorders, with awards for these ailments doubling from 2,200 to 5,300 a month since 2019. Since 2015, the number of claimants receiving the highest rate of PIP has increased from 25 per cent to 36 per cent, the Government said.

Prime Minister Rishi Sunak said: "It's clear that our disability benefits system isn't working in the way it was intended, and we're determined to reform it to ensure it’s sustainable for the future, so we can continue delivering support to those who genuinely need it most.

"Today's Green Paper marks the next chapter of our welfare reforms and is part of our plan to make the benefits system fairer to the taxpayer, better targeted to individual needs and harder to exploit by those who are trying to game the system. We're inviting views from across society to ensure everyone has a chance to make their voices heard and shape our welfare reforms."

Work and Pensions Secretary Mel Stride said: "We're making the biggest welfare reforms in a generation – protecting those most in need while supporting thousands into work as we modernise our benefit system to reflect the changing health landscape.

"A decade on from the introduction of PIP, this Green Paper opens the next chapter of reform, enhancing the support for people with health conditions and disabilities while ensuring the system is fair to the taxpayer."

In Scotland, Adult Disability Payment (ADP) has replaced PIP and is the responsibility of the Scottish Government. The transfer of 220,000 Scottish PIP claimants from DWP to Social Security Scotland started in summer 2022 and will continue until 2025.

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