DWP PIP claims hit by massive rise as reforms set to scrap cash payments

A worried young man sat at a kitchen table holding his head while looking at receipts
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Claims made to the Department for Work and Pensions for Personal Independence Payment (PIP) have seen an astonishing rise, new figures reveal. The massive demand for the disability benefit comes as new reforms could scrap the cash payments and replace them with vouchers for treatment and appliances.

Britain's ongoing cost of living crisis and the rise in the State Pension age are to blame for the surge in claims for Personal Independence Payment (PIP), the research suggests. The Resolution Foundation says that between 2013/2014 and 2022/2023 (the latest year for which full spending results are available), the amount paid out on disability benefits to people of working age soared by 89 per cent.

PIP is the main disability benefit for people of working age, replacing Disability Living Allowance which is now only available to children under 16. In addition, expenditure on incapacity payments offered through other benefits such as Universal Credit and ESA (Employment and Support Allowance) has risen by 39 per cent, the think tank said.

The foundation says that the increase in State Pension age - now at 66 and set to rise again to 67 between 2026 and 2028 and then 68 between 2044 and 2046 - means more people are still having to work when they are older. This has led to greater numbers suffering health issues that prompt them to claim disability benefits on top of their wages.

In addition, the cost of living crisis is driving people to claim PIP as an income boost because other state support they can get isn't enough to live on.

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The Resolution Foundation said in its Under Strain report: "A growing, ageing population and a rising State Pension Age have by themselves boosted the working-age disability benefits caseload by 272,000 between 2013 and 2023, one-quarter (25 per cent) of the increase over that time. In 2012-13, 5.9 million (16 per cent) working-age adults in Great Britain reported that they had a disability (defined as having a long-standing illness, disability or impairment which causes substantial difficulty with day-to-day activities); by 2022-23, that figure had risen to 8.9 million (23 per cent).

"Although awareness of health-related benefits has increased, and the stigma attached to claiming declined, there is scant evidence to suggest it is 'easier' to be awarded disability benefits today, with award rates for new PIP claims broadly steady at around 45 per cent since 2015-16.

"Changes to the benefits system over the last decade have strengthened the incentive to claim incapacity and disability benefits. In April 2010, a single person claiming unemployment benefit received £98 a week (in 2024-25 prices); by April 2024, that figure has fallen 7.6 per cent to £91, a loss especially hard-felt in the cost of living crisis."

Here, the foundation appears to be referring to Jobseeker's Allowance (JSA) which is currently paid out at £90.50 a week. It's only available in the form of New Style JSA and only payable for 182 days (about six months). Income-related ESA is closed to new claims as everyone is being moved over to Universal Credit.

Meanwhile, those claiming Universal Credit receive £311.68 a month if single and under 25 and £393.45 if single and over 25. For couples the standard amount is £489.23 if both are under 25 and £617.60 if one or both are 25 or over.

The foundation goes on to conclude: "It is critical to view incapacity and disability benefit trends in the round. Over the last 15 years, the share of GDP spent on all working-age benefits has barely changed, standing at 3.9 per cent in both the pre-recession year of 2007-08 and in 2022-23, although it is forecast to reach 4.6 per cent in 2028-29."

The new analysis comes as proposed reforms to PIP loom on the horizon that could see cash payments replaced with vouchers and grants to pay for targeted extra costs such as medical treatment and disability equipment, with consultation on a new green paper set to end on July 22, three weeks after the General Election. Labour has said it will study the feedback to the DWP plans but has made no mention of PIP in its manifesto, leading some to suspect that the changes may still happen under a new Government.

The DWP has for some time acknowledged an "unprecedented" demand for PIP, with around 70,000 new applications made every month. As it launched the reforms, the Department says it is approving 33,000 new awards for PIP each month, which is more than double the rate before the pandemic. This is expected to cost the taxpayer £28 billion a year by 2028/29 – a 110 per cent increase in spending since 2019.

One factor the research does not address is the proposed changes to Universal Credit. In the near future, PIP will be the key to accessing a new Universal Credit health element that will replace the current £416 benefit top-up for having 'limited capability for work and work-related activity' (LCWRA).

Instead of a work capability assessment establishing eligibility for the additional sum, an active claim for PIP will be the gateway to extra Universal Credit. Many benefits advisors believe this is also a key reason for the jump in PIP claims as people do not want to lose their Universal Credit top-ups.

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