DWP PIP shake-up could see four new schemes replace cash payments

Proposals for a major benefits shake-up could see four different schemes replacing PIP payments given to those with long-term health conditions and disabilities. The Department for Work and Pensions is exploring potential changes to Personal Independence Payment (PIP), the main disability benefit for people of working age.

Work and Pensions Secretary Mel Stride says there are now 2.6 million working-age individuals receiving PIP or its predecessor Disability Living Allowance. The DWP is concerned over whether the "very large scale of Government expenditure" on PIP is offering the right kind of support and providing good value to the taxpayer.

Among the options put forward for revamping PIP are alternatives to the current model of paying up to £737 directly into accounts every four weeks. These include vouchers and grants as well as buying people the appliances and equipment they need.

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Mr Stride pointed out that disability and ill-health in Britain have changed dramatically since PIP was introduced in 2013 and there are now many more people with mental health and neurodivergent conditions who are applying for disability benefits. With almost a quarter of the adult population (23 per cent) reporting a disability in 2024, up from 16 per cent in 2013, he believes it's time to look at how the benefit system can "best support people to live full and independent lives."

"I am concerned about the sustainability of the current model," Mr Stride said. "Over the coming five years, PIP spending is expected to grow by 63 per cent (from £21.6 billion to £35.3 billion, between 2023/24 and 2028/29). There are now over 33,000 new awards for PIP per month compared with 17,000 before the pandemic."

What are the alternatives proposed to cash payments?

Four main ideas have been suggested as alternatives to PIP cash payments.

1. Catalogue/shop scheme: There would be an approved list from which disabled people could choose items such as equipment or aids at reduced or no cost.

2. Voucher scheme: Disabled people could receive vouchers to contribute towards specific costs. It could work for both equipment/aids and for services.

3. Receipt-based system: This would involve claimants buying aids, appliances or services themselves, and then providing proof of their purchase to claim back a contribution towards the cost. This could work in a similar way to Access to Work, which provides grants for equipment, adaptations, and other costs to help disabled people to start and stay in work.

4. One-off grants: These could contribute towards specific, significant costs such as for home adaptations or expensive equipment. It could involve a person supplying medical evidence of their condition to demonstrate the need for equipment or adaptations.

The DWP's new Modernising Support for Independent Living Green Paper adds that while these alternative models could cover the extra costs of a disability or health condition, other forms of support - including health care, social services care provision, and respite - are also crucial in helping people to realise their full potential and live independently.

It adds: "We would like to understand 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.

"We would also like to know whether there are specific groups of people who need a greater level of support than they currently receive and whether this support should be financial or take a different form, such as improved access to healthcare (such as mental health provision or physiotherapy) or enhanced local authority support (such as care packages, respite or home adaptations)."

Mr Stride said: "With this Green Paper, we are inviting views from across society, including disabled people and representative organisations, to ensure everyone has a chance to shape welfare reforms that will modernise the support provided through the benefit system. We will study the findings of this consultation carefully, which will support my mission to build a welfare system with fairness and compassion at its heart."

What are the current PIP payment rates for 2024/2025?

There are two parts to PIP. The daily living element is for those who need help with everyday tasks and the mobility element is for people who need help getting around. Each has two different rates of payment. People can get either or both, depending on the outcome of an assessment of their disability needs.

These are the new rates for 2024/2025, which came into effect from April 8:

Daily Living Component

• Standard: £72.65 a week (up from £68.10)

• Enhanced: £108.55 a week (up from £101.75)
  

Mobility Component

• Standard: £28.70 a week (up from £26.90)
  

• Enhanced: £75.75 a week (up from £71)

PIP is paid into accounts every four weeks. The minimum payment a person can receive is £290.60 every four weeks for the standard daily living component. The maximum is £737.20 every four weeks if someone is awarded the enhanced rates of both components.

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