DWP told to rethink PIP changes in new warning over 'risky' benefit cuts

The Department for Work and Pensions has been told to rethink its plans for huge cuts to Personal Independence Payment. Welfare reforms could see "more tailored support" with cash payments axed and replaced with vouchers and grants for proven disability costs such as treatment and equipment.

In addition, the DWP is considering changes to the eligibility criteria and qualifying period. The current PIP assessments could also be revamped after criticism they are difficult and subjective - instead, officials could base their decisions on specific health conditions or disabilities supported by medical evidence including a formal diagnosis. This would make it easier and quicker for people with people with severe or terminal conditions to receive support, it said.

A Modernising Support Green Paper has been set out, with feedback invited from claimants, campaigners and other interested parties before the end of July 22. But the Resolution Foundation says the measures are "risky in the extreme."

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In its new report Under Strain, the think tank acknowledges the need to rein in spending on disability benefits but asks for a "serious strategy" to be devised that does not threaten people's household budgets. It said: "Restricting eligibility for such benefits, without fully understanding the complex set of underlying drivers, is risky in the extreme, not least because those in receipt of such benefits are financially insecure. Instead, a serious strategy to control expenditure on working-age incapacity and disability benefits requires government to understand the complex range of drivers that determine this spend."

The report adds that claims for PIP have risen by almost 90 per cent over a decade and blames the cost of living crisis and the increase in State Pension age for the spike. The DWP is receiving around 70,000 new applications for PIP every month and there are now 3.5 million PIP claimants according to the latest figures, including 80,000 in Birmingham - the highest number of any local authority area in the UK.

The foundation added: "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."

The DWP said when publishing its Green Paper: "The UK's health landscape has changed since Personal Independence Payment (PIP) was introduced in 2013 with the intention that it would be a more sustainable benefit that would support disabled people to live independently by helping with the extra costs they face.

"However, the caseload and costs are now spiralling. There are now 2.6 million people of working age claiming PIP and DLA – with 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.

"This is in part fuelled by the rise in people receiving PIP for mental health conditions such as mixed anxiety and depressive disorders, with monthly awards doubling from 2,200 to 5,300 a month since 2019. Since 2015, the proportion of the caseload receiving the highest rate of PIP has increased from 25 per cent to 36 per cent. And many more people being awarded PIP now have mental health conditions than when it was first introduced.

"In line with the wider reforms to ensure the welfare system is fair and compassionate, the Modernising Support Green Paper proposals centre on targeting and improving the support for those who need it most."

Andy Cook, Chief Executive of the Centre for Social Justice, said: "With the welfare system now grappling with the combined challenges of economic inactivity, school absence and mental health, this consultation provides a meaningful opportunity to shape the future of Britain's welfare state.

"We owe it to those most struggling to make sure the benefit system provides the best support to those who need it. And with costs skyrocketing, it is time to bring the welfare system into the post-lockdown age."

The Green Paper - which can be found here - is the latest welfare reform "to ensure disabled people and people with long-term health conditions can live full and independent lives." It was designed to build on last year's Health and Disability White Paper and the £2.5 billion Back to Work Plan. Labour has reportedly said it will study the results of the consultation if it gets into power in the July 4 General Election, suggesting the measures may still come in under a new government.

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