DWP's 'extra boost to PIP payments' in new cost of living plans

The Department for Work and Pensions (DWP) may boost the Personal Independence Payment (PIP), following a fresh recommendation tabled in the Houses of Parliament. It has been suggested that there's a need to enhance the PIP rates as the benefit is "not operating as intended."

Reports reveal that beneficiaries are spending their PIP on general living expenses due to other benefits such as Universal Credit failing to cover the basic necessities. Designed to cater to the additional costs arising from long-term health conditions or disabilities, PIP covers costs of specialist equipment, mobility aids, specific home or car modifications, medical supplies, therapies, and accessible transport provisions.

However, MPs voice concerns over many struggling PIP recipients compelled to funnel it into regular cost-of-living expenses, worsening their health conditions due to increased financial stress. A recent Commons Committee report on UK Benefit Levels urges the DWP to evaluate the support given through the Personal Independence Payment. The call from the Work and Pensions Committee prompts the DWP to analyse the additional costs that PIP intends to cover, subsequently proposing enhancements to the benefit scheme accordingly.

The committee report highlighted significant issues with the Personal Independence Payment (PIP) system, stating: "Support provided through Personal Independence Payment (PIP) is not operating as intended. Evidence suggests that insufficient means-tested benefits frequently necessitate PIP recipients to use their extra costs benefits to cover day-to-day living costs.", reports Birmingham Live.

It went on to detail the lack of clarity from the Department for Work and Pensions (DWP): "DWP has not clearly stated the extent to which PIP should contribute towards the extra costs incurred by claimants with a health condition or disability. We heard that for some claimants, the shortfall in support provided was significant enough to worsen physical and mental health outcomes, as well as to increase their likelihood of experiencing financial hardship."

The report also welcomed government action but stressed the need for further steps: "We welcome the Government's recommitment in its February 2024 Disability Action Plan to take forward plans to set up an Extra Costs Taskforce to understand the extra costs disabled people face in their daily lives. DWP should be part of the Extra Costs Taskforce. Once operationalised, DWP should use findings from the Taskforce to set a benchmark for the health and disability-related costs it intends PIP to cover. It should then set out how it intends to reach this benchmark alongside annual uprating."

"There is a persuasive case that there should be a greater number of levels of support provided through PIP - both higher and lower - to reflect more accurately the experiences of claimants. The Department should introduce further levels of support through PIP and the new Health Element of Universal Credit in time for the start of financial year 2025/2026."

At present, Universal Credit provides two additional amounts for individuals whose health conditions or disabilities prevent them from working. Those in the 'limited capability for work' (LCW) category are entitled to £156 a month (although this payment stopped for claims made post-April 2017), while those categorised under 'limited capability for work and work-related activity' (LCWRA) receive an additional £416 monthly.

These payments kick in after claimants have submitted sick notes for a three-month period and passed a work capability assessment.

However, from the financial year 2026/2027, work capability assessments will be phased out, and these two supplements will be substituted by a new Universal Credit Health Element for recipients who are already on PIP. The committee has called for careful consideration of the levels of this Health Element to ensure that individuals who are unable to work do not find themselves battling with everyday costs.

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