Getting Britain Working Again?

While most people are focussing on what Liz Kendall is doing to Personal Independence Payments (PIP), a deeper look into the corners reveals the extent of the damage her reforms could do in the wider context of long-term sickness and inability to work.

What we should be talking about is Universal Credit (UC), the uber-benefit that is gradually replacing all in-work and unemployment benefits. The DWP plans to abandon the Work Capability Assessment (WCA) and the Limited Capability for Work and Work-Related Activity Assessment (LCWRA) which determine UC claims. They’ll be replaced with a measure modelled on a radically revised PIP assessment formula. The effect of this is to assess UC claimants not on the basis of their ability to work but on how restricted they are in carrying out the tasks of daily living.

So what is the new PIP procedure? First, let’s be clear: PIP has never been related to employment status. It’s a benefit to help with the extra living costs of people with long-term health conditions. 3.6 million people of working age are claiming PIP to pay for things like mobility aids and transport, with the number expected to reach 4.3 million in 2029/2030 at a cost of £34.1 billion a year. Combined with other health benefits the total bill for the DWP could be £70 billion.

Kendall’s reforms aim to cut £5 billion of the burden by changing the eligibility criteria for PIP. While people with no prospect of working again won’t ever face reassessments, those with less severe disabilities won’t be so lucky. Currently you can qualify by meeting a combined threshold across various daily activities. The new system requires you to score 4 points in just one area. The rationale is that this will identify those with the greatest need but it risks leaving many others without a safety net because of a statistical readjustment that doesn’t reflect reality.

Applying the PIP test of ‘daily living’ to UC claims of ‘inability to work’ is the first mismatch to raise a red flag.The second problem is that the reforms take very little account of the special circumstances of those with mental health problems or conditions like Chronic Fatigue Syndrome who may be able to carry out most or all of those physical daily living tasks but are still unfit for work.

It’s easy to see how the new assessment model – applied to both PIP and UC - could simply remove people from the system because their right to benefits will be judged by the same criteria.

In an attempt to cut the numbers on long-term sick leave – currently 2.8 million and rising - people will be allowed to try working but keep their right to benefits if they have to withdraw. The standard allowance for UC will now increase in line with inflation, but if claimants fail the PIP-style assessment they won’t receive any extra help for their health needs.

By scrapping decisions based on ability to work in favour of assessments of fitness for activities of daily living, the reforms announced on 18th March 2025 could remove vital financial support for those who are temporarily unable to work, leaving them to face weeks or months of hardship.

For millions of people, income protection insurance has just become more important than ever. If the welfare state tide is going out, leaving millions high and dry, the personal financial security of income protection may be the only practical, substantial alternative.

Taking out an income protection policy while you’re fit and working can give you certainty in the face of a state benefit system apparently opening up cracks that it will be only too easy to fall through. With regular monthly benefits of up to 70% of your gross income, payable for as long as two years, you can remove yourself from the danger zone, knowing you’ll be able to manage if you become too sick to earn.