Disability benefits Bill changes

This briefing outlines our analysis of proposed changes to the Universal Credit and Personal Independence Payment Bill. For further analysis on the Bill please see our initial briefing.

Proposed changes

  1. Current PIP claimants (pre-November 2026) will be exempt from the ‘4 points rule’. This means that 370,000 of the previously estimated 800,000 claimants who would have lost out by 2029/30 are exempt from the cut. However, the long-run impact of the cut is still the same as new claimants replace existing claimants over time.
  2. Unfreeze UC health element for current claimants (pre-November 2026). This means that over 2 million claimants will no longer lose out by £500 a year in 2029/30.
  3. Front-load additional employment support. Previously, the announced £1 billion a year in additional employment support was only promised by 2029/30, with lower employment support expenditure in preceding years. Bringing forward support, an additional £300 million on employment support over the cycle, is welcome but will make a very small impact. Spending an additional £1 billion a year on employment support will likely only get tens of thousands of people into work, a fraction of the millions of households who will lose out in the long run.
  4. PIP assessment review. This was previously announced and is therefore not a new mitigation. However we await details of the scope of the review, which are due to be published today. 

Long-term impact

  • These proposed changes to the Bill will limit the short-term damage. However, there is still a sizable impact for many families. The government’s new poverty assessment finds that child poverty increases by 0.1 percentage points by 2029/30 (15,000 children), and many more will be pushed deeper into poverty. Moreover, CPAG estimates indicate that 90 per cent of the long-term cuts and their devastating impact remain.
  • Prior to these mitigations, the Bill was forecast to cut social security spending by £5 billion in 2029/30, pushing 50,000 children into poverty. However, CPAG estimated that post 2029/30 the changes amounted to an additional £5 billion cut, as they continued to be rolled out, pushing a further 100,000 children into poverty in the long term. This means the Bill as it stood represented a £10 billion cut, increasing child poverty by 150,000.
  • Following these proposed changes, the Bill represents a £2 billion cut by 2029/30, with an additional £7 billion cut post 2029/30. This means post-mitigations the Bill still represents a £9 billion cut (compared to £10 billion) and will still have 90 per cent of the impact on poverty and wider living standards.
  • The changes will also result in a two-tier benefit system, where differences in support between new and existing claimants are substantial. This signifies another departure from the important principle that social security entitlement should be linked to need (first started with the introduction of the two-child limit and the benefit cap, which also break the link between need and entitlement). 

Conclusion 

  • This Bill is still the biggest cut to sickness and disability benefits in a generation.
  • Creating a two-tier system is highly problematic for the reasons outlined above, and illustrates that these changes are not the result of a serious review of how best to support sick and disabled people in their lives and at work.
  • The government has said that spending on the social security system must be reduced to make it sustainable. But in the absence of these cuts, social security spending is forecast to remain flat as a share of GDP. In fact, there is scope to increase social security spending further; many countries spend far more on social security than we do.
  • Unless the government scraps the two-child limit and benefit cap, child poverty will be higher at the end of this parliament than at the start. These policies must be scrapped in the government’s forthcoming child poverty strategy. But the provisions in this Bill will also make it harder for government to achieve its ambition to reduce child poverty, as well as making life harder for disabled people and their families.
  • For these reasons, we are urging MPs to vote against the Universal Credit and Personal Independence Bill at its Second Reading.