Short briefing on Pathways to Work green paper

The key changes to the adequacy of social security benefits announced in the Pathways to Work green paper are as follows: 

  1. Restricting the eligibility criteria for the daily living award of personal independence payment (PIP) which will result in some people losing PIP entirely – using 2025/26 rates this means some claimants will lose £74-£110 a week.
  2. Restricting eligibility to the universal credit (UC) health element to only those who receive a daily living award in PIP - this means some claimants will lose £97 a week.
  3. Reducing the UC health element from £97 a week to £50 a week in 2026/27 for new claimants - this means some claimants will lose £47 a week.
  4. Freezing the UC health element for existing claimants at £97 a week until 2029/30.
  5. Increasing the standard allowance by £6 a week, above CPI uprating in 2029/30. This would mean a single over 25 claimant would be entitled to £107 a week, instead of £101 a week if uprated by inflation only.

In addition, the Chancellor announced that:

  1. The UC health element for new claimants would be frozen at £50 a week from 2026-27 to 2029-30.
  2. The increase to the standard allowance in 2029/30 would be reduced by £1 a week (from a £6 rise to a £5 rise). 

The government has estimated that the combined impact of the changes announced in the Pathways to Work green paper and the additional cuts in the Spring Statement will push 50,000 more children into poverty by 2029/30. However, CPAG analysis shows that this is only a partial picture, as many of the planned cuts won’t have come into force by 2029/30. 

The planned cuts and freezes to the UC health element will come into force in April 2026. The Office for Budget Responsibility is estimating that 73 per cent of the UC caseload that receive the health element prior to April 2026 will still be claiming in 2029, and will therefore be subject to a freeze on their health element (losing around £10 a week by 2029) but not the much larger cut that new claimants will face (from £97 per week to £50 per week). CPAG is estimating that these changes alone, when fully rolled out, will amount to a £5bn cut to social security, and will push an additional 100,000 children into poverty over the long term. 

There may also be an additional poverty impact of PIP cuts beyond 2029/30. However, it is difficult to estimate the child poverty impact of these changes over time with certainty as:

  1. It is currently unclear what share of the backlog of existing applications, forecast new applications and re-assessment of existing claimants will be completed by 2029/30.
  2. As the OBR highlights, there is a lot of uncertainty over behavioural responses to the PIP reforms.

The true impact of these reforms for children and their families is likely to be far greater than the government presented. 

These reforms risk undermining the government’s broader objectives of tackling child poverty and increasing living standards, and any policy interventions to tackle child poverty planned by this government will have to work much harder to counteract the impact of these cuts to disability benefits.