Labour’s Proposed Disability Benefit Cuts – Scale and Impact

CutSizeNumbers impactedPublished info
Green paper proposals  At least £9 billion350,000 to 400,000 additional households to be pushed into poverty.   At least 150,000 carers to lose carers’ benefits.Includes proposed PIP cut and changes to UC rate but not several other proposed measures as below. Reported figures include a cut of £4.8 billion by 2029/30 pushing an additional 250,000 (including 50,000 children) into poverty to be pushed into poverty as cited in DWP impact assessment. The £4.8 billion was calculated on the basis of behaviour changes that may never happen (see below under PIP cuts). This is different to the static, on-paper cut that most people assume this represents. The static cut is at least £9 billion. The poverty impacts have been calculated by deducting 150,000 from the total number of additional households that will be pushed into poverty according to the £4.8 billion figure. This is the number of households who would have been pushed into poverty by plans to make interim changes to the Work Capability Assessment (WCA) proposed by the previous government that never happened.  
PIP – daily living component to require 4 scored points in at least one areaBetween £7.9 and £9 billion per year by 2029/301.325 million existing claimant  plus 58% of new applicantsAverage losses of £4500 a year. 1.325 million existing PIP claimants in receipt of the daily living component did not score four points in any area. The publicised figure of 800,000 to lose out is what the OBR are predicting after accounting for behaviour changes such as people trying harder to reach 4 points and more MPs/appeals. But these may not happen especially as there are few areas under daily living where people with certain conditions can score points. Even is not all of the 1.325 million end up with a benefit cut, they will nevertheless be adversely impacted by considerable additional anxiety and distress through being at risk of a loss, having to endure reassessment and any potential need to apply for an MR or both MR and appeal. Existing claimants who did score four points will also be at greater risk of losing their PIP and therefore subject to increase anxiety and stress.  
Changes to Universal Credit rates 2.25 million current UC recipients 730,000 future UC recipients  Current UC recipients will be adversely affected by freezing UC LCWRA/ESA with an average loss of £500, although this will be partially offset by the increase in the standard allowance of UC. Future UC recipients will be adversely impacted by a 50% cut to the LCWRA component with average losses of £3,000 per year.  
Raising the age of eligibility for out of work disability benefits to 22 years old.   ?Campaigners have warned that 3500 Disabled care leavers will be impacted by losses of around £5000.
Abolition of the WCA – new “health” component of UC ?The OBR could not score this due to insufficient information from government. Around 600,000 in receipt of UC LCWRA do not get PIP and will therefore lose eligibility for out of work disability benefits through the plan to abolish the WCA and instead make eligibility dependent upon eligibility for PIP. Another 68% of those in receipt of both LCWRA and PIP daily living did not score four points or more in any area. Existing claimants affected by the PIP cut who will also lose eligibility for out of work disability benefits will be hit by a combined cut of £9600+ per year, 57% of their income, taking them from living just above the poverty line to official destitution with little to no chance of employment.  
Merging of contributions based JSA and ESA and time limiting awards 444,599This was the number of claimants on contributions-based ESA as at Aug 2024. With time limiting of awards, they will need to apply for Universal Credit. Some of them may not be eligible for UC, for example if they have savings above the threshold or their household income is too high. These are people who used to be in employment and paid National Insurance Contributions.

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