The Department for Work and Pensions (DWP) is reportedly considering a cut to long-term sickness benefits as part of Labour’s strategy to boost the UK’s workforce.
The plan, which is said to be under consideration by Work and Pensions Secretary Liz Kendall, could result in a reduction in benefits for hundreds of thousands of people.
The aim is to “encourage” individuals to return to work, with the focus on long-term sickness benefits such as Employment and Support Allowance. According to the Telegraph, some recipients could lose up to £5,000 annually under this scheme.
While most long-term sickness benefits don’t have criteria that claimants must meet after their application is approved, this could change to mirror Universal Credit’s continuous commitments.
The proposal would require long-term sickness benefit recipients to find employment or fulfil other requirements to continue receiving their benefits.
Under the Universal Credit system, claimants who fail to meet their commitments face sanctions, which can reduce or halt their benefits. Another option being explored by the secretary is the removal of the limited capability for work category from the Universal Credit system.
As reported by the Independent, this reduction could result in claimants losing £5,000 and being pushed back into employment.
Work capability assessments and Personal Independence Payments also appear set for a revamp as part of the most significant wave of changes to the welfare system in ten years.
At present, 2.8 million individuals are unemployed due to long-term illness and are claiming related benefits. This figure has dramatically risen since the pandemic, with mental health issues and back problems being the most common reasons.
This follows reports that the annual cost of support payments for people with disabilities and health conditions is predicted to rise by 60% by 2029, reaching £35 billion. The government is already on track to surpass the £137.4 billion welfare cap set by the previous administration for the 2024/2025 fiscal year.
With just under two months until the end of the financial year, welfare spending is anticipated to exceed this cap by an astonishing £8.6 billion. Earlier this month, a government report also highlighted that over a third of working-age individuals reported having a long-term health condition.
An analysis in December revealed that sickness benefits could be worth £3,000 more per annum than a minimum wage job. As a result, the changes to benefits are expected to be substantial in order to align with Labour’s ambitious 80% employment target.
A representative for the Department of Work and Pensions spoke to the Telegraph, stating: “We’ve inherited a broken welfare system in desperate need of reform. But the proposals we’ll bring forward will ensure the health and disability benefit system is fit for purpose, fair on the taxpayer and delivers the right support to the right people. We will work closely with disabled people and their organisations and ensure their voices shape any proposals.”
