On Tuesday, 18th March, Liz Kendall MP, Secretary of State for Work and Pensions, announced publication of the Government’s Consultative Green Paper, Pathways to Work: Reforming Benefits and Support to Get Britain Working. This is a part consultive document on which comments are invited over the next 12 weeks, however, some changes will be implemented without consultation. The paper outlines dramatic reforms to disability and health benefits. These changes aim to reduce the growing welfare bill by £5 billion, shifting the focus towards “work over welfare.”
It is important to note that some of the matters mentioned in the proposals are functions which are devolved to the Scottish Government and not directly controlled by Westminster. We do not know at this stage what the reaction of the Scottish Government will be to these proposals.
In Scotland, some elements of support for disabled people and people with health conditions remain reserved to the UK Government i.e. they decide what should happen (for example, the health element in UC and some have been devolved to the Scottish Government (for example PIP and DLA) where Scottish Government decide policy. Currently we do not know how the proposed changes will impact the devolved benefits or how they will interact with the changes to the UK wide benefits.
Key Changes to Benefits
These reforms will affect the following benefits:
- Personal Independence Payment (PIP)
- New Style Employment and Support Allowance (ESA)
- Universal Credit (UC) Health Elements (for those who have undergone a Work Capability Assessment (WCA), formerly Income-Related ESA)
- New Style Jobseeker’s Allowance (JSA)
Personal Independence Payment (PIP) Reforms
PIP will now be focussed on those with “higher needs.” To qualify for the daily living component, claimants must now score at least 4 points on a single PIP daily living activity. Currently, points are added across multiple activities, with 8 points qualifying for the standard rate and 12 for the enhanced rate.
In Scotland, PIP has been replaced with Adult Disability Living Allowance (ADP), we do not currently know if these rules will apply to ADP.
Changes to New Style ESA and Universal Credit Health Elements
New Style ESA and UC Health Elements are currently assessed through a Work Capability Assessment (WCA) to determine whether someone’s health condition or disability affects their ability to work. Depending on their health needs, the claimant would either be placed in one of the following two groups; Limited Capability for Work (LCW) where some work activity will be expected of the claimant or Limited Capability for Work and Work-Related Activity (LCWRA) where no or limited work activity would be expected of the claimant.
The paper confirmed that the Work Capability Assessment (WCA) will be scrapped in 2028, this change is not open for consultation.
New applications for additional health-related UC payments will instead be assessed through the PIP assessment. A White Paper will be published later that should provide further details on how this will work.
Currently, working while in one of the above groups (LCW or LCWRA) can trigger a reassessment via the WCA process. Under the new rules, this will no longer be the case.
There will only be a single assessment to determine whether you qualify for extra support due to your health condition. This will be through the PIP assessment, you will need to score at least 4 points in one activity to qualify for the PIP payments, it has not been clarified what the criteria will be to qualify for extra help from the Health Element of Universal Credit.
We are awaiting further guidance from the Scottish Government as to how these changes will impact devolved Social Security.
Universal Credit (UC) Payment Adjustments:
For all of those who claim Universal credit the standard rate will increase from £91 to £98 per week in April 2026. For those in receipt of the LCWRA health element will be frozen at £97 per week until 2029/30. If you are currently in receipt of LCWRA and are reassessed and found to still qualify will see no change in payments.
However, from 2028, if you apply qualify for the health element of UC it will be paid at £50 per week, an almost 50% reduction in payments.
Claimants will be required to engage in “support conversations” to access available assistance.
The Green Paper states: “those with the most severe, life-long health conditions, who have no prospect of improvement and will never be able to work, will see their incomes protected through an additional premium, […] those in this group will not need to be reassessed in future”.
Those who have health conditions who are unlikely to improve will no longer be asked to attend reviews, currently they will still qualify for the extra £97 a week but this will be frozen until 2029/30, However, for those with long term health issues who apply from 2028 the new health element will only be £50 per week.
Reforms to Contributions-Based Benefits (New Style ESA & JSA)
A consultation is underway to reform contributions-based benefits:
- New Style ESA and JSA will be time-limited to one year.
- After one year, continued health-related support will be provided through Universal Credit, subject to eligibility.
- All claimants will be expected to seek work, though those with health conditions will have easements.
- Payments will be at a more generous rate compared to the current NS JSA, which is paid for only six months.
Reassessment and Eligibility Changes
- Claimants will be reassessed before the WCA is scrapped to check ongoing eligibility.
- A review of the PIP assessment process is planned, with a likely increase in face-to-face assessments.
- Existing PIP claimants will be reassessed under the new criteria at their next review.
At this stage, we do not know how this will impact Disability Payments in Scotland, currently there are minimal face to face assessments and light touch reviews for ADP.
Impact on Young People
- The qualifying age for Disability Living Allowance (DLA) may rise from 16 to 18.
- Those qualifying for a UC health element will not receive payments until age 22, aiming to encourage young adults to work rather than claim benefits.
Mitigation Measures & Carer Impact
- Consultations will explore how to support PIP recipients who fail to score 4 points in a single activity.
- The impact on unpaid carers remains uncertain, as their eligibility for Carer’s Allowance or Carer Support Payments is directly tied to the disability benefits of the person they care for. It is unclear whether carers will be included in government mitigation plans.
These changes represent a significant shift in the UK’s approach to disability and health-related benefits, the impact on Scotland’s Social Security benefits is unclear. Further details are expected in upcoming consultations and White Papers.
We hope this information highlights the proposed key changes to benefits and who it will most impact following the announcement. If you have questions on any of the above, please contact our Financial Wellbeing Officer who will be happy to assist