Physically disabled will be affected by payment reforms, warns think tank

Some people with mental health conditions could see cash payments stopped and replaced with talking therapies, under new welfare reform proposals.

Disability charity Scope described the extent of the proposed changes to the personal independence payment (Pip) as unexpected while the Resolution Foundation warned that any major reform will affect those with physical disabilities too.

The Prime Minister said current spend on benefits for people of working age with a disability or health condition is £69 billion – “more than our entire schools budget; more than our transport budget; more than our policing”.

He added that Pip spending alone is forecast to rise by more than 50% over the next four years if no changes are made.

Pip is aimed at helping with extra living costs if someone has a long-term physical or mental health condition or disability, and has difficulty doing certain everyday tasks or getting around because of that.

But Rishi Sunak said he is worried about this payment in the system “being misused”.

Stating the case for needing to “look again” at the Pip benefit, he said that since 2019, the number of people claiming Pip citing anxiety or depression as their main condition, has doubled, and that it is “not clear they have the same degree of increased living costs as those with physical conditions”.

He described the system as being “undermined” as people are “asked to make subjective and unverifiable claims about their capability”.

Welfare reform
Prime Minister Rishi Sunak said Pip spending is set to increase by more than half over four years without reform (Yui Mok/PA)

A consultation is now set to look at changes to the eligibility criteria, assessment process and types of support that can be offered, suggesting a “more objective and rigorous” approach, requiring “greater medical evidence to substantiate a claim”.

It will also consider whether some people with mental health conditions should get access to talking therapies or respite care rather than cash transfers.

Scope’s director of strategy, James Taylor, accused the Government of proposing to “slash disabled people’s income by hitting Pip” in a cost-of-living crisis, branding the suggestion “horrific”.

The Resolution Foundation think tank said the biggest announcement in Mr Sunak’s speech was the Pip consultation.

But while it accepted reform is inevitable because of the rise in spending over the years, it said Mr Sunak had set out a “problem statement rather than a plan”.

The organisation said: “While the speech set out the problem rising ill-health is creating for the Treasury, it did not offer a plan for addressing it, nor address any of the many difficulties involved in doing so.

“For example, while the Prime Minister made the case for reform on the basis of rising numbers of people with mental ill-health claiming benefits, any major reforms will also impact those with physical disabilities too.

“That’s because those whose primary health condition is physical currently account for the majority – 62% – of Pip claimants in England and Wales.”

The foundation said disability reforms are about family finances as well as public finances, adding that people with disabilities “are among the poorest in society, with one in three adults in the poorest tenth of the population having a disability”.

Louise Murphy, senior economist at the Resolution Foundation, said: “Rising economic inactivity, and especially rising inactivity due to long-term sickness, is one of the biggest economic challenges Britain faces in the 2020s.

“Not only is it reducing employment and growth, and increasing public spending, it is harming the living standards of those who are too ill to work.

“But the Prime Minister today has set out a problem statement rather than a plan, particularly when it comes to proposals to overhaul our main disability benefit.

“This may reflect the very challenging nature of disability benefit reforms. But whoever wins the next election will need to go beyond rhetoric and consultations if they’re to stem the rising benefit bills and help more people into work.”