The government has announced plans to significantly overhaul the way that disability benefits are paid through Personal Independence Payment reform (PIP). As part of the announcement , a consultation has been launched on proposals for moving away from a fixed cash benefit system.
The Prime Minister Rishi Sunak has previously voiced his desire to increase the number of people in work, vowing to tackle what he described as Britain’s “sick note culture”. The UK’s out of work population has increased sizably since Covid, with many citing long Covid as a reason for being out of work. Overall, there are currently over 2.6 million people of working age in the UK who are receiving PIP.
There are currently 33,000 new PIP applications which are approved every month, double the number which were being approved prior to the pandemic. The government have claimed that this is partly due to the rise in people who are receiving PIP for mental health conditions including anxiety and depression, with this rising from 2,200 to 5,300 per month since 2019. The Secretary of State for Work and Pensions, Mel Stride, has suggested that people who have milder mental health conditions would no longer receive financial support.
But what exactly is PIP, and what reforms are the government proposing? Keep reading to find out more.
What is a Personal Independence Payment?
PIP, which stands for personal independence payment, was introduced in 2013. It replaced Disability Living Allowance, and provides regular payments to working age people for help with living costs which are caused by long-term disabilities or ill health, whether physical or mental. The maximum weekly payment is £184.30 and you are able to claim for PIP whether you have a job or not.
PIP is divided into 2 parts – those who have difficulty in doing everyday tasks or getting around because of their condition. This determines how much money you receive based on the difficulty with which you experience everyday tasks and getting around. It is key to point out that the mobility aspect of PIP is not purely related to physical disability, but also for those who have difficulty getting around because of a cognitive or mental health condition such as anxiety.
The government estimates that PIP will grow by 52% by from 2023/2024 to 2027/2028. It is also expected to cost the taxpayer £28 billion per year by 2028/2029, a 110% increase in spending since 2019.
What reforms to PIP are being proposed by the government?
The main reforms to PIP focus on moving it away from a “one size fits all” fixed cash benefit system. Plans to reform personal independence payments (PIP) will include changes to eligibility criteria and assessments.
. While there will be a 12 week consultation period which closes on 23rd July, a number of proposals have already been put forward. These include the following:
- Changing the qualifying period for PIP to determine if a condition is likely to continue long term
- Consider if some people could receive PIP without an assessment based on the support of medical evidence
- Looking at whether evidence of a formal diagnosis by a medical expert should be a requirement to be assessed as eligible for PIP
- Options being considered include one-off grants for help with significant costs including expensive equipment or home adaptations, as well as giving vouchers towards specific costs
- For those receiving PIP with lower or no extra costs, considerations are being made as to whether better access to treatment should be provided instead of cash payments
The government have claimed that these changes are being proposed due to the difference in costs between claimants. However, this does not acknowledge the fact that the current system has been in place since 2013.
Our thoughts
The UK has a productivity issue to go alongside its stagnating economy, and this move is clearly designed to disincentivise more people from claiming PIP due to so-called “lesser mental health conditions” including anxiety and depression.
In combination with Mr Sunak’s previous announcement that the fit note system would be revised by shifting the responsibility for signing people off work from GPs towards “specialist work and health professionals”, it signals a desire to take vast numbers off PIP and reduce those who are signed off work. Whether this will be effective remains to be seen, however many of those affected will question the decision given the lack of effective mental health support in the NHS at present.
We will provide updates on these proposals as and when they arrive. Subscribe to our newsletter for more information about the latest changes in employment law.
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