DWP change to Universal Credit and PIP 'could put 50,000 people into poverty'

Around 50,000 disabled and chronically-illDepartment for Work and Pensions (DWP) claimants will be pushed into poverty by the end of the decade because of cuts to incapacity benefit, it has been claimed.

This comes despite Labour Party government ministers abandoning the majority of their welfare reform proposals, MPs have cautioned. Labour shifted to scrap some of the most contentious elements of its disability reforms following a parliamentary uprising.

However, whilst all current Universal Credit claimants and fresh claimants with severe or terminal conditions are now safeguarded, from next year other claimants with restricted health capacity for work will witness monthly payments slashed from £423.27 to £217.26. This comes after the story broke of UK homes taking steps not seen for two years amid Rachel Reeves tax rise fears.

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The committee chair, Labour's Debbie Abrahams, said: "We welcome the concessions that thegovernment made to the Universal Credit bill, but there are still issues with these welfare reforms, not least with the cut in financial support that newly sick and disabled people will receive."

50,000 people who claim the two DWP benefits from next April, 2026, after developing a health condition or becoming disabled will be plunged into poverty by 2030 as a result of cuts, claims Abrahams.

"We recommend delaying the cuts to the Universal Credit health premium, especially given that other policies - such as additional NHS capacity, employment support, or changes in the labour market to support people to stay in work - have yet to materialise.

"We agree in a reformed and sustainable welfare system, but we must ensure that the wellbeing of those who come into contact with it is protected.

"The lesson learned from last month should be that the impact of policy changes to health-related benefits must be assessed prior to policy changes being implemented to avoid potential risks to claimants," added Abrahams.

"We share the minister's concern about young people being trapped in economic inactivity before their working lives have even begun, but we do not see why this means they should lose entitlement to universal credit health," the report stated.

A government spokesperson told Birmingham Live: "Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty.

"The reforms will rebalance Universal Credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament."