Further details on welfare reforms published ahead of Second Reading

New details on the Government's welfare reforms will be published today (Monday 30 June) ahead of Second Reading of the Universal Credit (UC) and PIP Bill on Tuesday.   

The terms of reference for the first ever comprehensive review of the PIP assessment in over a decade will be published today. The review – led by Minister for Social Security and Disability, Sir Stephen Timms - will ensure the system is fair, supportive and reflects the realities of modern life. 

It will be co-produced with disabled people, the organisations that represent them, and MPs with the core objective of delivering better experiences and better outcomes for disabled people and people with health conditions. 

The review aims to respond to the changing picture of population health over the last decade including the rising prevalence of long-term health conditions and disability in the working-age population.

Monthly PIP awards have more than doubled since the pandemic, rising from 13,000 to 34,000—a rate of around 1,000 new claims per day, or the population of Leicester every year. Much of this increase is driven by mental health conditions with awards for anxiety and depression having tripled from 2,500 per month in 2019 to 8,200 in 2023.  

To better help those with mental ill-health, the government has recruited more than 6,700 extra mental health workers since July while rolling out more access to occupational health services and developing digital resources, so employers better support their staff 's mental wellbeing.   

Many people have also reported poor experiences with the assessment process. The current system often fails to reflect the real-world impact of disability on daily life and is no longer fit for purpose—making reform urgent and essential. 

Alongside the review, draft regulations for the new Right to Try Guarantee will be laid in Parliament. This will, for the first time, enshrine in law the right for people receiving health and disability benefits to try work without fear of reassessment. This includes disabled people and people with health conditions—such as those recovering from illness—who want to return to work now their health has improved.  

This responds directly to concerns raised by disabled people and people with health conditions— 37% of whom say they want to work but are held back by fear of losing their benefits according to a DWP survey. 

Fixing the broken welfare system this government inherited is central to breaking down barriers to opportunity and driving up living standards - delivering on the Government's Plan for Change. The government's reforms will ensure disabled people have the support they need to live independently, with dignity, and will unlock opportunities to get into work without facing the prospect of losing the help they need. 

Work and Pensions Secretary Rt Hon Liz Kendall said: 

“We must build a welfare system that provides security for those who cannot work and the right support for those who can. Too often, disabled people feel trapped—worried that if they try to work, they could lose the support they depend on. 

“That is why we are taking action to remove those barriers, support disabled people to live with dignity and independence, and open routes into employment for those who want to pursue it. 

“This is about delivering a fairer, more compassionate system as part of our Plan for Change which supports people to thrive, whatever their circumstances.” 

The Government will also set out details today of the changes they intend to make to the Bill as part of the government's welfare reforms. The Government has listened to MPs who support the principle of reform but are worried about the pace of change for those already supported by the social security system. 

That's why ministers have confirmed that as part of the Bill: 

• All existing PIP recipients will remain on the current system and the proposed changes to eligibility as part of the bill will only apply to new claims from November 2026.   

• 200,000 individuals in the Severe Conditions Criteria group - individuals with the most severe, lifelong conditions who are unlikely to recover – will not be called for a UC reassessment. 

• All existing recipients of the UC health element and new customers with 12 months or less to live or who meet the Severe Conditions Criteria will see their standard allowance combined with their Limited Capability for Work Related Activity (LCWRA) rise at least in line with inflation every year from 2026/27 to 2029/30. 

Nearly 4 million households will receive an income boost with the main rate of UC set to increase above inflation every year for the next four years – estimated to be worth £725 by 2029/30 for a single household 25 or over. This is around £250 higher than an inflation only increases.   

The Bill will also rebalance UC rates by reducing the health element for new UC claims to the equivalent of £50 per week from April 2026, fixing a system which incentivises people to define themselves as incapable of work by paying health element recipients more than double the standard amount.  

These reforms will be also underpinned by a significant investment in employment support. Funding will be brought forward to accelerate tailored employment, health and skills support to help disabled people and those with health conditions get into work as part of our Pathways to Work guarantee. 

£300 million will be brought forward over the next three years, increasing total employment support by £2.2 billion over four years – upholding our commitment to spend £1bn per year by the end of the decade. 

This investment will accelerate the pace of new planned investment in employment support programmes, building on and learning from successes such as the Connect to Work programme, which already provides disabled people and people with health conditions with one-to-one support at the point when they feel ready to work.  

And for people whose health challenges make it difficult to find or stay in work, our initiative in partnership with the NHS, WorkWell, will offer personalised support to help individuals manage their health while preparing for or returning to employment. This will build on progress already made to get 384,000 people into work since this government entered office and will come alongside fundamental reforms to patient support as part of the landmark 10 Year Health Plan.    

Health professionals will be on hand to connect people with services like physiotherapy, mental health support, and more. They will also be supported by a dedicated employment adviser who understands their specific health needs and guide them every step of the way.   

For too long, meaningful reform to our welfare system has been ducked and delayed – stunting productivity, slowing down growth and ultimately holding British people and our country back. The government is taking decisive action and the difficult decisions needed to restore trust and faith in the system, providing opportunities for those who can work, and security for those who cannot.  

ENDS

NOTES TO EDITORS: 

• The UC and PIP Bill is scheduled for Second Reading in the House of Commons Parliament on Tuesday 01 July. 

• The UC and PIP Bill legislates for: 

• A new additional eligibility requirement for the daily living component of PIP so that from Nov 26 new claimants must score a minimum of 4 points must be scored on at least one daily living activity to be eligible for the daily living component. 
• Rebalancing of UC health and standard elements including reducing the health top-up for new claims to £50 per week from April 2026. 
• Ensure that all existing recipients of the UC health element - and any new claimant meeting the Severe Conditions Criteria and/or that has their claims considered under the Special Rules for End of Life (SREL) – will receive the higher UC health payment after April 2026. 
• Increasing the UC standard allowance above inflation for the next four years - worth an estimated £725 by 2029/30 for a single adult aged 25 or over. 
• Exemptions from reassessment for those with the most severe, lifelong conditions. 

• The Government has also confirmed that it will amend the Bill at Commons Committee stage to:  

o   Provide protection for existing PIP claimants—ensuring they remain on the current system and are unaffected by new eligibility rules. 

o   For all existing recipients of the UC health element - and any new claimant meeting the Severe Conditions Criteria and/or that has their claims considered under the Special Rules for End of Life (SREL) – the LCWRA rate for this group will now be uprated each year this Parliament to ensure their combined rate of the Universal Credit standard allowance and LCWRA is protected in real terms.  

• The Bill currently includes a 13-week transitional period for the PIP changes, but this will be superseded by long-term protections for existing claimants. 

• The Terms of reference for the PIP review, draft regulations for the Right to Try Guarantee, the draft amendment to the Bill which will enact the change to PIP, and analysis of poverty impacts will be published later today. 
• The DWP work aspirations survey can be found here: Work aspirations and support needs of health and disability customers: Interim findings 

• Latest data published last week shows almost one in four adults in England have common mental health conditions – and that adults with problem debt and those out of work are far more likely to experience mental health conditions. 

• To better help those with mental ill-health, the government is boosting access to support, with more than 6,700 extra mental health workers since July, marking a significant milestone towards its goal of 8,500 by the end of this Parliament. 

• It has also started rolling out more access to occupational health services and developing digital resources so employers can better support their staff's mental wellbeing as part of its drive to get people back to health and back to work.