Universal Credit and PIP: government reveals major changes and reforms to health benefits - what was announced

• Work and Pensions Secretary Liz Kendall has outlined plans to reform health benefits
• Changes to Personal Independence Payment (PIP) will narrow eligibility, impacting around a million people
• Universal credit will see permanent, above-inflation increases, and the work capability assessment will be scrapped by 2028
• Young people under 22 will no longer receive the incapacity benefit top-up to universal credit
• The government has promised to review PIP assessments and consult with disabled people to ensure fairness

Work and Pensions Secretary Liz Kendall has outlined the Government's plans to reform the health benefits system, a step aimed at reducing rising welfare costs.

The long-awaited announcements come just a week before the spring statement, as Chancellor Rachel Reeves faces the challenge of balancing the books amid weak economic growth and rising debt interest costs.

Kendall said that the social security system is "holding our country back" as she revealed plans for changes that she says will save £5bn annually by the end of the decade.

She also revealed that disability benefits will be reformed to ensure the social security system remains sustainable for the long term.

Ahead of the announcement on Tuesday (March 18), MPs from Labour’s left wing and the party’s trade union supporters criticised the rumoured plans, arguing they would penalise the disabled and the poor.

But what was actually announced in the end, and how will the changes affect those on the country’s main health and disability benefits? Here is everything you need to know.

What’s changing with Personal Independence Payments?

Kendall confirmed the expectation that eligibility for PIP will be narrowed, with around a million people likely to be impacted.

Although the Government will not introduce a means test or freeze PIP, claimants will instead need to score four points in at least one activity to qualify for the daily living element.

This change will come into affect from November 2026, and means that, in real terms, qualifying for the UK’s main disability benefit will become more difficult.

The change will not affect the mobility component of PIP. But a revised point system for qualifying is likely to be the most politically controversial topic from today’s announcements.

The Government will also review the PIP assessment process, promising to consult with disabled people and organisations representing them to ensure the system is “fit for purpose both now and in the future.”

Read more: PIP assessment points: new eligibility questions for daily living and assessment criteria scoring sheet

PIP is a devolved benefit, meaning that while it is administered by the UK Government in England, Wales, and Northern Ireland, Scotland has control over its own equivalent system.

In Scotland, PIP has been replaced by Adult Disability Payment (ADP), which is administered by Social Security Scotland rather than the Department for Work and Pensions (DWP).

What’s changing with Universal Credit?

Perhaps the most eye-catching news for universal credit claimants first: there will be permanent, above-inflation increases to universal credit.

Kendall has said this change will result in a £775 annual increase in cash terms by 2029.

Claimants with severe, lifelong disabilities in receipt of universal credit will also generally not be subject to further benefits reassessments.

And the work capability assessment for universal credit, which determines an individual's ability to work, will be abolished by 2028.

Going forward, extra financial support for health conditions under universal credit will be assessed solely through Personal Independence Payment (PIP).

This means additional income will be based on the impact of an individual’s health condition or disability, rather than their ability to work.

Kendall said she is committed to ensuring that those on universal credit with the "most severe disabilities and health conditions that will never improve" are not reassessed, so they can have the confidence and dignity they deserve.

The Work and Pensions Secretary also revealed that young people under 22 will no longer be able to claim the incapacity benefit top-up to universal credit.

The Government seems to be attempting to disrupt a perceived trend of young people transitioning directly from school to health benefits.

How have the announcements been received?

A number of disabled groups and charities have opposed the welfare reform plans. That includes Scope, which has said the cuts should "shame the government to its core."

James Taylor, the charity’s executive director of strategy, criticised the government for "choosing to penalise some of the poorest people in our society."

“Life costs more if you are disabled,” he said. “Ripping £5bn out of the system by 2030 will be a catastrophe for disabled people's living standards and independence."

The Government will consult on some of the reforms, but not all. Taylor anticipates a "strong response" to the consultation and urges the government "to listen to disabled people and think again."

Mental health charity Mind has also called on the Government to reconsider its plan to cut welfare spending.

Sarah Hughes, the charity’s chief executive, said: “Mental health problems are not a choice, but it is a political choice to make it harder for people to access the support they need to live with dignity and independence.

“These reforms will only worsen the nation’s mental health crisis,” she added, while emphasising the need for a benefits system that supports individuals into sustainable work while also assisting those who are unable to work due to health reasons.

“Today’s announcement does the opposite, and we urge the Government to rethink these plans.”

What do you think of these proposed changes to health benefits and universal credit? Do you feel they’ll have a positive or negative impact on those who rely on them? We’d love to hear your thoughts - share your opinions in the comments section.