All you need to know about changes to benefits in welfare shake-up

The government has announced plans for major changes to the benefits system aimed at cutting the growing amount the UK spends on welfare.

UK Prime Minister, Kier Starmer

Stricter tests for personal independence payments (Pip) is paid to people in England and Wales who have difficulty completing everyday tasks or getting around as a result of a long-term physical or mental health condition.

It is not means tested and is available to people who are working.

The payments will go up in line with inflation this year. However, the eligibility criteria will be tightened up from November 2026, potentially resulting in reduced payments for many.

It will become harder to qualify for the daily living component of Pip, which starts at £72.65 a week.

There will also be a review of the Pip assessment process. However, those with the most severe, long-term conditions will no longer face any reassessments, under the proposed reforms.

Meanwhile, the work capability assessment that determines who is eligible for incapacity benefits will be scrapped in 2028, under the proposals. Instead, people applying for health-related financial support and disability benefits will only face one assessment, based on the current Pip system.

In the meantime, incapacity benefits under universal credit will be frozen in cash terms for existing claimants at £97 per week from April next year.

The amount will be reduced to £50 per week in 2026/2027 for new claimants. But those receiving the new reduced universal credit health element after April 2026, who have the most severe, life-long health conditions, who have no prospect of improvement and will never be able to work, will see their incomes protected through an additional premium.

Those aged under 22 will no longer be able to claim the incapacity benefit top-up to universal credit under these proposals.

The government says any savings generated from the delay would be reinvested into work support and training opportunities for this age group.

The DWP said: "ministers are also consulting on raising the age at which young people move from Disability Living Allowance for children to Pip from 16 to 18. The idea behind this is that young people will have work and training rather than a pathway to economic inactivity",

Differences in Scotland and Northern Ireland

Most of the measures apply to the whole of Great Britain. Pip applies to England and Wales only.

If there is a cut in the budget for Pip, a proportionate figure will be cut from the amount the Treasury gives to the Scottish government.

So Scottish ministers would have the choice of applying a similar scale of cuts, or of finding funds from other spending, or tax, to fill that gap.

The benefits system is devolved in Northern Ireland but in practice the Stormont administration mostly copies what is happening in England and Wales.

If NI ministers choose not to apply the cuts they would have to fund that by making savings on other parts of their budget or raising more revenue.