Ministers will also protect over two million existing recipients of the health element of universal credit - paid to people deemed to have limited capability for work and work-related activity - along with new claimants with severe conditions from real-terms cuts to their benefits.
The changes were revealed today today in a letter from work and pensions secretary Liz Kendall to Labour MPs (source: Politics UK).
Amendment that would have scuppered benefits legislation
The U-turn came in response to over 120 Labour MPs signing an amendment in opposition to the Universal Credit and Personal Independence Payment (source: Labour List), which would have resulted in the legislation being effectively scuppered in its first parliamentary vote next week.The signatories raised concerns about a lack of consultation with disabled people, the absence of government assessments of the impact of the measures on employment levels or health and social care needs, and the fact that, by the government's own estimates 250,000 additional people would have fallen into relative poverty.
They also criticised what they saw as the slow pace of increase in funding for employment support for disabled people, which is intended to help more into work.
Existing PIP claimants safeguarded from cuts
As originally crafted, the bill would have led to about 390,000 existing PIP claimants losing out on daily living payments worth, in most cases, £73.90 a week, or, for a minority, £110.40, by April 2030 due to a tightening of eligibility criteria (see box below).Now, they will be able to keep hold of their benefit, as will some of the 150,000 carers who faced losing out on payments tied to the person they cared for claiming PIP.
However, about 430,000 new PIP claimants who would have qualified under the existing system, still face losing out due to the new criteria, which are due to come into force in November 2026.
No real-terms cuts to universal credit health payments
In addition, the health element of UC will no longer be frozen, at £423.27 per month, from 2026-27 to 2029-30 for existing claimants, but will rise in real terms, with this also applying to new claimants deemed to have severe conditions that mean they will never be able to work. This protection will apply to about 2.2m people in 2029-30.However, new claimants who do not meet the severe conditions test still face being placed onto a new rate of the health element of UC worth half the current one (£217.26) and having this frozen in cash terms until 2029-30.
In her letter to MPs, Kendall also promised that an upcoming review of the PIP assessment process would be co-produced with disabled people and organisations representing them, "so their views and voices are heard", while she also said employment support funding for disabled people would be increased more quickly than previously planned.
What is PIP and how is the government reforming it?
- It is a tax-free, non-means tested benefit for people aged 16-66 (at the point of claim) who have a long-term condition or disability, and is designed to cover the extra costs of disability.
- Awards are based on a functional assessment by a health professional of the person’s ability to carry out certain daily living tasks (eg preparing food, washing and bathing) and mobility. This is based on a submitted form, with accompanying medical evidence, and a face-to-face, phone or video-based interview. The government intends to increase the number of face-to-face assessments as part of its reforms.
- The health professional must assess that the person’s impairment has lasted for three months and will persist for at least a further nine months. There is a fast-track claims process for people nearing the end of life.
- Claimants are allocated points based on their level of need across a range of activities (10 for daily living and two for mobility) and you must score at least eight points in total in either category to receive the standard rate of the benefit (£72.65 per week for daily living or £28.70 for mobility), and 12 points for the enhanced rate (£108.55 for daily living and £75.75 for mobility).
- Under the reforms, daily living claimants must score at least four points on at least one type of activity. This will now apply to new claimants only, from November 2026.
- Awards are for a fixed period or are ongoing, for which the person receives a light-touch review after 10 years.
Revised reforms are 'a fair package' - Kendall
"We have listened to colleagues who support the principle of reform but are worried about the impact of the pace of change on those already supported by the system," Kendall wrote."Taken together it is a fair package that will preserve the social security system for those who need it by putting it on a sustainable footing, support people back into work, protect those who cannot work and reduce anxiety for those currently in the system."
The climbdowns were welcomed by Labour MP Meg Hillier, a signatory to the amendment, who described the changes as "a good and workable compromise" that showed the government had listened.
She said it could now "move forward to support vulnerable disabled people, reform the welfare system in a just and inclusive way and contribute towards the economic growth and prosperity this country so desperately needs" (source: Politics UK).
Changes amount to 'new and cruel inequality', say disability rights bodies
However, disability-led organisations rejected the concessions and urged MPs to continue in their opposition to the bill.In a joint statement, Disability Rights UK, Crips Against Cuts, National Survivor User Network (NSUN), Mad Youth Organise, Just Treatment, DPAC and Taking the PIP said: "As disabled people, we will not accept a bill that condemns future generations of disabled people to devastating cuts in their vital support in order to avoid that fate ourselves.
"Rather than fixing this bill's dangerous attack on disabled people, these concessions will introduce a new and cruel inequality into our communities. They will condemn young disabled people, and those yet to be disabled, to a future of poverty, hardship and worsening health."
'Government has not gone far enough' - charity
Disability charity Scope was also unmoved by the U-turns, saying: "These new changes will create a two-tier benefits system and an unequal future for disabled people. People who become disabled in the future will not have the same access to support. We're still urging MPs to vote against the bill next week."These changes don't go far enough."
For Carers UK, chief executive Helen Walker said the changes would be "a huge relief for unpaid carers whose income via carer’s allowance is reliant on the person they care for receiving a relevant disability benefit such as the daily living component of PIP."
However, she said the charity remained "deeply concerned about future carers".
"Around 12,000 people become an unpaid carer every day in the UK. The bill as it stands will still include the new four-point rule for PIP and doesn’t change the fact that many new claimants will lose out – it still represents a reduction in financial support and a bleak outlook for future carers who won't be entitled."
Changes 'will create huge differences in support' - think tank
Think tank the Institute for Fiscal Studies (IFS) said the climbdowns would reduce the projected annual savings from the reforms from £5.5bn to £2.5bn by 2029-30. But, echoing the concerns of campaigners, it said the changes would create large differences between claimants based on the timing of the onset of their disability."This will create big differences – thousands of pounds a year, for many years in some cases – between similar people with similar health conditions who happen to have applied at a slightly different time," said IFS associate director Tom Waters.
