The government has launched a consultation on the personal independence payment (PIP), as it attempts to make the disability benefits system “fit for the future”.

According to the government, the Modernising Support Green Paper will explore how the welfare system could be redesigned to ensure people with disabilities and long-term health conditions get the support they need to achieve the best outcomes, with an approach that focuses support on those with the greatest needs and extra costs.

The government says that the UK’s health landscape has changed since PIP was introduced in 2013, with the intention that it would be a more sustainable benefit that would support disabled people to live independently by helping with the extra costs they face.

However, the government now claims that the caseload and costs are now spiralling, with 2.6 million people of working age now claiming PIP and disability living allowance – with 33,000 new awards for PIP each month, which is more than double the rate before the pandemic. This government expects this to cost £28 billion a year by 2028/29 – a 110% increase in spending since 2019.

The government says this is partly fuelled by a rise in people receiving PIP for mental health conditions, such as mixed anxiety and depressive disorders, with monthly awards doubling from 2,200 to 5,300 a month since 2019.

Since 2015, the proportion of the caseload receiving the highest rate of PIP has increased from 25% to 36%. And many more people being awarded PIP now have mental health conditions than when it was first introduced, the government says.

Rishi Sunak, the prime minister, said: “It’s clear that our disability benefits system isn’t working in the way it was intended, and we’re determined to reform it to ensure it’s sustainable for the future, so we can continue delivering support to those who genuinely need it most.

“Today’s Green Paper marks the next chapter of our welfare reforms and is part of our plan to make the benefits system fairer to the taxpayer, better targeted to individual needs and harder to exploit by those who are trying to game the system.

“We’re inviting views from across society to ensure everyone has a chance to make their voices heard and shape our welfare reforms.”

Work and pensions secretary Mel Stride said: “We’re making the biggest welfare reforms in a generation – protecting those most in need while supporting thousands into work as we modernise our benefit system to reflect the changing health landscape.

“A decade on from the introduction of PIP, this Green Paper opens the next chapter of reform, enhancing the support for people with health conditions and disabilities while ensuring the system is fair to the taxpayer.”

Andy Cook, Chief Executive of the Centre for Social Justice, said: “Our landmark Two Nations report laid bare the lasting impact of the pandemic on our nation’s most vulnerable communities.

“With the welfare system now grappling with the combined challenges of economic inactivity, school absence and mental health, this consultation provides a meaningful opportunity to shape the future of Britain’s welfare state.

“We owe it to those most struggling to make sure the benefit system provides the best support to those who need it. And with costs skyrocketing, it is time to bring the welfare system into the post-lockdown age.”