The government today unveiled what it describes as “the biggest shake up to welfare in a generation” as it attempts to save £5 billion from the benefits system by 2029/30.

The new Pathways to Work green paper published by the Department for Work and Pensions sets out a raft of proposals, including:

• Ending reassessments for disabled people who will never be able to work and people with lifelong conditions “to ensure they can live with dignity and security”
• Scrapping the controversial Work Capability Assessment “to end the dysfunctional process that drives people into dependency”
• Providing improved employment support backed by £1 billion – “one of the biggest packages of employment support for sick and disabled people ever”
• Legislating to protect those on health and disability benefits from reassessment or losing their payments “if they take a chance on work” – to be known as the ‘Right to Try’
• Reintroducing reassessments for people on incapacity benefits who have the capability to work “to ensure they have the right support and aren’t indefinitely written off”
• Targeting Personal Independence Payments for those with higher needs by changing the eligibility requirement to a minimum score of four on at least one of the daily living activities to receive the daily living element of the benefit, in addition to the existing eligibility criteria
• Rebalancing payment levels in Universal Credit to improve the Standard Allowance
• Consulting on delaying access to the health element of Universal Credit until someone is aged 22 and reinvesting savings into work support and training opportunities through the Youth Guarantee.

The government says the reforms will address “years of inaction” which has led to one in eight young people not currently in work, education or training and 2.8 million people economically inactive due to long term sickness – one of the highest rates in the G7.

One of the key areas of reform is to Personal Independence Payments (PIP), which the government says have risen rapidly and are becoming unsustainable.

Since the pandemic, the number of working-age people receiving PIP has more than doubled from 15,300 to 35,100 a month. The number of young people (16-24) receiving PIP per month has also risen from 2,967 to 7,857 a month. Over the next five years, if no action is taken, the number of working age people claiming PIP is expected to increase from 2 million in 2021 to 4.3 million, costing £34.1 billion annually.

Work and Pensions Secretary Liz Kendall said: “Our social security system must be there for all of us when we need it, now and into the future. That means helping people who can work to do so, protecting those most in need, and delivering respect and dignity for all.

“Millions of people have been locked out of work, and we can do better for them. Disabled people and those with health conditions who can work deserve the same choices and chances as everyone else.

“That’s why we’re introducing the most far-reaching reforms in a generation, with £1 billion a year being invested in tailored support that can be adapted to meet their changing circumstances – including their changing health – while also scrapping the failed Work Capability Assessment.

“This will mean fairness for disabled people and those with long term health conditions, but also for the taxpayers who fund it as these measures bring down the benefits bill.

“At the same time, we will ensure that our welfare system protects people. There will always be some people who cannot work because of their disability or health condition. Protecting people in need is a principle we will never compromise on.”

Responding to the government’s green paper, JRF Chief Executive Paul Kissack said: “No truly moral choice would leave disabled people without the very support that is designed to allow them to lead a dignified life, nor would it leave them facing hardship. These would be unprecedented disability benefits cuts.

“Ideas like the Right to Try Guarantee help to remove the barriers that prevent people from working but enormous cuts mean the Government risks undermining these positives. Making it harder for people to qualify for support, or cutting their support, puts more pressure on people who are already struggling to cope.

“Ministers should boost the basic rate of Universal Credit without taking the extra support from the pockets of disabled people receiving UC health. It should be funded by those with the broadest shoulders.

“A government that came to office pledging to end the moral scar of food bank use clearly should not be taking steps that could leave disabled people at greater risk of needing to use one.”

Louise Murphy, Senior Economist at the Resolution Foundation, said: “The package of measures announced in today’s Green Paper should encourage more people into work. But any living standards gains risk being completely over-shadowed by the scale of income losses faced by those who will receive reduced or no support at all – irrespective of whether they’re able to work.

“Around one million people are potentially at risk of losing support from tighter restrictions on PIP, while young people and those who fall ill in the future will lose support from a huge scaling back of incapacity benefits.

“The irony of this Health and Disability Green Paper is that the main beneficiaries are those without health problems or a disability. And while it includes some sensible reforms, too many of the proposals have been driven by the need for short-term savings to meet fiscal rules, rather than long-term reform. The result risks being a major income shock for millions of low-income households.”