Last Updated on 02/07/2025 by Crip Life
The UK government has announced a radical overhaul of the welfare system, marking the most significant reforms in decades. This ambitious initiative, spearheaded by Work and Pensions Secretary Liz Kendall, aims to address economic inactivity and encourage more people, particularly those with long-term health conditions or disabilities, to enter or re-enter the workforce.
The “Get Britain Working” White Paper outlines a multi-billion-pound investment in employment support while simplifying benefits to create a system that encourages work rather than long-term dependence on state aid.
Legislative breakthrough: July 2025 Bill passes with concessions
On 1st July 2025, the UK Parliament passed a revised welfare reform bill with a 75-vote majority (335–260), following substantial concessions from the Labour government aimed at calming internal rebellion. The bill had originally forecast savings of £5.5 billion by 2029–30, largely through stringent cuts to Personal Independence Payment (PIP) and Universal Credit (UC). Due to recent amendments, projected savings have been reduced to £2.5 billion.
Key Amendments Include:
- PIP Eligibility Reforms: The proposed requirement for claimants to score at least four points in a single daily living activity was withdrawn. Instead, a comprehensive review, led by Minister Stephen Timms, will assess PIP criteria, with findings expected in autumn 2026.
- Universal Credit Changes: For new UC applicants under 22, payments will now be £50 weekly, down from £97. However, a proposed four-year payment freeze has been scrapped, with payments now set to rise in line with inflation.
- Labour Party Rebellion: Despite changes, 49 Labour MPs defied the party whip, marking the largest rebellion under Prime Minister Keir Starmer.
- Criticism of a “Two-Tier” System: Opponents warn that stricter rules for new claimants will create disparities and may push 150,000 people into poverty by 2030.
- Employment Support Boost: A £300 million package for disabled individuals has been announced, part of a broader goal to invest £1 billion by 2028–29.
Why welfare reform is needed
The UK continues to grapple with rising economic inactivity, particularly post-Covid. Over 2.8 million people are currently classified as economically inactive due to long-term illness. PIP claims have also surged—from 15,300 new claims/month pre-pandemic to 35,100 today. If current trends continue, PIP claims could exceed 4.3 million by 2030, pushing annual spending to £70 billion—a third of the NHS budget.
Core features at a glance
Scrapping the Work Capability Assessment (WCA)
The WCA, long criticised for being outdated and punitive, will be abolished. Financial support will instead be based on PIP evaluations, focusing on daily living impact rather than work capacity.
Personal Independence Payment (PIP) overhaul
Though the most severe changes have been reversed, the government still plans to:
- Increase the number of face-to-face assessments while retaining alternatives.
- Resume mandatory reassessments for all except those with permanent conditions or receiving end-of-life care.
- Continue refining eligibility via the review chaired by Stephen Timms.
Universal Credit (UC) Adjustments
Youth applicants under 22 will receive £50/week, with the removed freeze ensuring future adjustments match inflation.
The Youth Guarantee Initiative delays access to the UC health element until age 22, with savings redirected to employment support.
Updating the Access to Work Scheme
Reforms aim to:
- Expand access to assistive tech and workplace adjustments.
- Modernise accessibility standards for a more inclusive workforce.
Unemployment benefit simplification
ESA and JSA will merge into a non-means-tested, time-limited benefit, ensuring smoother transitions into employment for eligible individuals.
“Right to Try” employment guarantee
This initiative will enable individuals to test job roles without incurring immediate benefits loss, thereby reducing risk and promoting job trials.
Tailored employment support investment
The government commits £1 billion to personalised employment support. Key features include:
- Skills training, workplace accommodations, and Support Conversations.
- Integration of the Youth Guarantee with training pathways.
Protecting the most vulnerable
- Existing PIP and UC claimants will retain their benefits.
- A new financial premium will support those with lifelong, severe disabilities.
- Repeat reassessments for permanently disabled individuals will be eliminated.
- Safeguarding protocols will be co-developed with stakeholders.
Disability sector and public reactions
Despite revisions, disability charities and advocates remain concerned:
James Watson-O’Neill, Chief Executive of the national disability charity Sense, said:
“Today’s vote in Parliament is deeply distressing. By choosing to advance this bill, MPs have voted for measures that the government’s data says will push 150,000 disabled people into poverty. This is not the right way to reform our welfare system — it’s a move that has already caused significant fear and anxiety within the disabled people’s community.
“We’re incredibly grateful to all those who spoke out against the bill. Their efforts helped secure important government concessions, which means some disabled people will retain the support they rely on. However, this creates a deeply unfair two-tier system — protecting some while leaving new claimants facing serious financial hardship. And the government’s latest concession, to delay the tightening of the criteria for PIP, doesn’t change the fact that it will eventually become harder for new claimants to access this vital benefit.
“Looking ahead, we urge the government to immediately reconsider its proposal to remove the health element of Universal Credit from young people until they turn 22. We also want to work constructively with them to expand the eligibility criteria for additional support for those who will never be able to work, to ensure no one is left behind.”
When these reforms were first announced in March 2025, James Taylor, Head of Policy at Scope, said:
“The biggest cuts to disability benefits on record should shame the government… They are choosing to penalise some of the poorest people in our society.”
Jon Sparkes OBE, CEO at Mencap, added:
“With the right support, people can live brilliant independent lives… but PIP is not optional – it funds essential costs. These proposals risk catastrophic hardship for learning-disabled people.”
Economists and activists alike warn that employment efforts must be matched with job accessibility and mental health support, or the reforms risk backfiring.
Two-tier system worries
There is increasing concern about a divided welfare system, where newer claimants face tougher criteria while existing recipients retain benefits. This could result in growing inequality and marginalisation.
What do you think of these welfare changes? Are they a step toward equity or a rollback of essential support? Let us know in the comments, on social media, or by sharing your personal story.
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