The UK government has unveiled sweeping changes to the welfare system, aiming to encourage more disabled and long-term sick individuals into work.
The reforms, described as the biggest shake-up to the benefits system in a generation, include scrapping the Work Capability Assessment and introducing a “right to try” work guarantee. The changes are backed by a £1 billion investment in employment support and are part of the government’s broader economic strategy.
The Work and Pensions Secretary, Liz Kendall, announced the measures stating that the reforms would remove barriers to employment while ensuring that those unable to work receive adequate support. The government argues that years of inaction have contributed to high levels of economic inactivity, with 2.8 million people currently out of work due to long-term sickness.
Key Changes to the Welfare System
One of the most significant changes is the removal of the Work Capability Assessment, which determines eligibility for health-related benefits. Instead, a new single assessment will be introduced, based on the PIP assessment, focusing on how a disability affects daily living rather than work capacity. The government argues that this will end a system that discourages people from seeking employment.
The reforms also include measures to protect those who attempt to return to work. Under the “right to try” guarantee, individuals on health and disability benefits will not face immediate reassessment or risk losing their payments if they take a job. Reassessments will be scrapped for people with lifelong conditions who will never be able to work. However, they will be reintroduced for those on incapacity benefits who may have the potential to enter employment.
The government is also adjusting eligibility criteria for PIP, requiring claimants to score at least four points on one daily living activity to qualify for the daily living element. Universal Credit will also be rebalanced, with the Standard Allowance increasing by £775 annually in cash terms by 2029/30. The health element of Universal Credit may also be delayed until the age of 22, with the government proposing to reinvest savings into youth employment support.
Impact on Employers and the Private Sector
The reforms are expected to have implications for businesses, with the government signalling that employers may play a role in supporting the drive to reduce economic inactivity. David Williams, Head of Group Risk at Towergate Employee Benefits, suggests that employers will need to consider how they provide benefits cost-effectively while ensuring they enhance productivity.
“If a business has healthy, active employees then they will have a healthy trading performance. But healthy, active employees don’t happen by chance. It happens through focusing on employees and seeing them as the valuable asset they are. It happens through giving employees every possible opportunity to stay healthy and contributing to the business.”
Williams added that the changes do not signal the end of benefits but rather an evolution, with private sector solutions becoming increasingly important in reducing absenteeism and maintaining workforce engagement.
