Everything you need to know about Labour’s new benefits cuts

This week, Labour announced its plans to slash the welfare bill, with disabled people bearing the brunt of the cuts.

The reforms include £5 billion of cuts which will see the eligibility criteria for personal independence payment (PIP) tightened and cuts to the health element of Universal Credit. Speaking in Parliament, Work and Pensions Secretary Liz Kendall defended the cuts: “millions who could work are trapped on benefits – denied the income, hope, dignity and respect that good work brings,” she said.

But Labour MPs and charities have contended that the cuts will be “catastrophic”, push more people into poverty, and increase pressure on public services including the NHS and social care. James Taylor, executive director of strategy at disability charity Scope, criticised the cuts as the “biggest attack on disability benefits on record”.

Here’s everything you need to know about Labour’s disability benefit cuts.

PIP ELIGIBILITY TIGHTENED

PIP is a tax-free payment given to people aged 16 to 64 to help with the extra costs caused by long-term ill-health or disability. PIP is made up of two components: the mobility part, which supports people who need assistance with moving around, and the daily living part, which supports people who need assistance with completing tasks in their day-to-day life. Claimants may be eligible for one or both parts.

While the mobility element of PIP is staying the same, the bar for qualifying for daily living support is getting higher. Liz Kendall confirmed on Tuesday (March 18) that the government will change the criteria to reduce the number of people eligible for PIP.

PIP assessments involve questions about tasks like preparing and eating food, washing and getting dressed. Each is scored on a scale from zero (no difficulty) to 12 (severe difficulty) by a health professional. From November 2026, claimants will need to score at least four points in one of the daily living activities to qualify for the benefit. Claimants who experience less severe difficulties (ones and twos) across a broad range of tasks will no longer qualify.

CUTS TO THE HEALTH ELEMENT OF UNIVERSAL CREDIT

The government argues there is a “clear financial incentive to define yourself as incapable of work”, as if you have limited capacity to work because of a disability or long-term condition, you are eligible to receive a Universal Credit top-up in addition to the standard allowance. People who are permanently signed off work and receive this health top-up of Universal Credit receive more than twice as much as those looking for work.

From 2026, new claimants will see their health element drop from £97 to £50 per week. Current claimants with severe, life-long conditions will have their income protected, but for everyone else, it’s a significant real-terms cut. 

Plus, under the government’s proposals, claimants will not be eligible to get this incapacity top-up until they are aged 22 or over. Around 66,000 18 to 21-year-olds who are currently claiming the benefit will be affected. The government has said the money saved by stopping it will be reinvested into training for young people.

WORK CAPABILITY ASSESSMENT SCRAPPED

Labour are also planning to ditch the Work Capability Assessment, but not in the way the Tories originally planned. Instead, PIP assessments will be used to decide health-related Universal Credit entitlement, making it all about how disability impacts daily life, rather than work capacity.

RIGHT TO TRY WORK WITHOUT RISK

Labour wants to give disabled people the “confidence to work” without the fear of losing benefits and has now pledged that working in itself will not trigger a reassessment or a potential loss of benefits. This will be established in law. 

People who receive the health element of Universal Credit will continue to have a work allowance and will be able to earn up to £404 a month before their income from universal credit is affected (or up to £673 a month if they don’t have a housing amount in universal credit).

FACE-TO-FACE ASSESSMENTS WILL INCREASE

If you have a severe, life-long disability, you’ll be spared the stress of constant reassessments.

But for others, face-to-face assessments will increase. Currently, only seven per cent of PIP assessments and work capability assessments are carried out face-to-face. The government has also pledged to undertake a review of the PIP assessment to improve trust.