BENEFITS will have to be slashed again after ministers blew their one big shot to fix Britain’s spiralling welfare bill, Government insiders fear.
Plans for a major crackdown were watered down – with No10 accused of panicking over leaks and pushback from leftie MPs.
The reforms were originally due to be unveiled at the – but were brought forward and softened following a wobble in Downing Street.
One senior source told the final package no longer tackles the core of the crisis – branding it a set of “half measures”.
They said: “We had one chance to do this properly. The whole point was to get it done in one go.
“We’ll have to come back to this but next time will be much harder politically.
“The benefits bill is out of control, and this won’t be enough to turn the tide.”;
The reforms aim to slash spending by tightening eligibility for the main disability benefit, the, and cutting the health top-up for new Universal Credit claimants.
But ministers had planned to go much further – including a freeze on new PIP awards.
The number of people on sickness or disability benefits in and has soared from 2.8 million to 4 million since 2019.
The spiralling welfare bill hit £48 billion last year and is on track to skyrocket to £67 billion by 2029-30 – more than the entire schools budget.
This comes after the Chancellor laid out howduring the Spring Statement on March 26.
Giving her , the Chancellor said: “If you can work, you should work…
“More than 1,000 people qualify for PIP every single day.
“And one in eight young people are not in employment, education or training.”
unveiled additional reductions to Universal Credit's incapacity payments.
For existing claimants, the current incapacity payment of £416.19 per month for individuals with limited capability for work and work-related activity will remain unchanged and frozen at this level until 2030.
And it was confirmed that for all new claims from April 2026, this amount will be halved to £208.10 per month, or £50 per week, and frozen at this reduced rate until 2030.
Other changes to welfare previously announced include:
- Merging jobseeker's allowance and employment support allowance, with a system that awards higher payments to those who have a work history compared to those who have not.
- Abolishing the Work Capability Assessment (WCA) by 2028, with all health-related payments to be transitioned to PIP in the future.
- Banning under-22s from claiming incapacity benefitsunder Universal Credit entirely.
- Temporarily introducing an above-inflation rise to Universal Credit's standard allowance (until 2029), while reducing the highest incapacity payment.
- Raising the eligibility threshold for PIP, achieving £3.4billion in annual savings.
- Launching a “Right to Work Guarantee”, allowing unemployed individuals to attempt returning to work without losing benefits if they find it unsustainable.
has confirmed that it will bring forward primary legislation this session to enable delivery of the PIP additional eligibility requirement and UC rebalancing reforms from April 2026.
It added that the Right to Work Guarantee will be delivered through separate primary legislation which will be introduced in due course.
Here we explain exactlymean for you.
Tougher PIP assessments
The DWP will tighten the criteria for claiming PIP, a non-means-tested benefit designed to support individuals with health conditions.
Currently, PIP is worth up to £108 per week.
Under the proposed changes, applicants will need to score a minimum of four points in at least one specific daily living activity to qualify for the benefit.
This marks a shift from the current system, which allows individuals to qualify with a lower overall score spread across multiple activities.
As a result, some existing PIP recipients, as well as new applicants, may no longer meet the eligibility requirements and could lose access to the benefit.
There will also be a review of the PIP assessment process.
People with severe conditions will be exempt from undergoing further reassessments.
Currently, living allowance (DLA) is provided to children under the age of 16, after which they transition to PIP.
The review will also explore the possibility of raising the transition age from 16 to 18.
Universal Credit health assessments scrapped
The Work Capability Assessment, which determines whether someone is deemed fit for work or has limited capability for work (LCW) or limited capability for work-related activity (LCWRA), will be scrapped by 2028.
Instead the DWP will use the PIP assessment to assess entitlement for any Universal Credit health supplements.
While current LCWRA claimants will retain their current health element (£416.19 per month) and benefit from a standard allowance rise, new claimants will receive half of this amount from April 2026 (£208 a month).
A new premium is proposed for those with the most severe, lifelong conditions who cannot work.
Claimants under the age of 22 will no longer be eligible for the health element of Universal Credit.
The government is also introducing legislation to remove barriers to for benefit claimants by ensuring that attempting work will no longer automatically trigger a reassessment or of their award.
The intention is to give people the confidence to try work without fear of immediately losing their benefits if it doesn't work out.
Merging jobseeker benefits
has also put forward plans to merge new style jobseeker's allowance (JSA) and new style employment and support allowance (ESA) into a single benefit called “Unemployment .”
This new benefit would provide payments at the same rate as ESA, set at £138 per week, and would be time-limited.
Eligibility would not be determined solely by whether an individual has previously worked, but instead by their contributions.
Those with a recent work and sufficient contributions would qualify.
Individuals claiming the new Unemployment Insurance benefit would be required to actively seek work, although reasonable adjustments would be made for those with health conditions that limit their ability to work.
However, the introduction of this benefit would bring an end to the current indefinite entitlement to new style ESA for those assessed as having LCWRA.
Once the time-limited period ends, claimants who remain unemployed would need to apply for Universal Credit, subject to their personal circumstances.
