The government’s decision to remove cuts to Personal Independence Payment (PIP) from the Universal Credit Bill (UC bill) was the right call. However, damaging and unjustified cuts elsewhere in the health and disability benefits system have been overlooked.
The UC bill will have a devastating impact on disabled people and their families. An estimated 730,000 disabled people will lose out on £3,000 per year, on average. The bill will create a two-tiered system of support, as people who qualify for UC health from the 6th of April 2026 will generally receive a lower rate of support. It won’t help disabled people into work. And people with severe, life-long conditions may miss out on protections.
The government has said that this bill will ‘rebalance’ Universal Credit (UC). They argue that the big gap in income between somebody with, and without, UC health encourages more people to try and prove that they can’t work. This is seen as ‘trapping’ people on benefits. The government claims that by lifting the value of the standard allowance above inflation, and decreasing the value of UC health, people will be incentivised to work. This is wishful thinking.
In reality, this bill will plunge more disabled people into poverty, or deeper poverty. The uplift to the UC standard allowance isn’t large enough to offset cuts for disabled people and isn’t the right way to encourage disabled people into work. And despite assurances to the contrary, as it stands, the bill is likely to leave many seriously disabled people without protection or support.
Several groups of disabled people will be directly affected. This includes those who develop an illness or have an accident after the cut-off date, those whose condition worsens over time, people who lose access to UC temporarily, and disabled children who qualify for UC as adults. There is no clear rationale for why these groups should be entitled to less support.
The UC bill has been designed around savings targets, rather than meaningful reform intended to better support disabled people. The legislative process was rushed and chaotic, with changes brought in without consultation and limited parliamentary scrutiny. As a result, the impact of the bill has not yet been fully debated or understood. This report seeks to help fill this gap.