Disability benefit reforms: key changes and what comes next

In this blog post, we break down the government’s concessions on the planned disability benefit reforms to show what’s changing, when the changes will take effect, what remains uncertain, and how organisations can prepare now for the potential impact. The period leading up to this vote has been uncertain, with widespread impacts on disabled people and support organisations. This blog will help organisations to know what changes are coming next.

In our previous blog we outlined the government’s initial plan for disability reform.

The main changes made before the second reading of the Universal Credit and Personal Independence Payment bill are that:

• All reforms and changes for the Personal Independence Payment (PIP) have been halted
• Changes will be reconsidered following the outcome of the Timms Review
• People currently receiving the health element (LCWRA) of Universal Credit (UC) will see their support protected
• This will no longer be frozen from 2026

The following planned disability benefit reforms remain largely in place:

• New recipients of the health element (LCWRA) of UC will see this amount initially halved and then frozen from April 2026
• The planned increase in the standard allowance for all claimants above inflation will continue, and is expected to result in a monthly rise of approximately £21 for single claimants over 25 by 2029/30
• People eligible for the health element of UC will only be passported through receipt of the daily living component of PIP from 2028
• This is expected to remain restricted to people over 22, even if younger claimants are receiving PIP
• The DWP will continue to introduce a legal ‘right to try’ whereby a claimant can try employment without worrying that it could affect any wider benefit claims
• Contributory benefits, such as New Style Job Seekers Allowance and New Style Employment and Support Allowance, will continue to be merged into a new time limited contributory benefit
• The government has increased the amount it has pledged for employment support for sick and disabled claimants through an increase in the Pathways to Work of £300 million over the next four years

Although overshadowed by the drama of the second reading, the Timms Review gives the government an opportunity to get reform right. We are pleased to see several positive measures retained, including formalising the ‘right to try’, the uplift to UC, and alongside this, investment in employment support and a boost to statutory sick pay.

However, there is considerable pressure on the outcome of the Timms Review into disability benefits and questions remain over the costs and savings involved with these plans.

Disability benefits reforms savings (July 2025)

The previously forecast savings of £5 billion arising from these reforms are likely to be eliminated, with any savings from disability reform awaiting the Timms Review and an increase in the basic rate of benefits. In addition to the previously announced change in eligibility for the Winter Fuel Payment, the level of projected savings from welfare reform is limited and raises questions about the financial impact this may have on the public finances.

We are concerned about the elimination of the distinction between disability and illness through the merger of PIP and the health element of UC. The DWP and the public sector will lose an important marker of illness for people who are not getting statutory sick pay.

A two tier system for the health element of UC also feels unsustainable, and current awards should probably be treated in the same way as other transitional protection under UC. We hope that the Timms review will take these points into account.

There is still plenty to be concerned about, particularly around access to the health element of UC, and a two tier system for current and new claimants. However, the Timms Review allows the government to look at these issues again as it seeks to support people into work and reduce the welfare bill.

Local authorities will still have significant responsibilities regardless of the changes to the bill.

Councils are responsible for helping people to access social care support, including aids and adaptations, ensuring people are in a position to stay active and independent, and have new responsibilities to support people into work through the economic inactivity trailblazers going live now, and the follow on pathways to work support.

1. Join our webinar: Understanding the impact of disability benefits reforms on local authorities, Wednesday 27 August. Register here
2. Learn more about Camden Council’s work by emailing hello@policyinpractice.co.uk
3. Read our previous blogs on disability benefits reforms:
   New analysis: How disability benefits changes will affect your local area
   The impact of planned disability reforms on local authorities and the NHS
   Supporting residents through disability benefit changes: what you need to know
   Reforming benefits and support to get Britain working: what the changes to sickness and disability benefits mean