As the first Budget of Labour looms, Chancellor Rachel Reeves is grappling with how to address the alleged £22 billion “black hole” in the nation’s finances left by the previous administration. There are growing fears that a controversial change to Work Capability Assessments conducted by the Department for Work and Pensions (DWP) may still be implemented despite the change in leadership at Number 10.
Government benefits have already been a successful avenue for reducing everyday expenditure, with millions of pensioners now ineligible for the £300 Winter Fuel Payment unless their monthly income qualifies them for the Pension Credit top-up. However, under Tory plans to alter the DWP’s disability benefit assessment, approximately 450,000 benefit recipients could lose up to £4,900 annually, as per the Resolution Foundation.
The proposed change would make it harder for disabled Britons to qualify for the Limited Capability for Work Related Activity (LCWRA) award, valued at £416 per month. This award signifies that the recipient is unable to seek gainful employment and is therefore not required to do so.
At present, this level of disability represents the majority of individuals who undergo the DWP assessment process. When this alteration was initially suggested under the former government, it was intended to decrease the number of people exiting the labour market due to mental health issues, while maintaining the LCWRA as “a safety net for those with the most severe mental or physical health conditions.”
The substantial “substantial risk” criterion, a lifeline for those in severe mental health crises that constitutes approximately 20% of successful applications for higher disability benefits, faces the axe. It offers claimants increased support through LCWRA if their health could deteriorate without it.
Regardless of the Budget’s unveiling later this month, the Work Capability Assessment is set for an overhaul, with Labour’s manifesto declaring: “We believe the Work Capability Assessment is not working and needs to be reformed or replaced, alongside a proper plan to support disabled people to work.”
While Labour has not confirmed if they will scrap the “substantial risk” considerationwhich could impact around half a million eligible Brits, pushing them into job searchesstrict financial constraints prevent them from borrowing to fund benefits. Consequently, Labour must either enforce this cost-cutting measure, which is on the Treasury’s books, or hike taxes to cover the benefit payments.
A report from the Resolution Foundation on the impact of the cutbacks clarified: “The rising spending on disability and incapacity benefits is a genuine pressure on the public finances, but the real public policy failure here is the underlying deterioration in the nation’s health.”
“If the need for support for the nearly half a million people affected by this reform is not alleviated, then it’s almost certain that other parts of local or central government will end up stepping in to support these disabled people.”
