Disability benefit cuts could be as 'politically toxic' as winter fuel payment, Labour warned

Disability benefit cuts could prove to be as “politically toxic” for Labour as the winter fuel payment, a leading think tank has warned, as new research challenges the government’s justification for reducing access to benefits.

Labour recently announced a series of proposals to cut the disability benefits bill, which included restricting the eligibility criteria for the personal independence payment (PIP), as well as freezing the health element of universal credit for current claimants and cutting it in half for new claimants.

An estimated 800,000 people are set to lose at least £4,200 a year by the end of the decade as part of the plans to tighten PIP.

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The government justified this by claiming the number of disabled working-age people in England and Wales had risen by 17%, but the number of people receiving disability benefits had increased by double this rate (34%) – used to imply a trend of people getting benefits without being eligible.

However, the New Economics Foundation‘s latest research has found that only 46% of disabled people receive personal independence payment (PIP), compared to 40% before the pandemic. Researchers argue that the rise in numbers of people claiming benefits is simply because more people are applying for the benefits to which they are entitled.

Only one in three disabled disabled people receive PIP (33%), which is intended to help people cover the extra costs of a physical and mental health condition. This is up by 5% since 2019.

As the Big Issue previously reported, the pandemic has had an impact on mental and physical health and has been compounded by a cost of living crisis which has also worsened people’s health. Around 36% more people were in touch with mental health services in 2024 than 2019.

Max Mosley, senior economist at the New Economics Foundation, said: “Our analysis suggests that PIP is going to exactly the sort of people it is intended to support, but that higher rates of disability and financial hardship are driving more people to claim.”

New Economics Foundation researchers have highlighted that there has been a fairly static success rate in PIP claims – fewer than half (48%) of people who have applied for PIP are awarded it, and it has remained so for a number of years. If it had become easier to claim PIP, the success rate would have increased.

There is a strong correlation between disability prevalence, hardship and PIP claims across regions in the UK. The rate of deprivation in a region and the number of disabled people living there allowed researchers to predict the rate of PIP payments with 94% accuracy. 

As a result, the New Economics Foundation concludes that the rise in disability benefit claims is symptomatic of rising disability rates and worsening hardship.

By the government’s own estimates, 250,000 more people will be plunged into poverty as a result of the disability benefit reforms – and disabled people are already disproportionately impacted by hardship. Around 12% of disabled people have said they were unable to pay their bills in the last 12 months, compared with 5% of non-disabled people.

The New Economics Foundation also warned that the cost savings from the disability benefit cuts are likely “not as high as assumed”, as people often look for alternative forms of financial support from the government and councils when their benefits are cut.

Mosley added: “The government’s plans to restrict access to PIP will lead to hundreds of thousands of disabled people missing out on support they very much need. This could well prove to be as politically toxic for the government as cutting the winter fuel payment.”

A Department for Work and Pensions spokesperson said: “The government is determined to support more people back to work and at the heart of our reforms is a £1billion package to help disabled people and those who are long-term sick find secure, stable jobs.

“Alongside this, we’ve increased the national living wage, uprated benefits, and are helping over one million households by introducing a fair repayment rate on universal credit deductions which will help boost financial security up and down the country.”

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