Labour announces significant welfare reforms in spring Budget

Labour has announced significant changes to the welfare system ahead of the spring Budget. Work and Pensions Secretary Liz Kendall stated that the current welfare system is failing many people and is holding the country back. The government aims to save £5 billion by 2029/30 with these reforms. The changes include tighter eligibility for the Personal Independence Payment (PIP). While current claimants will not be affected immediately, new applicants will face stricter requirements. PIP assists those with daily living and mobility costs, with payments ranging from £28.70 to £184.30. The new rules will make it harder to qualify for these payments. Kendall also announced plans to abolish the work capability assessment by 2028. This assessment determines a person’s ability to work and their entitlement to extra support. Instead, this will be integrated with the assessment for PIP, ensuring no one loses benefits while trying to find work. Additionally, Labour plans to boost the standard Universal Credit (UC) allowance starting in April 2026. This will increase the payment by £7 to £98 a week but will freeze the health element of UC, leading to potential cuts for those already receiving it. A proposal to limit health top-ups in UC to those over 22 years old has also been made, aiming to encourage young people to seek employment. Labour is introducing a new benefit called 'Unemployment Insurance' to replace Jobseeker’s Allowance and Employment and Support Allowance. This benefit will be tied to previous national insurance contributions. Furthermore, a “right to try” policy will allow disabled claimants to keep benefits when trying short-term jobs. The government plans to invest an additional £1 billion per year to support health, employment, and skills training. This support will focus on individual goals, including skills training. Labour hopes these reforms will make the welfare system more pro-work and help improve the lives of those in need.