{"id":312987,"date":"2025-12-13T00:24:17","date_gmt":"2025-12-13T00:24:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/312987\/"},"modified":"2025-12-13T00:24:17","modified_gmt":"2025-12-13T00:24:17","slug":"state-pension-age-rise-and-housing-benefit-cuts-blamed-for-rise-in-pip-claims","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/312987\/","title":{"rendered":"State pension age rise and housing benefit cuts blamed for rise in PIP claims"},"content":{"rendered":"

\n\t\t\t\t\tExperts from the IFS estimate that cuts to benefits actually caused welfare spending to jump by around \u00a3900m\t\t\t\t\t <\/p>\n

Cuts to housing benefits<\/a> and an increase in the state pension age<\/a> have been blamed for an estimated \u00a3900m rise in disability benefit claims over the past decade.<\/p>\n

New research \u2013 published by the Institute for Fiscal Studies \u2013 examined four major welfare reforms between 2008 and 2018. <\/p>\n

It concluded that reductions in non-health benefits are likely to have pushed more people towards health-related support<\/a>, including personal independence payments (PIP). <\/p>\n

New FeatureIn ShortQuick Stories. Same trusted journalism.<\/p>\n

\u201cAcross four different reforms, we find an unintended consequence of benefit cuts \u2013 that they lead to more people claiming disability benefits,\u201d said Eduin Latimer, senior research economist at the IFS.<\/p>\n

The report suggests this can happen in two ways. Lower income can worsen physical and mental health, increasing the likelihood that a person qualifies for support. <\/p>\n

Additionally, cutting income from housing or out-of-work benefits can change the incentives to apply for disability benefits, encouraging some people on the margin of eligibility to claim.<\/p>\n

David Finch at the Health Foundation said cuts \u201ccan push people to claim health-related benefits, potentially driven by the cuts worsening health\u201d. He added that this created \u201ca long-term risk that they spend longer out of the workforce and with lower income\u201d.<\/p>\n

The IFS estimates that reforms to non-health benefits and taxes between 2010 and 2019 increased disability benefit spending<\/a> by around \u00a3900m. That represents roughly 13 per cent of the \u00a37bn rise in total disability benefit spending over the decade.<\/p>\n

However, the report stresses this is a \u201cback-of-the-envelope calculation\u201d and only explains a small part of the wider increase. The study also notes there have been no significant net reductions in benefit generosity since 2019, meaning these earlier cuts cannot explain the sharp post-pandemic rise in disability claims.<\/p>\n

Here are the reforms the IFS examined, and what the report says about them.<\/p>\n

Housing benefit cuts<\/p>\n

The first reform examined was the 2011 reduction in the maximum housing benefit for private renters through Local Housing Allowance.<\/p>\n

For households affected, housing benefit income fell by an average of \u00a3667 per year after two years \u2013 a 3.3 per cent drop in total income. <\/p>\n

Disability benefit receipt rose from 221,000 to 229,000 among this group, a 3.5 per cent increase.<\/p>\n

The researchers describe this as an implied income elasticity of \u20131.1 \u2013 meaning a 1 per cent fall in income led to a 1.1 per cent rise in disability claims.<\/p>\n

Iain Porter of the Joseph Rowntree Foundation said social security \u201cshould be a public service that is there for any of us when we need it\u201d. He described support during hardship as \u201can investment in their future, their health and the wider economy\u201d.<\/p>\n

Raising the female state pension age<\/p>\n

The increase in the female state pension age from 60 in 2010 to 65 in 2018 also coincided with a rise in disability benefit claims.<\/p>\n

The IFS estimates that affected women lost about 20 per cent of their income \u2013 around \u00a38,100 a year \u2013 until they reached the higher pension age. <\/p>\n

As a result of this fall in income, the share of women claiming disability benefits rose from 11.4 per cent to 12.3 per cent. That is a 0.9 percentage point increase, or seven per cent in proportional terms.<\/p>\n

The IFS found that, on average, a 1 per cent fall in income among women affected led to a 0.4 per cent rise in disability claims.<\/p>\n

It says this negligible effect reflects the broader group of women affected \u2013 many were not on low incomes and therefore were less likely to change their behaviour when their income fell.<\/p>\n<\/p>\n

Lowering the benefit cap<\/p>\n

The benefit cap \u2013 which limits the total amount an out-of-work household can receive \u2013 was lowered in 2016. <\/p>\n

It reduced the maximum benefits a household could receive from \u00a326,000 for all households to \u00a320,000 per year outside London; and to \u00a323,000 within Greater London.<\/p>\n

The IFS found that, one year later, 3.2 per cent of these households were receiving disability benefits, compared with 2.6 per cent of similar households just below the cap. That is a 20 per cent rise in disability benefit receipt.<\/p>\n

On average, a 1 per cent fall in income among households hit by the cap was potentially linked to a 1.8 per cent rise in disability claims. <\/p>\n

However, the think tank clarified that this effect looks larger than for the other reforms because claiming a disability benefit removes a household from the cap entirely, giving families a much stronger financial incentive to apply.<\/p>\n

Work requirements for single parents<\/p>\n

The change to the lone parent obligation, rolled out between 2008 and 2012, meant that lone parents could no longer receive benefits solely for being a single parent once their youngest child reached a certain age.<\/p>\n

Instead, they were expected to seek work actively.<\/p>\n

Before the reform, a person could claim income support benefits until their child was 16. This fell to 12 in 2008, and just five years old by 2012.<\/p>\n

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\n\t\t\t\"Article <\/a><\/p>\n

The report noted that reform increased employment by 4.4 percentage points. <\/p>\n

But there were also rises in health-related support \u2013 incapacity benefit receipt increased by 3.3 percentage points, while disability benefit receipt rose by 0.7 points.<\/p>\n

The report says this shift meant the policy produced \u201cvirtually no fiscal saving\u201d in its original budget area, because reduced spending on one benefit was offset by higher spending elsewhere.<\/p>\n

A Department for Work and Pensions (DWP) spokesperson said: \u201cWe want to create a welfare state that supports those who need it while helping people into work and delivering fairness to the taxpayer.<\/p>\n

\u201cThat\u2019s why we\u2019re reforming the broken system we inherited by tackling perverse incentives that encourage sickness claims, increasing face-to-face assessments, and investing \u00a31 billion to help sick and disabled people into good, secure jobs.<\/p>\n

\u201cOn top of this the Timms Review will make PIP fair and fit for the future, while Alan Milburn\u2019s investigation into young people and inactivity will help us tackle the key barriers behind youth unemployment.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Experts from the IFS estimate that cuts to benefits actually caused welfare spending to jump by around \u00a3900m…\n","protected":false},"author":2,"featured_media":312988,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[4029,84,4225,4176,107268,64,4174,4175,6039,2221,56,54,55],"class_list":{"0":"post-312987","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-benefits","9":"tag-business","10":"tag-disability-benefits","11":"tag-finance","12":"tag-housing-benefit","13":"tag-ifs","14":"tag-personal-finance","15":"tag-personalfinance","16":"tag-pip","17":"tag-state-pension","18":"tag-uk","19":"tag-united-kingdom","20":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/312987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=312987"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/312987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/312988"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=312987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=312987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=312987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}