What is labour government now proposing for benefit changes - Vote on Tuesday

27th June 2025

Here's a summary of Labour’s latest benefit‐reform plans, drawing on the recent draft legislation, concessions to ba.ckbench MPs and the March 2025 green paper:

1. Universal Credit & PIP Bill: £4-5 billion of savings
– The flagship Welfare Reform Bill aims to shave about £4.1–5 billion off annual spending by tightening eligibility for both Personal Independence Payment (PIP) and the Universal Credit (UC) health-related top-ups. – The Office for Budget Responsibility estimates that under the original rules roughly 1.5 million existing claimants would no longer meet the new criteria.

2. Concessions for PIP claimants
– After a revolt by over 120 Labour MPs, ministers agreed that all current PIP recipients will remain under today’s rules. – The tougher eligibility tests will now apply only to new claimants from November 2026, and a joint review of assessment criteria will be "co-produced" with disabled people.

3. Universal Credit tweaks
– Original plans would have capped the UC work-capability addition to those aged 22+ and frozen or reduced the health element for new claimants over the coming years. – Under the concessions, existing recipients keep their current rates; any new restrictions or freezes kick in only for new UC claims from late 2026 onwards.

4. “Pathways to Work” green paper reforms
– Scrapping the controversial Work Capability Assessment and ending repeated reassessments for people with lifelong conditions. – Introducing a mandatory “right to try” work guarantee, backed by a £1 billion fund for enhanced employment support. – A general uplift in the UC standard allowance, funded by a trimmed health-element payment for new claimants.

5. New PIP assessment criteria
– From November 2026 onwards, new PIP applicants must score at least 4 points on one of the daily-living activities to qualify for that component. – This change is intended to rebalance costs and ensure support targets those with the highest needs,