The Department for Work and Pensions (DWP) is set to introduce some changes to the disability benefit Personal Independence Payment (PIP) next year.
In the UK, around 3.6million people claim PIP and the money is used to help with the added costs of having a disability or health condition. There has been a lot of public discussion around the benefit over the last year after the previous Tory government announced major reform plans for it in a bid to reduce spending on the welfare system.
According to the latest DWP statistics, around 230,000 people filed their first PIP claim between August and the end of October this year. This indicates that around 80,000 applications are made for PIP each month. Labour has since confirmed that it would also be looking into changes for the benefit, however would not be going forward with the former government’s plans. Here we have listed some of the changes expected for 2025 – and how they will impact those claiming.
Early payment dates for the New Year
This one isn’t a huge change and is, in fact, one that happens each and every year. Some payment dates for PIP will move at the beginning of January as the DWP does not pay benefits on bank holidays. If your PIP is paid on Tuesday, December 31 then you will get your money as normal.
However, if you are due a payment on January 1 – so New Year’s Day – then you will get it earlier on December 31 instead. The change will affect those who received their cash four weeks earlier on December 4. Payments due from January 2 will be made as normal, except in Scotland. This is because the New Year celebrations are extended to January, so payments will be landing in accounts earlier at December 31.
Motability £750 payment scrapped
The New Vehicle Payment – which is a one-off £750 payment to help you get a brand-new car on the Motability Scheme – will be scrapped from January 3. Alongside this, the £100 New Product Payment for scooters and powered wheelchairs is also being axed.
It was originally due to end on December, 31, 2024 for new customers, but was extended due to opening times over the festive period. The payment was first introduced in 2022 to help Motability customers with rising vehicle costs due to disruptions within the industry that followed the COVID-19 pandemic.
The scheme allows individuals who receive a disability benefit, with an award for the higher or enhanced rate of the mobility component, to allocate some or all of the payment towards leasing a new car, wheelchair-accessible vehicle, scooter or powered wheelchair. In addition to a new car, customers also gain insurance, breakdown assistance, servicing, maintenance, tyres and windscreen repairs as part of the package.
You will need to put in an order for your vehicle by the deadline to benefit from it. You do not have to collect your vehicle by January 3, but you must have completed your order with your dealer by this date. You only get this payment once, not every time you get a new vehicle.
Major reform of disability benefits
As mentioned earlier, the former Tory government published its green paper last year on its plans to tackle the soaring costs of the PIP benefit. Their proposals included replacing cash payments with vouchers, grants, or shopping catalogues. This plan was scrapped by Labour, which is set to publish its own proposals that aim to “overhaul the health and disability benefits system so it better supports people to enter and remain in work and to tackle the spiralling benefits bill”.
Work and Pensions Secretary Liz Kendall recently said: “I will be putting forward our own proposals to reform sickness and disability benefits. This is extremely difficult and I know people really want more detail, but we won’t do that until we’re absolutely ready and have had the proper discussions with people.”
DWP spending on the disability benefit is predicted to grow by 63% over the next five years, from £21.6 billion in 2023/24 to £ 35.3 billion in 2028/29. According to figures, around 33,000 more people start receiving the benefit, which is double the rate before the COVID-19 pandemic.
Increased payment rates from April
This is another one that’s not a new one as benefit rates tend to rise by inflation each April. From April 2025, benefits across the board will rise by 1.7% – in line with September’s inflation figure. PIP is made up of two components – a daily living rate and a mobility rate – and you can be entitled to both or just one of these. These components are then split again, into the standard rate and the enhanced rate.
Currently, the standard rate for daily living sits at £72.65 and the enhanced is £108.55. For the mobility component, the standard rate is £28.70 a week and the enhanced is £75.75. You could be paid £749.80 every four weeks if you are eligible for both enhanced rates. Below is how the rise will impact PIP payments:
Daily living
- Lower rate: Rising from £72.65 a week to £73.90 a week
- Higher rate: Rising from £108.55 a week to £110.40 a week
Mobility
- Lower rate: Rising from £28.70 a week to £30.20 a week
- Higher rate: Rising from £75.75 a week to £77.05 a week
Report on what PIP payments are used for
The DWP will also conduct a study to gather more information on what people need their PIP payments to help cover. The findings will be announced next summer. The study follows MPs’ questions about the adequacy of PIP in supporting the extra costs of disability. Representatives of the disability charity Scope are among those contributing to the report.
Sir Stephen Timms, DWP Minister for Social Security and Disability, recently said that although PIP does provide a contribution to the higher costs which can arise from a disability or a health condition, there was “no objective way” of deciding what an “adequate level of PIP should be, as everyone has different requirements reflecting their own circumstances and priorities”.
He said: “In order to improve the evidence in this area, DWP is now undertaking a new survey of Personal Independence Payment customers to understand more about their disability-related needs. This project has a methodological advisory group including representatives of disabled people’s organisations, disability charities and academic experts. It is expected to produce findings in Summer 2025.”
Funding to help claimants back into work
The government recently announced funding – which will be shared among 17 NHS areas – to investigate new ways of treating musculoskeletal conditions that are keeping people out of work reports BirminghamLive.
Out of the 2.8million people who are “economically inactive”, one of the most common conditions listed is muscle and joint pains – second to mental health. For around 646,000 people, musculoskeletal disorders are listed as their primary condition, and many receive Universal Credit incapacity payments for long-term sickness due to it.
It must be noted that PIP was not mentioned in the announcement, as the benefit can be awarded if you are in or out of work. However, 1.1million people claim PIP due to musculoskeletal conditions as it impacts their daily lives and mobility. DWP data for PIP shows the musculoskeletal issues listed on claim forms include various forms of arthritis, along with bad backs, amputation, and shoulder, neck, hip, and knee problems. Any advancement on treatment on these conditions could benefit those claiming PIP, as if their mobility is improved, it could see their payments affected.
One the funding announcement, Minister for Employment Alison McGovern said: “For too long, people locked out of work with health issues have been forgotten about and denied the support they need to get well and get working. It’s stifling our economy and preventing those eager to progress in life from unleashing their full potential.
“This multi-million-pound funding boost means musculoskeletal patients across the country will get the help they need, as we give clinical leaders the resources to innovate, get people off waiting lists and get Britain working again.”
