Liz Kendall benefits overhaul: How does the welfare crackdown impact Scotland? What happens with PIP?

The changes were announced on Tuesday

A sweeping overhaul of the welfare system will see the assessment process for some health benefits scrapped and reform to disability benefits in a plan expected to save billions by the end of the decade.

Unveiling the changes, work and pensions secretary Liz Kendall told MP the current social security system is “failing the very people it is supposed to help and holding our country back”.

Ms Kendall told MPs the reform package is expected to save over £5 billion in 2029/30, but the impact of this on Scotland is far from simple.

Many aspects of the welfare system are devolved to Holyrood, and the UK Government has not announced a straight cut, but rather reforms. Here’s what it means for Scotland, and benefits in Scotland.

Personal Independence Payment

One of the biggest changes is scrapping the Work Capability Assessment (WCA) and replacing it with a new single assessment. There had been fears the Government will freeze personal independence payment (PIP), but instead Ms Kendall announced a change to assessment. The age at which people can access PIP will increase to 22.

PIP is devolved in Scotland and has been replaced by the Scottish Government’s Adult Disability Payment, though as of last autumn, there were still 80,000 people on PIP in Scotland as it is phased out. The Scottish Government is therefore responsible for the eligibility criteria for Adult Disability Payment so these changes will not apply in Scotland. It will be up to the Scottish Government to decide whether to also narrow the requirement criteria.

However, it could still mean less money for Scotland. If the UK Government puts less money into PIP for England and Wales, there would be a cut in the money transferred to the Holyrood budget.

The DWP hopes to save £5 billion

Universal Credit

Ms Kendall also announced the UK Government will bring in a “permanent, above-inflation rise” to the standard allowance of universal credit as well as legislating to “rebalance” payments for the benefit. She explained this would equate to a £775 annual increase in cash terms by 2029, and applies to a single person aged 25 or over.

The UK Government has promised to explain the funding implications for Scotland in the spring statement, which will take place on March 26.

Adult Disability Payment

Those who receive Adult Disability Payment are not immediately impacted by the PIP eligibility changes. However, with the UK Government hoping to save £5 billion, that could mean the Scottish Government has less to spend on welfare.

£1 billion employment package

Another measure announced is a £1 billion employment package, which Ms Kendall said would deliver tailored support for disabled people and those with long-term conditions, including 1,000 work coaches.

In Scotland, skills, health and training are devolved and employment support is delivered by both Jobcentre Plus and the Scottish Government. The UK Government says it will work closely with the Scottish Government to ensure devolved and reserved provision “works effectively together”.