The Labour government has issued a stark warning to 1.2 million people receiving sickness benefits, indicating that its planned overhaul of the welfare system is far from over.
Mental Health Conditions Dominate Benefit Claims
New figures from the Department for Work and Pensions reveal a significant trend. Of those successfully signed off work between January 2022 and August 2025, a striking 59% reported conditions like depression and anxiety. This means that nearly six in every ten claimants are receiving DWP sickness benefits primarily for mental health issues.
The data underscores a growing caseload, with the DWP confirming a 6% increase in the number of people on incapacity benefits over the past year alone. A spokesperson attributed much of this rise to the ongoing migration of claimants from the old Employment and Support Allowance (ESA) system onto Universal Credit, a policy inherited from the previous Conservative administration.
Ministers Eye Further Welfare Savings
In a clear signal that more changes are on the horizon, DWP chief Pat McFadden has stated the government is "not done" looking at the ballooning welfare budget. He refused to rule out implementing further cuts, emphasising a drive to find additional savings.
Prime Minister Sir Keir Starmer has already attempted to tackle spiralling benefits costs with new legislation. However, his plans faced significant opposition, forcing him to dilute the proposed measures to secure support from his own backbench MPs.
Experts Warn of Systemic Flaws
The potential tightening of eligibility for Universal Credit and ESA comes alongside expert criticism of the system. A report from the Institute for Fiscal Studies (IFS) cautioned that the current framework may be directing people towards long-term disability benefits when alternative support could be more appropriate.
The IFS highlighted a key concern for policymakers: "how receipt of these benefits might change people’s behaviour" over many years of claims.
In response, the DWP has outlined its strategy to fix what it calls a "broken system." Key actions include:
- Removing financial incentives within Universal Credit that are seen to discourage work.
- Redeploying 1,000 work coaches to proactively engage with sick and disabled claimants who may have had little prior contact.
The government's focus remains on reducing the welfare bill while attempting to provide more targeted support, setting the stage for further contentious reforms in the coming months.
